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Solar Loans and PPAs
·On June 16, Solar Santa
Monica
sponsored
another educational presentation. Originally
scheduled for the multi-purpose room at the main
library, it was moved to the auditorium to
accommodate the crowd. Our speakers came from
financing companies affiliated with our Preferred
Providers. The following description of the evening
was taken from
notes as well as from materials provided by the
speakers.
Perhaps the main barrier to solar is its initial
cost.
To get past this barrier, companies are developing
financing products that allow you to buy solar over
time while paying about the same or even less than
what you would have been paying on your utility bill.
We presented three of these companies' products at
our June 16 panel. As with all financial products,
companies have their own terms and credit criteria, so
we encourage you to shop carefully.
Solar Loans for Residential Systems
New Resource Bank has created five special solar
loans that allow you to install a solar system with
nothing down. They are based on the equity in your
home, have a streamlined application and approval
process, and no upfront fees, closing costs or points.
The loan may adjust to reflect the savings being
generated by the solar system, as the chart above
demonstrates.
As the homeowner and system owner, you can take
advantage of rebates and tax credits. Today's low
interest rates (in the range of 5 1/2%) make this type
of financing very attractive.
For information,
contact
Gary Groff at New Resource Bank, (415) 995-8134 or
1 (800) 772-8190.
Power Purchase Agreements for Residential
Systems
The concept of the PPA is simple: the finance
company owns the system, and you agree to
purchase its power. PPA arrangements deal with
each of the components of the financing separately:
up-front cost, tax benefits, income stream, back-end
cost.
Owners of large commercial systems have been able
to enter into PPAs for years. As of the past few
months, PPAs have become available to
homeowners. At
our panel the following programs were
introduced.
SunRun PPA, offered through Solar Santa
Monica's Preferred Partner, REC Solar
SunRun requires an upfront payment on the solar
system, then you agree to purchase electric power for
a fixed rate (13 cents/kWh as of June, 2008) over a
contract period (for example, 18 years). SunRun takes
care of monitoring and maintaining the system. As
the owner of the system, SunRun takes the tax
credit.
With the SunRun PPA, your initial system cost is less
than with an outright purchase. You save money on
your utility bill starting the first month, and your rate
never goes up. There is no balloon payment or price
escalator.
For more details, contact REC Solar's Dan Burtt, at
(310) 988-9494.
HelioPower, another of Solar Santa Monica's
Preferred Providers, offers a PPA through its affiliate,
Helio Micro Utility.
Under the Helio Green Energy Plan (TM), HeliomU
installs and owns the solar system, and you agree to
buy its power.
There is no upfront payment. The plan starts at a
discount from today's highest tiered rates, and
escalates at less than historical market rates. (The
rate
presented at the workshop was 26 cents/kWh, with an
escalator of 4.5%.) After 6 years, you have the option
to buy out of the contract or to renew it. HeliomU takes
care of monitoring, maintenance, parts, and
repairs.
For more information, contact HelioPower's Vanessa
Wendling at 1 (866) 765-2755.
Other Financing Arrangements for Residential
Systems
Different solar installers may offer different financing
products, whether in the form of a loan, a lease, or a
PPA. As you shop, be sure to compare tax or rebate
benefits, the upfront commitment, the cost or
anticipated cost of electricity, whether or not
production is guaranteed, who is responsible for
maintenance, and, finally, what happens at the end of
the contract.
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| Santa Monica On the Map |
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Al Gore recently issued a challenge to "people who
have the courage to make a change."
In
Santa
Monica,
residents ARE moving toward renewable energy. The
map above
shows all the sites where solar can be found!
Solar Santa Monica wants to be able to
recognize all its Solar Campions. Is your system is on
the map? Check with
Brenden McEneaney to be sure: (310) 458-8549.
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| Solar Squad Activities |
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If you are out and about during the day, you may have
met a member of our Solar Squad -- an enthusiastic
group of college students on summer break. The
Squad's six-week assignment: to reach as many
residents as possible with the offer of Solar Santa
Monica's free solar service. The Squad has
disbanded now, but here's what it
accomplished:
Squad members knocked on
4,624 doors - every
single home rated R-1 -- talked to one out of five
residents, and left behind a useful efficiency checklist
and invitation to call for a Solar Site Check.
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| Meeting Shoppers |
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Solar Squad members also set up tables at busy
grocery
stores to reach other residents. (Interestingly, a lot of
people come from out of town to shop at
our "green" stores!)
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| Raffle Prizes |
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Farmers' Markets are always a great place to tell the
solar story. On June 29, the Solar Squad held a raffle
and gave away prizes to delighted residents.
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| "It's a parade!" |
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The Squad celebrated Energy Independence along
with the rest of Santa Monica on July 4th.
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| Solar Site Checks in Process |
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With all the activity, our field team has been busy!
Over the past three months, Michael and Matt have
completed Solar Site Checks at
74 businesses and homes -- like at the penthouse
condo above. Each owner is provided with
recommendations about efficiency improvements and
an estimate of the property's solar potential.
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| And if you look carefully... |
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...you may see installs like this one, barely visible
above the roofline of this house on Sunset Avenue.
NOTE: As of today, the Solar Investment Tax Credit for
residential installs is still scheduled to disappear at
the end of 2008; the business tax credit is scheduled
to drop from 30% to 10%. If you are considering solar,
now is the time to get the process started to be sure
you get the ITC. Contact Solar Santa Monica to
schedule your
Solar Site Check.
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| Heads Up! |
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Recent developments you may want to know about:
- SCE utility rates may increase as much as
30% next year, according to Akbar Jazayeri, vice
president of regulatory operations. Only customers
within the three highest tiers - the heaviest users -
would be affected by the proposed rate hikes. While
this is sobering news for customers, it means SOLAR
systems will be even more valuable!
- Net Energy Metering means the utility
charges you
each month for the energy you use, but gives you off-
setting credit for the energy you generate. They may
send interim bills for basic charges, but won't "net
everything out" until the end of the year. This could
mean a bill you didn't expect. To avoid surprises, be
sure to opt for monthly and not annual billing.
- A Santa Monica gas safety ordinance
requirement is
being triggered by some solar installations. Find out
from your contractor if you will be affected.
Finally, the City of Santa Monica is pursuing another
financing alternative for solar owners, namely,
allowing them to borrow through a City program and
then pay the loan back using a special property tax
assessment. The legislation enabling this
mechanism should be signed this week -- watch for
more news in our next Update.
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| Solar Santa Monica is administered by the City of Santa Monica's Energy & Green Building Programs office. |
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