How to Save 20% on Going Solar!
Going solar is like purchasing your electricity upfront for the next 20 years with a one-time payment. Yeah, you may save money in the long run, but the upfront payment is no joke. Currently solar photovoltaics cost about $8 per watt (installed), so a four kilowatt system will set you back about $32,000 before state and federal incentives.
Photo credit: Pete Beverly, NREL/DOE
A new model of solar purchasing appears to be coming of age: community solar purchasing programs. Last month, two colleagues in the Local Clean Energy Alliance and I carpooled to a workshop by the Downtown San Jose Solar Project about their experiences setting up a community purchasing program.
Community purchasing programs are a mechanism for aggregating the community’s purchases of solar photovoltaics and thermal arrays to receive a discount. By pooling their purchasing dollars and buying in bulk, neighbors can save 10-20% or more on their installation. In this arrangement, individuals own their solar arrays.
Coupled with the federal and state incentives, this can considerably lower the out-of-pocket cost of solar arrays to such an extent that they are cheaper than purchasing electricity or gas from the utility (when the time value of money is taken into account). Going solar becomes an even better deal when one considers the probable increases in the prices of fossil fuel based electricity over the next couple of decades.
Solar City - a solar installation company – was the first in the U.S. to implement community purchase programs whereby homeowners get volume discounts when their neighborhoods go solar and continues to use this as their primary business model.
Photo credit: Charles Watkins, NREL/DOE
In October 2006, Solar City aggregated a Portola Valley neighborhood’s purchasing power to receive bulk purchase discounts on a total of 343kW of photovoltaics. The threshold for receiving the bulk discount was 175kW. The solar panels were installed on 78 homes within four months with an average residential installation of 4.3kW. The savings for the community aggregating their orders was 20-30% per array installed. After the bulk discounts as well as the CSI incentives and Federal tax credits, the fully amortized monthly cost of these installed systems is less than their previous utility bills. Such programs can be controversial since the “discounts” are being offered by one company in a non-competitive bid situation.
Recently, a neighborhood group - the Downtown San Jose Solar Project - banded together to purchase solar in bulk and find their own solar installer through a competitive bidding situation. They put their collective requirements for three solar systems out to bid by several solar companies to get the best price, quality, etc. As of the beginning of this month, the project includes 24 San Jose homes producing 99kW of electricity. The 24 systems in San Jose will produce 3,560,000 kWh over the systems’ lifetime and will eliminate, according to today’s current fuel mix, about 5,055,861 pounds of carbon dioxide. The community group wants to see this program spread across the Bay Area and hopes the training inspired people to set up their own community purchasing programs.
