Pay for my solar panels!

Solar is a hard sell in the midst of global recession and continued unemployment. Just try convincing a middle class family with a mortgage and car payments to part with $40,000 for a rooftop installation. So long as rooftop builds are the only way to get solar energy, the growth of the home solar industry will plod along, subject to macroeconomic whims.

Here’s where innovation comes in. It wasn’t that long ago that owning an in-home radio required massively expensive and short-lived parts, including a rooftop antenna. However, public and private investment in radio led to a chain of innovations, from longer-lasting tubes to FM transmission. Of course, skeptics doubted the commercial clout of the radio, just as some doubt the viability of developing a solar transmission infrastructure.

Might critics be wrong again?

Planet Forward contributor SunRun has an innovative idea to increase the spread of solar power without a five-figure commitment: Power purchase agreements. These nifty tools allow forward-thinking homeowners to buy solar power without setting up their own rooftop rig. By allowing consumers to select between dirty-burning coal and clean renewables, SunRun positions solar to stand on its own merits.

This plan activates what I call the “moral market.” Given the choice between powering your home with coal or solar, which option are you most likely to choose? Studies have shown that consumers will pay more for a product that makes them feel good about their choices, even when there’s no practical difference in quality. Solar offers both qualitative and quantitative differences.

A 2009 survey shows 9 in 10 consumers want solar, but few can afford to install rooftop arrays. By offering the chance to buy solar power without installations, companies like SunRun, Sungevity and others can expand the market – and money – surrounding solar innovation. That could be a game-changer in a down economy.

1. 
   On March 19th, 2011 at 7:08 pm Joe Stack Said:

   Oh, great! another one of those articles that promise much and deliver nothing. Where’s the beef? If you look into these companies, and you have to dig deep to get past the hype, they are not selling solar power without the solar rooftop rig. They are selling very pricey leases on rooftop solar rigs that cost more than the rooftop rigs are worth. The “savings” amount to about $10 a month for most people. Outside of a few special cases – usually loudly trumpeted, this kind of solar is just another one of those the Wall Street hucksterisms that brought us the economic collapse of 2008 and the Great Recession. You will end up paying the cost of the lease for 15 YEARS to some bank (who carries the lease) for a $15,000 to $30,000 solar system (at a 3% plus annual hike in the payment) that is actually worth $5000. And, oh yes, you STILL have to pay your electric utility almost full price for the power you use. And guess what? At the end of the very expensive lease, you STILL DON’T OWN THE SOLAR INSTALLATION. It’s like paying a $1000 a month car payment to a 3rd party and paying the car dealer $900 a month for the same period and then giving the car back after you’re done. This is a scam, pure and simple. It’s too bad that somebody hasn’t really done something about the high cost of solar and the massive up-front payment. THAT’S what’s really holding back the industry.

2. 
   On March 21st, 2011 at 2:52 pm Carrie Winans Said:

   Hi Joe,
   You seem very passionate about this issue. While I can sense that you understand the flaws with this program, I was wondering if you had suggestions about what needs to be done? We always invite our contributors to submit ideas of their own! If you think you know a more efficient way to do this – please tell us!

   Thanks,
   Carrie

3. 
   On March 21st, 2011 at 2:58 pm Max Burns Said:

   Joe,

   I don’t think we’ve met. Can I call you Joe? Great.

   Joe, I’m well aware of the various solar leasing systems cropping up around the country, and you’re absolutely right – some are just schemes to lease out solar equipment at rates that have almost no discount from upfront installation. And I agree, you don’t own the solar installation on a leased property any more than you own a leased Taurus. But when’s the last time we went at car companies with pitchforks over leasing payment plays?

   Anyway, my point is this: What SunRun is doing is closer to expanding the pool of available solar energy than leasing out individual home solar arrays. By allowing a consumer to purchase power generated from solar (and, eventually, other delivery methods), we’re in effect giving consumer choice to those willing to pay for a specific form of generated energy, just like Whole Foods offers alternatives to mainstream grocers like Kroger.

   I’m with you on cost, Joe. But one of the ways to bring down cost is to allow the innovative process to follow through like this.