On buying solar electricity, not panels
One of the biggest hurdles to going solar is the large up-front costs. That’s why solar power purchase agreements (PPAs in wonk-speak) have been so popular. With this model, a third party designs, installs, and owns a system on your roof. You simply sign a long-term contract to buy the output on a kWh basis. You avoid the need for financing, and shift performance risk to the service provider — you only buy what the system produces. Check out this article for more.
To date, solar PPAs have been offered exclusively for commercial-sized systems. That’s because the developer has to take a 15-yr maintenance/service/billing interest in the property, and the economics are better for big systems.
Until now. Sun Run Generation is, as far as I can tell, the first company to legitimately offer a form of residential solar PPA*. They make a fairly convincing case that they can offer a PPA with net customer economics better than an outright purchase. The reason? As a business, they are not restricted by the $2K residential Fed investment tax credit cap, but can take the full 30 percent.
I predict that the next few significant developments in the solar field are going to be in the field of financial rather than technical innovation. Solar Power 2007, the largest solar conference in the U.S., is next week in Long Beach. If I see anything that contradicts my prediction, I’ll let you know. (You should also consider going yourself. All the kids will be there, and there’s a no-fee public night on Tuesday).
*Note: there have been other companies that claim to offer this service. The most notorious don’t currently have … what’s the technical term … any actual product. As with everything, buyer beware.