Creative Financing Paves the Way for Solar in 2010

Solar power is advancing slowly in America. Despite several years of rapid growth, solar still accounts for less than one percent of total energy consumption in America, where up-front costs are still prohibitive for the majority of homeowners. Governments and solar companies are responding with creative financing schemes to make solar more affordable and eliminate or drastically reduce those initial costs.

GoSolarSF

San Francisco has seen its number of solar rooftops more than double under the guidance of its GoSolarSF program, in which homeowners meeting income specifications are eligible for city-funded grants from $500 to $7,000 to subsidize solar installations. This is in addition to federal and state rebates available to solar homeowners.

Property Assessed Clean Energy

Just across the Bay Bridge in Berkeley is the birthplace of the Financing Initiative for Renewable and Solar Technology (FIRST), the most popular solar incentive in existence. This creative program, in which city or county bonds cover the initial costs of a home solar power system and are paid back through a voluntary assessment on property taxes, severely cuts initial costs and is a safe bet for lenders. Since Berkeley first conceived of it in 2007, the program has gone national. 16 states have passed legislation allowing cities and counties to adopt similar plans, and the federal government is promoting a national model, called Property Assessed Clean Energy or PACE.

SolarLease

Private companies also see the need for creative financing schemes. California-based SolarCity has made a name for itself by offering the first ever solar leasing program. SolarCity covers the costs of installation and maintenance, while the homeowner pays a monthly lease bill for use of the electricity. Homeowners save about 10-15 percent on average from their pre-solar utility bills. The program has been very popular. About half of SolarCity’s customers have chosen the lease option and the company has grown fast. It now operates in California, Arizona, Colorado and Oregon, with plans to expand into five more states in 2010.

Sungevity

Other creative solar outlets and incentives exist as well. Sungevity, another Bay Area firm, saves consumers money by putting the entire sales process online, using satellite imagery and specific home information to calculate costs without homeowners ever leaving their desk. Sungevity streamlines their sales process and lets existing state and federal incentives do the rest. In the end, you have a more affordable product.

SunRun

Yet another Bay Area solar company, SunRun, uses power purchase agreements (PPA) so prominent among large-scale solar power plants. For an installation fee as low as $1,000, a homeowner can get solar panels installed for which they sign a PPA to buy the power created from SunRun at a fixed rate over time. Both homeowner and installer save and earn money respectively.

Do-it-Yourself

Do-it-yourself solar is getting a nod at 21 California Lowe’s Home Improvement stores, where the national retailer has begun stocking Akeena’s Andalay Solar panels on its shelves. Dedicated homeowners can bring down costs by doing the labor themselves. The Andalay panels are integrally designed for easy and fast installation, and the panels sold on Lowe’s shelves are eligible for the 30 percent federal tax credit.

Sources: Mercury News and San Francisco Chronicle

Posted on January 1 in Solar Funding by .

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