For Homeowners, Power Purchase Agreements Are Key

21 June of 2010 by

solarroof5 For Homeowners, Power Purchase Agreements Are Key

For many homeowners, purchasing a solar panel system for their homeis simply not practical or does not make economic sense.

Even with payback periods as short as 4-6 years, they might not plan on living in their current home long enough to recoup the investment.Or, they might not have enough mostly south-facing roof space or roomin their yards for pole-mounted arrays. 

The solution: participate in a community solar energy system as aninvestor in a Power Purchase Agreement with a facility in your neighborhood that can benefit from the environmental and economic benefits of a solar photovoltaic system. Here’s how it is working for a group of individuals in University Park, Maryland with a system theyown atop a local church.

Primarily by word-of-mouth among friends and neighbors seeking toreduce their carbon footprints and research with solar experts in thegreater Washington, DC area, David Brosch and Tom Eichbaum co-foundedthe  University ParkCommunity Solar LLC.

This became the business entity that would activate an agreement toown a solar system and the electricity it generates. They surveyed avariety of area facilities including a library, retail shopping malland neighborhood schools and ultimately decided their first solarenergy system would go on the roof of the Church of the Brethren intheir own neighborhood.

Church Pastor Kim McDowell warmed to the idea of not needing to pay a large amount upfront for the system’s installation and the ability tofix their electricity costs for 20 years under what became a PowerPurchase Agreement. Brosch and Eichbaum networked together 36participants who collectively put up about $130,000 to purchase a 22kilowatt system (photo).

After much homework, they choose StandardSolar, Inc. and its Chief Technology Officer Lee Bristol todesign and install it and work with the local utility to interconnectthe system to the power grid.

Church of the Brethren uses most of its electricity on the weekendsand a few nights each week. During the day, the system is capturing the sun’s radiation and generating electricity.

What electricity the church does not use – especially on weekdays –flows out on to the grid which the system owners can bank kilowatt-hour credits for. If they don’t use up those kilowatt hours, they canmonetize the balance under a “net metering” law being updated in Maryland and inspired by theirstate Senator, Paul Pinsky, of Prince Georges County.

As owners, the LLC participants can claim their pro-rata share ofthe 30% federal investment tax credit, accelerated depreciation and asolar grant from Maryland. Each individual should earn back theirpro-rata investment within seven years and can look forward to a 7%return thereafter.

Their commitment to sustainability earned University Park a $1.5million grant from the U.S. Department of Energy to fund energyefficiency initiatives.

At a recent green-ribbon-tying ceremony at the Church, co-founderTom Eichbaum walked attendees through his fivepre-requisites to a community solar energy system.

Original Article on EnergyBoom

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