When it comes to questions about solar panel installation, financing queries are high on the list. There's no doubt that homeowners are interested in the technology, but they also want to know what their payment options are. One concern is the future of tax credits, as these have yet to be extended for 2009. Yesterday, however, a new bill called the Clean Energy Stimulus Act of 2008 was introduced in the Senate, addressing the credits and incentives due for expiration at the end of the year.
I spoke with Nick McDaid of N 2 Electric Inc. regarding the implications of the bill. "If it goes through," McDaid says,
"it will remove the $2,000 cap for residential projects, which would provide an enormous stimulus for the industry. Residential will be on par with commercial, and potentially two-thirds of residential project costs could be eliminated."
Currently, commercial solutions receive up to a 30 percent return on costs while residential projects get a maximum of $2,000, as McDaid mentions. According to McDaid, pending changes signify a great improvement, and the amount of installations will surely increase.
And what if the new bill does not pass? Commercial customers will be highly affected, but residential installations should not decrease by much. McDaid says, "If the current bill expires, it's not going to make a huge difference; $2,000 is not going to determine whether or not people do the PV installations." In terms of paybacks per watt, McDaid says the residential rebates have been pretty steady. "They're moving down below $2 per watt for incentives, so if it goes at the same rate it's going for another year, they'll be down $.90."
In addition to cashing in on rebates, homeowners frequently turn to banks to finance their installations. "The main source of funding is through a homeowner's equity, A new first or an equity line of credit," McDaid says. This is because PPAs (Power Purchase Agreements), or lease agreements for solar have tended to target commercial systems. "We've just recently been talking to a finance solutions company that has a very attractive program where they don't require any money down and they do a five-year lease arrangement with the customer."
PPAs, though, are beginning to become a residential reality, too. Check out our blog article on the subject: Leasing Solar Panels; When You Can't Buy, Borrow. As well as other postings on loans and financing.
Whatever financing options homeowners choose along the way, experts such as McDaid believe solar solutions are ultimately en route to becoming mainstream technology. And the trend is a good one.
"Solar power works toward positive results. I think it's a very great solution to our energy problems."