[Update 1/8/08: Helio Micro is now moving into the residential PPA market, creating a third residential PPA style company. Their website is more murky than Sun Run (below), so you can't evaluate much of anything (which always causes me pause), but they just hired a finance director from SunPower (Solarbuzz article). To my knowledge, none of the three has installed a system under this model...yet. Remember: hype (!) = cover-up. This will happen in California first and then trickle elsewhere - don't hold your breath. NJ just voted to provide rebates to everyone on the waiting list, but not anyone new as they transition to a market incentive, which is good in the long run, but creates market uncertainty now (article). So their market attractiveness to this model is on hold.]
According to a news release on Renewable Energy Access, CitizenRE now has a competitor in the residential solar-leasing services industry (of which there are no documented installations as of yet). It isn’t FREE! but I predict they’ll beat CitizenRE to the punch in having actual solar installations…
Borrego Solar, a solar installer since 1980, has a partnership with Sun Run LLC and is now offering a similar solar-leasing product to CitizenRE, but they have a bit of realism embedded in their business plan. It is currently only available in Contra Costa County, California on a pilot basis (not EVERYWHERE for ANYONE!).
Essentially, they install a solar system on your home and if it offsets your electric bill 50%, you pay 50% to your electric company at their prices and 50% to Sun Run at their prices, which are either fixed or declining.
Sun Run’s website has some information about the process on their website (no contracts or clear costs persay) and there are two options:
1. Higher downpayment with a fixed 20 year solar rate
2. Lower downpayment with a higher but declining solar rate
The solar rate they give in their example, shows the higher down payment of just over $16,185 (not FREE!) and a solar rate of 13.5 cents/kilowatt-hour, which seems expensive but California has high rates (actually, even in Maryland, I pay 15 cents/kWh). It should be noted that the $16K down payment is still $20K less than buying it yourself, based on their math.
Before solar, this example home pays 26 cents/kWh to the electric company, and after, they pay 17 cents/kWh to the electric company (since they’re now in a lower rate tier with solar because they are consuming less) and 13.5 cents/kWh to SunRun at a 20-year fixed rate.
If electric rates never rose, you would break even on this investment over 20 years if you used over 23,000 kWh/yr, not counting the cost of money (that’s a lot - I use 3600 kWh in DC). So, you are really banking on electric rates rising to recoup your up-front investment on a quicker basis, and using a lot of electricity (but cut your electric bills first!).
The second option doesn’t have an example on their website, but would be something like paying $8,000 up front and your solar rate being 18 cents/kWh in year 1, and declining to 13 cents/kWh in year 20, when conventional electricity prices are presumably much higher. Ultimately, the economics are probably the same for either option for the company but gives the homeowner the option to make a choice on the amount up-front.
On it’s face, this sounds like a much more reasonable alternative to CitizenRE:
- No hype
- Actual employees
- Financial numbers that are realistic (not FREE!)
- Pilot program to prove the model
- Working with an established solar company
- Limiting the scope to states/markets that make sense
There are only a few places where some combination of electric rates, amount of sun, and solar incentives make this possible - California, New Jersey (when they aren’t running out of incentive money), maybe Arizona, Nevada, or New Mexico. Hawaii has sun and rates but not incentives. The East Coast has high rates, some programs, but less sun. Colorado’s sunny and has incentives, but the rates are a bit too low (and they may run out of $/motivation soon if they aren’t careful by growing too fast).
Like with all things, if it sounds like a silver bullet, things are almost always more complicated than they seem. I know nothing about either of these new companies, but on their face, the programs have a measure of realism to them that CitizenRE never had (note past tense).
As has been pointed out in the past, this is only “new” because it’s being done on homes, which are higher cost per amount of solar installed. Large business no-cost solar systems are a common part of the solar industry in California and New Jersey already.
This provides an interesting reference for how much CitizenRE would have to further reduce costs to get to their goal of a $500 down payment and solar across the country. Just to operate in California, they’ll have to deal with the over $15,000 they’re not getting from the customer, and in other states, the lower electric rates and solar resource. My original 3 part series on CitizenRE can be read here - “Not All That’s Renewable Is Green - Part 1 of 3″.
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Environment, Health, Money, Religion, Washington DC | 
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Posted by solarkismet
