If you have a home with solar panels and next door you have a home without solar panels, you would expect that there should be a premium for the home with solar panels. So you have just sunk $20,000 for your solar panel system—and you will get some of that back from incentives, but will you be able to recoup any of your out of pocket cost if you move in a year. If the useful life of the solar energy on the home is 25 years, and we use a discount rate of 5% per year, then the economic value of the solar panel system you have on your home is $11,000. All things being equal, and assuming that the market is rational, a purchaser of your home should pay an additional $11,000 over what the house next door is selling for without solar panels on the roof. You would expect that you would recoup at least the present value of the energy savings over the next 25 years if you go sell your home. There is scant evidence out there and we at SolarTown wanted to see if this assumption was correct. Accordingly, we are now completing a study to see whether homeowners do indeed receive a premium for the “solar savings” of having a solar energy system on the home. We are about to release the results of a study on this issue. Stay tuned to the SolarTown Learning Center to see the results.
Archive for the ‘Solar Financing’ Category
Ever since we created the SolarTown community, our customers have complained that the financial burden of going solar was simply too great for them to embark on the journey. Starting today, we are offering our customers some relief: a solar loan program with one year of no payments and no interest. If you are a DIYer, you now have this solar loan program as an option so that you have time to receive your economic incentives and you don’t have to go out and get a home loan or put the entire purchase on your credit card. If you are an installer who has in the past had to advance the cost of the equipment for your customers, you can now have your customer place an order for a solar energy system with SolarTown. You will of course still do the installation—but without having to come out of pocket for the solar energy equipment.
The Property Assessed Clean Energy (PACE) programs are a creative and effective approach to financing solar energy systems. Many were looking for a solar financing solution and after a very limited experiment in Berkeley, PACE expanded like wild fire to 23 states. PACE may not be for everyone and there are other choices available, but we hope that legal clouds hanging over PACE are resolved. Legislation has been introduced in the House to save PACE. We hope that his efforts succeed. It is a program that can help a lot of people go solar.
Financing of solar energy systems has been a major concern to us at SolarTown since we launched this store and community. The average cost of a typical solar installation is north of $30,000. This amount is substantially reduced with the federal tax credit and some state or local rebates thrown in. But you have to wait months, sometimes many months, to take advantage of the incentives. There are currently alternatives available, but none very appealing. SolarTown has been working on a solution to financing of solar energy systems and we hope to be able to announce the program shortly.
New Jersey has been a leader in solar, but because of tough economic times, the Governor has thrown solar under the bus. The New Jersey governor has diverted some $400 million in clean energy programs to balance the state’s budget. This financing of course puts the solar installer at risk if there are delays in receiving the rebates. What happens when the rebates are in jeopardy? Two words spring to mind: panic and chaos—which is exactly what is happening in New Jersey today. New Jersey has temporarily suspended the solar rebate program and has announced that it will not take any further applications until September. If you are a small installer paying your labor and equipment with the expectation that you will receive the rebates in a timely manner, this announcement must have produced uncertainty at best and panic at worst. This move seems to be pound wise and penny foolish as no doubt the solar installers will have to lay off some of their workers and wait until the rebates become available in September—just as the economy is beginning to recover.
The Renewable Energy Technology Conference (RETECH 2010) here in Washington, D.C. convened over the last couple of days. I am sure that there will be much written about the conference that concentrated on strategic issues, finance and incentives for renewable energy. The Conference highlighted many of the common challenges faced by renewable energy projects, regardless of whether they are solar PV, biomass, wind or geothermal. There were some recurrent themes at many of the sessions that I attended on federal and state incentive programs, local programs, and financing of solar energy products.