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Solar for All


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JL
- 614 days ago - sierraclub.org
Until now, rooftop solar has only worked for those with hefty electric bills and sunny roofs. Community solar could make it available to everyone.



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JL A. (275)
Saturday January 12, 2013, 7:52 am
Solar for All
Until now, rooftop solar has only worked for those with hefty electric bills and sunny roofs. Community solar could make it available to everyone.

By Paul Rauber
Community Solar
Gordon Studer

I really wanted the figures to work out. So did Ricky, the nice young guy from Sungevity who was trying to lease me a solar array for my roof. My family was looking into a 1.7-kilowatt system—the smallest available. Even so, our miserly habits kept us firmly in our utility's lowest—and cheapest—tier of electricity usage. Solar is getting cheaper fast, but the numbers for the popular lease-financing model wouldn't pencil out unless we could somehow boost our energy usage into a higher tier.

"How about a plug-in Prius?" Ricky suggested helpfully. "That would make it work."

Unfortunately, even though a Prius driven 30 miles a day would increase our electricity use by 165 kilowatt-hours a month, a new car isn't in our budget—and so (for the time being, at least), neither are solar panels on our roof. That puts me in good company: Some 75 percent of Americans rent, live in condos, have roofs shaded by trees or other buildings, or are otherwise poor candidates for sun power. Which leaves us out of the clean energy revolution that's going on across the country.

If "revolution" sounds like hyperbole, consider this: U.S. solar installations more than doubled from the second quarter of 2011 to the second quarter of 2012. Last August, California's utility-scale solar plants hit 1 gigawatt—as much energy as can be generated by a large coal- or nuclear-fired power plant. Less remarked on during the celebration of that milestone was the fact that at the same time, "distributed solar"—the thousands of rooftop systems in the state—was exceeding that number by 20 percent, producing 1.2 gigawatts. In 2008, the National Renewable Energy Laboratory put the annual technical potential of rooftop solar in the United States at 819 trillion watt-hours, equal to about a fifth of the nation's 2011 electricity demand.
Solar panels
Working through Mosaic, 70 community members financed this 8.6-kilowatt solar project on top of West Oakland's People's Grocery, which will save the food-justice project $32,000 over the next 20 years. | Photo courtesy of Mosaic

Along with the increase in capacity, solar prices are plummeting, thanks to technological advances and fierce competition from China. Within two to three years, says John Farrell, senior researcher at the Institute of Local Self-Reliance in Minneapolis, both California and New York will achieve "grid parity." That's the golden moment when power from the sun becomes as cheap as average residential electricity. Hawaii is already there; in Honolulu, 41 percent of building-permit applications these days are requests to install solar systems.

"The economics continue to drive solar forward," Farrell says. "But there's still a big barrier. The economics are going to allow a stampede of folks who are well placed financially, and in terms of the property they own, to go solar. But it's leaving everyone else out."

So, what if I don't want to be left out? Couldn't I get together with the other 75 percenters in my neighborhood, put some solar panels on the local recreation center, and reap the benefits?
"Community solar happens for innovative citizens but always against the odds."

Many other people across the country are asking the same question—and some are succeeding in establishing a form of "community solar" or "solar garden." In Minnesota, members of the Wright-Hennepin Cooperative Electric Association can own part of a 39-kilowatt array of locally made panels on the roof of the co-op's headquarters, allowing them to share in the electricity just as they would with a system on their own roofs. California's forward-looking Sacramento Municipal Utility District lets customers purchase solar power from a local "solar farm," receiving the same full retail credit per kilowatt-hour that they would from a home system. And in Washington State, members of the nonprofit Backbone Campaign can invest in a 50- to 66-kilowatt solar array erected at a recycling transfer station, with a forecast return of 13.5 percent a year until 2020.

Nice for them, but not so much for me and my neighbors on Oregon Street. Our utility is of the big for-profit, investor-owned sort, not a cooperative, and I am neither a Washington resident nor a member of the Backbone Campaign, which means I'm prohibited by financial regulators from participating in its program. However good an idea community solar might be, achieving it requires surmounting a daunting string of institutional hurdles. "Community solar happens for innovative citizens," Farrell says, "but always against the odds."

Let's look at the obstacles facing my dream community solar project. For starters, my neighbors and I would need some capital, but banks aren't much interested in financing penny-ante solar arrays. Our numbers wouldn't look very good anyway, because a still-essential ingredient in solar's success is the 30 percent federal tax credit, and as a nonprofit, we wouldn't be able to take advantage of it.

If we somehow did manage to scrape together the installation money, we'd need to sell the juice our panels generated to our local utility. But what would be in it for them? Even in a state like California, where utilities are obligated (up to a point) to accept new residential solar applications, nothing requires them to deal with the Oregon Street Cat Fanciers' Solar Co-op. If they did, they'd have to come up with a billing system that would credit me and my neighbor Doris and the cat lady down the street proportional to our stakes in the project—something Pacific Gas and Electric Company (PG&E) has zero motivation to do.

In short, the chances of our plucky little neighborhood powering its blenders, DVRs, and iPads with shared solar look very poor. To triumph against the odds, community solar needs a model that can work within the current regulatory system (unhelpful as that may be) and that is widely replicable. Happily, two organizations (at least) appear to have such a model: Colorado's Clean Energy Collective and California's Mosaic.

Paul Spencer is founder and president of the former. He got into community solar after trying to design a "net-zero" community of 89 homes in Carbondale, Colorado, that would draw its power from a centralized solar system. The housing market collapse killed the project, but Spencer and his group resolved to craft a widely deployable model for community solar. It took a year and a half of running the numbers on dozens of different options before they settled on the rather uncollective formula of individual ownership.

[article continues at the site]
 

Kit B. (276)
Saturday January 12, 2013, 4:46 pm

Yep, for all the work and effort solar is still expensive but does return the investment in a few short years. I like the community efforts that Mosaic is supporting. Sierra Club will do free installations,in California, but they do have a waiting list for those who don't mind the wait.
 

JL A. (275)
Saturday January 12, 2013, 4:50 pm
You cannot currently send a star to Kit because you have done so within the last week. My estimate was a break even on costs/bill reduction with a lease system.
 

Terry V. (30)
Saturday January 12, 2013, 5:40 pm
GREAT ARTICLE and IDEA
THANKS!!!
 

JL A. (275)
Saturday January 12, 2013, 5:46 pm
You are welcome Terry! I like the community approach, too. You cannot currently send a star to Terry because you have done so within the last week.
 

Tim C. (1889)
Saturday January 12, 2013, 7:21 pm
Thanks JL
 

JL A. (275)
Saturday January 12, 2013, 7:33 pm
You are welcome TIm.
 

Cheyenne Thunderbird (100)
Sunday January 13, 2013, 3:22 am
This is also possible on arctic area because we have 24 hours sun and that way we could store the energy also for winter. Each and every area could think ´how big stores they need and collect as much as possible for whole year. This ia very good idea.
 

Justin M. (2)
Sunday January 13, 2013, 12:29 pm
Noted
 

Christeen Anderson (489)
Sunday January 13, 2013, 12:42 pm
Yes, yes, yes.
 

JL A. (275)
Sunday January 13, 2013, 12:56 pm
You cannot currently send a star to Christeen because you have done so within the last week.
 

Colleen L. (2)
Sunday January 13, 2013, 1:48 pm
Good information. Thanks J. L.
 

JL A. (275)
Sunday January 13, 2013, 2:06 pm
You are welcome Colleen
 

greenplanet e. (157)
Sunday January 13, 2013, 4:50 pm
It would be great if solar could be made available for everyone through better technologies, subsidies, more political umphf.
 

JL A. (275)
Sunday January 13, 2013, 5:24 pm
You cannot currently send a star to greenplanet because you have done so within the last week.
 

James Maynard (68)
Monday January 14, 2013, 8:08 am
Good article and good ideas.
 

JL A. (275)
Monday January 14, 2013, 8:21 am
You cannot currently send a star to James because you have done so within the last week.
 

Mümtaz T. (0)
Monday January 14, 2013, 10:07 am
It is time we take our energy future in our own hands - it is time for energy democracy! We need these best practices and success stories to inspire communities worldwide to take their energy generation in their own hands.

If anyone wants to find out more about project and policy updates regarding community-owned power generation and consumption, you may visit The Community Power Report at www.communitypowerreport.com look it up on Twitter (https://twitter.com/thecpreport) and Facebook (http://www.facebook.com/thecpreport)
 

JL A. (275)
Monday January 14, 2013, 10:12 am
Thanks for sharing the links to the great resources Mümtaz !
 

Dori Grasso (0)
Monday January 14, 2013, 11:05 am
We wanted to go solar, but found that our house was too shaded to make it worthwhile or cost-effective. Our local electric company does, however, offer an option to use wind power. We now use 100% local wind-generated power at just about the same cost as our old coal-powered rates. Those of you in the same situation might want to check with your providers to see if this is an option for you.
 

JL A. (275)
Monday January 14, 2013, 11:14 am
Thanks for sharing this interim option with all Dori!
 

Alice C. (1797)
Thursday January 17, 2013, 1:11 am

Sungevity Raises $125M To Line Up Customers and Expand Services Beyond Solar

by Ucilia Wang, Contributing Editor | January 16, 2013

Sungevity is starting the year off with a new, $85 million round to finance solar panel installations and expand its presence in the nine states it already is serving, said the startup's CEO, Andrew Birch.
The Oakland, Calif., company announced the new funding, along with a separate, venture capital round of $40 million on Wednesday. Sungevity began raising that $40 million in early 2012 and closed the round before the end of year. The new capital will not only enable the company to market its services to residential customers, it also will likely be spent on rolling out services beyond putting solar panels on the rooftops. Birch hinted that the company is working on a "road map of new services" that are related to energy, but declined to specify what they are.

Its competitor, SolarCity, has expanded its offerings beyond solar panel installations in recent years by offering lithium-ion battery systems from Tesla Motors for storing electricity produced from solar panels (the batteries discharge the energy whenever it's needed, such as at night when solar panels aren't able to producing electricity). It also inspects homes and carries out retrofits, such as putting in a more energy efficient air conditioning system and insulating the air duct.

Unlike SolarCity, Sungevity doesn't keep in-house crews for installing solar panels. Instead, it hires local contractors, such as electricians and roofers, to do the work. The success of both companies depends heavily on their ability to raise money to finance installations. Aside from selling solar energy equipment directly to homeowners, they also offer 20-year leases in which homeowners pay a monthly fee for the solar electricity generated from their rooftop systems, which are in turn owned by banks or other investors who put up the money to install them.

The two companies, along with rivals such as SunRun, Clean Power Finance, OneRoof Energy and Vivint Solar, have driven the growth of solar leases, which many consumers see as a more affordable way to get solar electricity.

From the start, Sungevity devoted considerable resources to developing software to more efficiently customize solar equipment installation to fit the different sizes, angles and orientation of its customers' rooftops. The company hired the former chief marketing officer of LinkedIn, Patrick Crane, in 2011 to figure out how to use social media and personal referrals to attract more customers. Since his arrival, about a third of the new customers came from referrals, Birch said. Other marketing strategies have made use of its connection with Lowe's, which invested in Sungevity and now offers solar installations through the startup. Sungevity also has pledged to donate to Sierra Club for every Sierra Club member who chooses Sungevity.

"We see a world where the vast majority of the leads are coming from existing, very happy customers," Birch said.

The company has signed up over 5,000 customers since its inception in 2007, Birch said. Sungevity's goal is to double the number of solar energy installations and the megawatts involved every year, he said.

The $85 million project financing fund came from Energy Capital Partners and a bank that has declined to disclose its name. The fund is a combination of tax equity and mezzanine financing. The tax equity portion is due to provide the investors with returns within a shorter period of time, around five years, and it allows the investors to take advantage of the 30% federal investment tax credit for solar energy installations. The mezzanine financing provides the tax benefit, but it also counts on the payments from the 20-year leases signed by homeowners in determining the return on the investments.

Tax equity funds have been a popular way for solar companies to finance installations, but their existence is tied to the federal tax credit, which is due to expire by the end of 2016. As a result, solar service companies have been looking for other ways to raise capital. SolarCity went public last December and is reportedly working on issuing securities that will be backed by its solar leases, much like the mortgage-backed securities.

Birch said the mezzanine financing structure shares similarities with solar asset-backed securities. Sungevity is interested in solar-backed securities as well, though he declined to say when the company will likely use this method to raise money.
 

Ruth R. (219)
Friday December 20, 2013, 7:46 pm
Good Post !
From the article:
' "We hope to show that solar is not only economically viable; it's also profitable." ' --Great comment!
 
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