CT Solar Lease: The Basics

Published on May 16, 2009 by Tor a.k.a. "Solar Fred".
Categories: Affordable Solar, Solar Lease.

Listen up Connecticut home owners!LAPanelsClownfish CT Solar Lease: The Basics

If you meet certain income thresholds, you currently have access to one of the best solar power deals available today for your Connecticut home.

This is not a purchase, but a solar lease. In this post, we’ll go over the basics of this Connecticut version of a solar lease, and in the next post, we’ll look at the pros and cons of this particular program. Overall, however, Solar Fred thinks it’s a great affordable, no-money down deal.

In terms of qualifying for this solar lease:

  • As the name implies, you must own a home in Connecticut and you also must be a customer of CL&P or UI utilities.
  • Your household must make less than 200% of your area’s median income and those thresholds vary by how many people live in your household. See this chart here. But it’s pretty generous. For example, if you’re a 4 person household in Bridgeport, you qualify if you make less than $162,00 a year. If you make more than the 200% formula, than the thinking is you can afford to buy and benefit from the 30% Federal tax credit.
  • Your FICO credit score has to be good, not great, at around 650 or better.
  • The amount of home equity left in your home is not a factor.
  • Finally, the program approved solar installer is going to have to make sure that your home is right for solar. Typically, this means you have to have a South, South West, South East East facing roof, your roof’s in good condition (5-7 years old), and you’ve got minimal shading on the roof.

Now let’s talk about how much:

  • Nothing up front. O. Zero. Zip. Hello? Nada.
  • The minimum term of the lease is 15 years. It’s extendable to 20.
  • As always, your monthly cost will depend on how much energy you use and how much you want to offset by the solar panels.
  • A typical 4KW system will run you $97 a month. A 5KW system for larger homes will be around $120 a month. If you decide to extend the lease to 20 years, that gets kicked down to a sweet $29 a month for the 4KW system and $36 a month for the 5K!
  • For really big energy hogs, a 10Kw system is $238/month for the first 15 years, $71 for years 16 to 20.
  • If they size it right, your solar lease payment plus whatever’s left over from your regular bill should be less than what you’re now paying. Perhaps not by much, but less. So again, no-brainer.
  • The lease payment is FLAT. So unlike the California Solar City lease model, there’s no increase in your lease payment every year. Nice.
  • You get “solar dividends.” This is a standard program that allows you to share in the sale of the panel’s Renewable Energy Credits (RECs). RECs are similar to carbon credits and their price is variable. The money earned goes into an account that you can use towards paying for a new inverter or eventually removing your system. Inverters usually conk out every 10-15 years.
  • You can buy your solar system for fair market value (FMV) after 20 years. This could be almost nothing or a few hundred bucks, but nobody knows until we get to 20 years from now.

So what’s the risk in all of this:

  • It’s a 15 year, or more likely, 20 year commitment. But the lease is transferable to a buyer, so there’s a good chance that’s not going to be a big deal. It might even help the sale.
  • It’s a bumper to bumper warranty for 5 years. After that, you take care of everything. But solar is notoriously low maintenance and the panels themselves are warrantied for 25.
  • The maintenance is up to you and so is the panel performance. That means if you don’t wipe down your panels every few months or you decide to plant a tree for more shade, don’t blame the CT Solar program if your regular electric bills are going up.
  • When you decide to end the term at 15 or 20 years, it’s going to cost you something to take off those panels. How much? Depends on the (un)-installer at that time. But by law, you can’t yank them off yourself. But your Solar Dividends account is expected to take care of this cost.

In the next post, we’ll get into a more pro and con analysis. Meanwhile, if you live in Connecticut and want to get more specifics, call one the program’s pre-qualified installers and get a quote. Couldn’t hurt.

(Photo: clownfish/flickr)

Solar Insights: Solar Leases, PPAs, etc

So, I’ve been thinking…. Always a bad thing. Nevertheless, over the next few weeks, I’m going to start focusing on the benefits–and challenges– of solar leases, PPA programs, and later, the CityFirst municipal programs that are beginning to sprout up throughout the country.

The leaders of the solar leasing movement are:

  • SolarEclipse Solar Insights: Solar Leases, PPAs, etcSolar City in California, Oregon, and Arizona
  • Sun Run for PPAs (Power Purchase Agreements) and/or leases in California, Arizona, and Massachusetts
  • CT Solar Lease, a Connecticut only partially State funded program in partnership with the Connecticut Clean Energy Fund, AFC First Financial Corporation, US Bank, and a visionary company, Gemstone Lease Management, LLC, which is developing other leasing models in other States too.
  • There are others, but these are certainly the ones that are the most prominent. I’ll get to others eventually.

Now, I know I’ve outlined the basics of solar PPAs, solar leases, and municipal CityFirst programs in my Cash Poor series of posts, but I’ve realized I need to spend time and be more specific about each one.

Why? First, because these programs vary greatly. But more importantly, because in talking to both consumers and even some solar professionals, there is still the misperception that solar is a lovely, a green idea, but people can’t afford it right now. It’s not practical. Yada, yada, yada. I’ve tried to assuage these concerns with other posts, but it’s not enough.

Don’t get me wrong. Home equity financing is still a great deal over the long term for residents in most states–though not neecesarily in Connecticut. (I’ll get to that in the next few posts.)

Even so, if you want to keep what’s left of your home equity in reserve AND YOU STILL WANT TO SPEND LESS ON YOUR CURRENT AND FUTURE ELECTRIC BILL, than these three models are clearly the best way to go today with little or no upfront cash.

So, yes, damn it, you can have your solar and afford it too, and I will make the case for why that’s possible with the CT Solar Lease over the next several posts.

Solar Bonus: Increasing Home's Value

Published on May 15, 2009 by Tor a.k.a. "Solar Fred".
Categories: Buying Solar, Los Angeles Solar, Solar Components.

NiceSolarHome Solar Bonus: Increasing Home's ValueI’m re-posting this towards the top of the blog because of a NY Times blog post about home owner associations getting in the way of people putting up solar panels.

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Dear Solar Fred,

My husband, who’s also named Fred, says that if we get solar panels, we’re going make the house look bad and bring our home value down. I’ll bet him a night out on the town that it’s not true. Is he right, or am I right again?

Helen of Los Angeles

Get your dancing shoes on, Helen. According to the US Department of Housing and Urban Development your home’s value rises $20,000 for every $1000 in reduced yearly electricity cost. This includes getting a more efficient heating and ventilation system and redoing the insulation and all of those important things. But back to solar.

Let’s say you get a new 4.6KW solar system that costs you two $12,769 after all of the state rebates and tax credits and financing charges. Let’s further assume the system reduces your $100/month average electric bill to an average of $12/month, saving you $88.00 per month. So what are your benefits to your home’s value?

  • First of all, you can brag about the buyer having a $12/month electric bill (assuming they keep the same energy usage). That should be attractive.
  • Per the Department of Energy, you’ll see an increased home value of $88 x 12 = $1056/year electric savings, which equals a little more than $20,000 added to your home value! Cool! But there’s more:
  • In California, by law, the State tax assessor can’t raise the value of your home based on a solar energy improvement. So that’s more money saved while you’re in the home.
  • If you’ve financed financed through a home equity loan, you get to write off the loan’s mortgage interest.

As to it panels looking ugly, some say that solar panels are actually more attractive and unique and desirable because they say that the owner is environmentally conscious. That’s pretty hip these days, unless you live in a “Drill Baby Drill” kind of State. In fact, compared to a non-green home in the same neighborhood, I’ll bet that a real estate agent will tell you that a solar home will sell faster.

Check out this video about how solar increases the value of your home.

So, between the new low upfront cost options, and the rise in value of your home, you’re right, you’re hubby is wrong, and why can’t you kids just get along and get a solar quote tomorrow? What’s to lose except the above?

Video: Cars, Batteries, Solar, Part 2

Published on May 13, 2009 by Tor a.k.a. "Solar Fred".
Categories: Los Angeles Solar, Solar Components, energy efficiency.

As I mentioned in a recent post, there is a “Battery Station” coming near you that will be integrated with electric cars from Nissan and Renault (and perhaps other manufacturers who sign up. Hello, GM?)

This car-Battery & Go model will be a reality in several countries and here in California and Hawaii in the next several years.

Better Place just posted this demonstration of their Battery Station (instead of the gas station). The whole process takes about a minute and a half. Oh, and how do these stations get their power to charge the batteries? Why (partially) through solar panels, of course. See the panels on to left side as the car drives into battery station

YouTube Preview Image

Solar Cash: Rent Your Roof

This may be a new trend in solar energy, but if you live in North Carolina and have plenty of Southern sun exposure, Duke Energy wants your roof.

The program, outlined here, works like this:

  • You have to live in North Carolina and be a Duke utility customer.
  • Your roof has to be 5 years old or less.
  • You’ve got to have little or no shade on the roof and the roof should face South or close to it.
  • Duke energy puts solar panels on your roof, at no cost to you, and pays you a rental fee “based on the size of the installation and amount of electricity generated at any given site.”
  • You don’t get the power or pay for the power. Instead, the energy goes right back to the grid.
  • You pay your regular electric rates to…Duke.
  • Duke maintains the panels.
  • This is NOT a residential PPA system
  • You are being green, however, and that’s nice.

So you do get something (not sure how much) for Duke using your roof as a solar power generator. Of course, the downside is that you don’t get to put up your own solar panels. Also, not sure what they do about maintaining your roof. But it’s a cool new way to go solar and you can sign up here.

Naturally, if you’re not in North Carolina or can’t get in on the program, please consider getting a quote from an experienced local dealer. Quotes are free, so what do you have to lose?

Cash Poor Financing: CityFirst/Municipal Financing

SolarGrasWall Cash Poor Financing: CityFirst/Municipal Financing

This is the fourth and final answer to Cash Poor Solar Richard, who wrote that he wanted solar panels, but had no upfront cash to pay for them. To recap:

  • Part One talked about solar leases, a no money down option, similar to a car lease. This is a good option, but you also must have really good credit.
  • Part Two showed you the ways of a Power Purchase Agreement (PPA), a very little money down solar financing solution, where you don’t own the solar panels, but instead pay a set electric rate to the PPA company.
  • Part Three talked about 0 down, relatively low interest financing. This one is the best solution available, as far as I’m concerned…if you have enough home equity. But there are even programs with unsecured financing as well.

If there’s one thing better than 0-down financing, it’s 0-down financing that doesn’t lock you into staying in your house for 15 years or carrying your solar panels to the new house, and doesn’t care about your home equity or debt to income ratio. Who could be this easy with credit?

Why, your City…if you live in Berkley, California or Palm Springs, California, Boulder Colorado, and a few other places listed here.

CityFirst is an initiative that finances solar for homes and businesses through city or county bonds. Any city in California (or any state) can adopt this model, but so far only two have. San Diego and Los Angeles are reportedly offering the program in the near future, perhaps the summer or fall of 2009.

The highlights:

  • Basically, no money down.
  • You pay over 20 years at a fixed interest rate (around 7% right now.)
  • You pay a special tax assessment with a tax lien against your property. Thus, your solar panels are NOT subsidized by fellow citizens, just you.
  • You’re entitled to all of the state rebates and Federal tax rebates, currently a 30% tax credit.
  • You can write off the interest on your taxes, like a second mortgage.
  • If you sell your house tomorrow with the solar panels, the tax lien and the solar equipment gets transferred to the new owner. No fuss, no muss. The new owner takes over the remainder of the debt–and the benefits of solar for their new home.
  • You get to choose any California registered solar installer. So you don’t have to go with the big guys, only. If Uncle Dwayne is on the list, go with him. Hopefully, he’s NABCEP.
  • To qualify, you can’t have declared bankruptcy in the last 7 years or have a really crappy credit rating. The program’s easy, but it’s not that easy.

If your city isn’t doing this program, call your mayor, councilman, the newspaper, local bloggers, and ask why the &#% not. It’s a no-brainer.

As an example of the deal in Berkley, if you financed 15 grand (about a 4kw system) worth of installed solar panels after State rebates, your equivalent monthly tax payments would be about $120/month. Not bad. Solar Fred likes it. You should like it.

If not, go with option 3, home equity financing. If you can’t do that, go with leases, option 1. I’m less of a fan with PPAs these days because of the typical upfront costs that are usually more than $1000 advertised. But PPAs are VERY variable, so as solar heats up, you may find different models.

If there’s a municipal program in  your area, you can find a qualified installer here and get a free quote.  It’s free, so nothing to lose but a bit of time. Check out the form here.

Energy Info: Home Green Home

Published on May 11, 2009 by Tor a.k.a. "Solar Fred".
Categories: Solar Components, energy efficiency.

Citigroup center Energy Info: Home Green HomeThough I now live in Los Angeles, I grew up in New York, so I’m partial to the New York Times, which has two great blogs devoted to energy issues.

Green Inc is more business oriented, but Home Green Home is the Green Inc editor, Tom Zeller Jr.’s personal experience with buying an old home and greening it.

Home Green Home in particular is a great resource for ideas on how to green your home, save energy, and to see how Mr. Zeller is managing his home greening project. The blog also includes several brief videos, including this one about the world’s greenest New York High Rise Condo with solar panels….also a very expensive one at $1300/square foot.

But even here, Zeller delivers good, basic reminders (through a guest) about how anyone can cheaply reduce their energy and water bills in their home with a simple acronym reminder: C.R.A.W.L. I won’t reveal the meaning of these letters so that you’ll go to the Times website, but I’ll tell you that the first letter, C, stands for CFL light bulbs.

Video: Grow Fresh Air

Published on May 10, 2009 by Tor a.k.a. "Solar Fred".
Categories: energy efficiency.

Aside from solar decreasing carbon spewed into the air, here’s yet another cheap way to inexpensively clean your indoor air with plants. Yup. Plants. About 4 per room, per person. Not only does it give you fresh air and reduce respiratory problems, it also reduces your electric bill because you’ll require less air conditioning. Curious? Watch this 4 minute presentation and head to your local garden center now.

Top 10 Solar Myths

solar myths alps

So I keep getting emails from random people around the States saying that they can’t go solar because of this or that, including expense and physical limitations. Some of these concerns are valid, but others not. So, here’s my Top 10 Myths about going solar.

Myth#1: Solar is too expensive.

This really depends on your State and utility. There are more and more solar friendly states that are cutting the price of solar in half if not more, plus the Federal 30% tax rate. Check out out the right hand side of this page and the DSIRE website for a summary of all the State programs now available. If you finance through your home equity or second mortgage, you also get the benefit of a tax write off on the interest. I also just recently wrote about how solar raises the value of your home.

Myth#2: Even if it’s less expensive, I don’t have the upfront money.

One of my most read group of posts is Cash Poor financing series. These talk about solar leasing, solar PPAs, 0 Down financing, and the growing number of cities financing solar through tax assessments. All of these require very little money down. Similarly, a second home mortgage or government energy efficiency mortgage also has little upfront costs.

Myth#3: Solar will get cheaper, so I might as well wait.

While it’s true that improvements in technology and competition is making solar panels cheaper, the current number of State and Federal incentives are also getting less generous as these prices come down. So if you’re already in a solar friendly State or municipality (see #1 above), then yes, wait until local incentives improve. On the other hand, if you are in a solar friendly State, the price is going to remain about the same for the next 10 years, so might as well start saving on your electric bills now. For more on why it might not make sense to wait, check out Dan’s recent post: The cost of the “let’s wait and see” solar buying reaction.

Myth#4: Making solar panels causes more pollution than the clean energy they produce.

Nope. A study by the US Department of Energy shows that, depending on your solar panels, the energy payback is 1 to 4 years. Solar panels usually last 25 years, so solar manufacturing is very green. That said, if you buy American made panels, it saves more carbon from the transport costs. Something to consider in choosing your panels.

Myth#5: Solar panels will cause more harm to the environment when they’re thrown away in 25 years.

Actually, most panel manufacturers will recycle the panels after you’re through in 25 years. If they don’t, don’t buy those panels. However, it’s hard to say whether people will actually recycle them because most panels are still being used today. So it’s up to you find out about the manufacturer’s panel recycling program. From what I understand, they will come to you and take them away at no charge.

Myth#6: Solar will look ugly on my roof.

Check out my post about Thin Film vs. Silicon based solar panels. They’re making solar panels these days to look just like regular roofs or shingles. Yeah, they’re a little more expensive, but they should still pay for themselves during their lifetime. Plus, remember that any solar panel, no matter what they look like, can raise the value of your home. In California, this improvement is exempt from a tax reassessment. Plus, many home buyers see solar as an attractive green statement, so your home might sell faster than another in your neighborhood.

Myth#7: Solar is hard to maintain.

If you buy a system that is connected to your utility, as most electric systems are, your solarSolarCleaning Top 10 Solar Myths panels are easy to maintain. They just need to be cleaned off with water to get off dust or debris or snow. And by the way, panels are pretty hardy, designed to withstand hail, sleet, and snow. On the other hand, if you buy a battery based system, then yes, this will require more attention–and expense. But grid connected systems without batteries are the most inexpensive and common for most home owners.

Myth#8: I live in a cloudy, cold, climate, so Solar doesn’t work.

Solar works just fine in cloudy or cold climates. See the above photo and also this video about a Seattle installation. The payback will be slower, that’s true, because you’ll be using more utility power than if you lived in a more sunny state. But remember that solar panels are guaranteed for 25 years, typically, but often keep going for 30 years and more. And by the way, solar panels like sun, but not heat, so cold climates can actually make the panels more efficient.

Myth#9: The utility grid can’t handle my solar panels.

First of all, residential solar systems carry relatively little energy, so it’s not going to affect most existing wires unless they already needed repairs. What is true and has been in the news lately is that these large solar and wind farms need some serious infrastructure to carry their green energy from the rural open spaces where they’re being built to the grid. Also, the U.S. grid remains one of the most reliable electric systems in the world. Overall, the grid is working fine 99% of the time. That’s why for most urban and suburban people, battery back up systems aren’t that cost effective. That being said, the grid is behind in terms of being “smart,” so we do need new technology to more efficiently allocate all of our energy, whether solar or coal.

Myth#10: I don’t know if my house i
s right for solar.

Fair enough. First, check out this post about doing a little self evaluating for solar. Then check out this post to find an installer in your area to give you a free quote. An on the ground solar installer is usually your best source of real info. If you fill out our form, we’ll send it to a local installer in your area who will set up a time to give you that free evaluation. Free is good, so what you can you lose?

If solar is not right for you, no worries. At least you know and you learned a lot about solar. Pass that knowledge on to someone on Face Book who may be right.

Video: Why Solar Now

One of the things that inspired me to become re-educated about solar–something that I had merely thought was “neat” as a kid–was seeing Al Gore’s movie, “An Inconvenient Truth Video: Why Solar Now” and “Who Killed the Electric Car? Video: Why Solar Now” in one day in 2006. In the latter, I first learned about thin film solar, and I realized how solar was a way to stop what I’d seen in the first movie.

In this brief (7 minute) update, Al Gore succinctly shows the importance of “Repowering” America with alternative energy within 10 years. Aside from solar being affordable now, this video is why I keep saying to those who return to this blog and those seeing it for the first time, get a quote. Please.