Traditional Rooftop Solar. In the early days of solar, rooftop panels were not economical. Early adopters were happy to pay up. A small 5 kilowatt installation could cost $60,000 and more. Until the US government introduced a 30% tax credit – meaning that $18,000 of the total cost could be recovered at tax time – this was money out the door. At average US electricity rates of $.15/kilowatt, it would take 66 and 2/3 years to recover the cost of investment! And that is assuming no degradation in the panel production even though history shows that the panels produce about .5% less electricity every year.
Today, by contrast, rooftop solar make sense from a financial point of view. At a cost of about $2.50/watt, a 5 kilowatt system would cost $12,500. Net of the tax incentive the cost would be $8,750. Within less than 10 years the system covers its costs.
In some ways, solar today saves money immediately. If a homeowner chose to finance the cost of the panels, the cost of financing (about $700/year) would be LESS than the cost of the displaced electricity (about $900/year).
Enter Community Solar. Rooftop solar may now be affordable. But it’s not for everybody. Rooftop solar has many obstacles, including:
· Not all rooftops can carry panels. Rooftops must be in good condition – if they need to be replaced within 20 years the cost of removing panels will be prohibitive – and they must be in direct sunlight. Even a flagpole can cast too much shadow over panels.
· Renters cannot use panels. If you are a renter and do not own your building you cannot take advantage of rooftop solar.
· Panels are expensive. Even with lower costs, a homeowners must lay out all or, in the case of bank finance, part of the cost.
· Panels require maintenance. There are no moving parts with solar panels but periodic maintenance – and insurance – are necessary.
· What if you move? If you own your solar panels you won’t have trouble moving. In fact the value of your home could increase. But if you leased or had a third party own your system you could have trouble moving and may have to buy out your lease or pay a penalty if you move within the first five years.
Until recently these obstacles made rooftop solar inaccessible for most households. No longer! Community solar projects allow all electricity consumers to enjoy the benefits of solar energy without the disadvantages enumerated above.
Earliest Community Solar. The first community solar projects required consumers to purchase solar panels that were then erected in large arrays on farmland. This was an infant step in the history of community solar: Households could enjoy ownership, take advantage of the federal income tax credit available to solar panel owners, and receive an allocation of the credits.
The panel ownership approach made solar available to all consumers, whether or not they had rooftops that were bathed by sunlight. Also, in contrast to rooftop solar they were spared maintenance costs. Unfortunately, the early community solar adopters still faced some of the same obstacles: Substantial sums out the door and headaches if they moved outside the utility territory in which the panels were located.
Another issue posed for the panel ownership model was a sensitive legal one: Panel owners who wished to sell their panels to others – when they moved for example – would face a potential
Subscription Model. Faced with the challenges of panel purchase, solar developers looked for alternatives. The most attractive solution became the subscription model: Instead of buying panels that are installed on a solar farm, subscribers sign up for an allocation of the panels. A third party developer buys the panels themselves and then sells the solar electricity production to the local utility which credits the electricity to customer bills.
Customers do not receive solar electricity from the solar farm. They are not generating electricity from their own panels and being paid for it. Rather, they are supporting the solar farm and receiving the benefits indirectly through a credit on their bills.
Solar farm subscribers have the best of all possible worlds: No rooftop restrictions, no up front costs, no problems with moving.
Different Strokes for Different Folks. Not all subscription models of community solar are the same. Some farms require long term contracts, from 6 to 20 years. If a customer cancels a contract he or she must pay a penalty.
Some solar farms will provide a discount to utility rates. These discounts are confusing and require close attention to the fine print. Is the discount to the monthly utility rate or, as in some cases, to an average of the utility rate over the course of the year? Discounts also do not necessarily mean savings: If utility rates go up, customers will pay more.
Some solar farms will provide an allocation of up to 100% of a customer’s electricity usage. Others will allocate blocks of electricity in multiples of, say, 1,000 kilowatt hours per year.
Solar Saver Plans with Solar Farms NY. Solar Farms New York has tried to keep it simple with a plan that provides the fewest obstacles to enrollment – cancel any time without penalty – as well as pricing that provides long term savings if utility prices go up.
Solar Farms New York’s Solar Saver Plan is now available to NYSEG consumers in Central New York around Binghamton and Ithaca and in the North Country near Plattsburgh. Farms are now under construction in Baldwin, New York and Mooers, New York, with other farms on the way.
