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Comments by Chip Gaul Subscribe

On Will SREC Prices Affect Solar Leasing?

Lib, thank you for your comment. there are a variety of models used by leasing companies, but the main 3 or 4 (i.e., SunRun, Sungevity, SolarCity) do not need to factor in SREC revenues to achieve their desired IRR. That's how they were able to set up shop in states like California, Arizona, and Colorado. Some of the installation companies and developers that offer a lease option (the Astrums and GeoPeaks of the industry, for example) have a different story to tell on the SREC front. It will certainly be interesting to see if the big leasing companies which have posted up in some of the SREC states do as well as they've been doing in non-SREC states, but I would definitely expect to see NJ SREC prices drop significantly over the next year or two, barring legislative action.

 

March 2, 2012    View Comment    

On Wait, Are You Paying for My Solar Panels?

Nice post, Stefano! A quick note on the SRECs and recovered costs- the 2% requirement ramps up over the next several years to avoid gluts in the market (hopefully, as so far Maryland has avoided the surges in installations and drops in SREC pricing like Pennsylvania and soon-to-be New Jersey...) The cost recovery for the SRECs is also spread out over all ratepayers (which as I'm sure you know, pay differentiated tiers based on consumption/consumer type), so there isn't a corresponding $.2/kWh increase on all bills. I'm not sure if you meant to suggest this, but I figured it was worth the clarification since many opponents of solar incentives site the burdensome costs to tax- or rate-payers. At least in the instance of SREC cost recovery, this is a very minimal amount.

That'll be all from me for now, otherwise I'll get into a convoluted discussion about tax benefits and indirect subsidies to fossil fuel exploration, transportation, and eventually electricity generation, which contribute to their low costs...

February 17, 2012    View Comment    

On How do solar leasing companies make money?

Hi Geoffrey, 

Thanks for your comment.  I don't think that a solar lease is any less sustainable than a direct solar purchase when it comes to the impact of the tax credits on tax payers.  In either case, it's the same 30% federal tax credit and the same local tax credits whether it's the home owner applying for them or whether it's a solar leasing company applying for them.  In fact, the leasing companies get a better deal on the panels & BOS because they buy in volume, so they would be getting a credit on a smaller amount which means that tax payers would be subsidizing a smaller amount.  

I haven't done much analysis on whether all of our various tax credits are sustainable... although I sure hope they are.  That said, in PG&E territory the price of panels is coming down about as fast as the rebates are drying up, so in that case the finance seems sustainable since it is due to run out pretty quickly.  

Solar leasing is by no means a silver bullet or a perpetual motion machine.  However it does allow people who have a good credit score (generally that means over 700) to go solar by paying less per month than they currently do for their electricity bill, rather than paying $15 or $20k (or more) up front for a system.  In the long run you save more money if you buy the system outright from the start.  But for many homeowners they'd rather just reduce their monthly expenditure on electricity via a solar lease, even though the savings won't be as great over the next 20 years.  

September 15, 2010    View Comment