When I grew up, “the solar system" was a big, big, really big place, way the hell out there in outer space.
Today, “the solar system" is something that we’ve installed on the western-facing roof of our barn. And this shrunken solar system generates 6.27 kilowatts of electricity, or about 10,125 kilowatt-hours the first year. This will cut our annual PG&E electric bill in half.
Yes, Green is the way to go these days and yes, installing a solar electricity system is good for the environment. Our tiny system will reduce our planetary CO2 emissions by nearly 22,000 pounds a year, which is the equivalent of not driving nearly 310,000 miles a year!
But nothing was a stronger inducement to “go solar” than this economic reality: I will get a 14% Return on my Investment (ROI) in the first year alone, a figure that will grow annually as PG&E rates raise.
Better yet: this is a 14% after-tax ROI, which means the investment to “go solar” repays the equivalent of about 20% in pre-tax dollars per annum. Try to get a 20 percent return in the stock market year after year! (In the economic swamp in which we find ourselves just now, 20 percent sounds mighty good; oh how I wish that ALL our investments paid off so handsomely!)
Thinking that we wanted to “Go Green” and reduce our dependency on PG&E, I called and interviewed a number of Bay-area solar firms before choosing Borrego Solar, with offices in Berkeley and Petaluma, to install our solar electricity system.
I asked Will Feeney, an energy consultant with Borrego, to determine if our home was a candidate for generating solar electricity and if so, how large a system we might install.
“Forget about the eastern-facing roof of your barn,” he said. “There’s not enough exposure to bright afternoon sun to pay back the investment in panels on that side of the barn.”
So instead of selling us panels for the sake of selling more panels, he was honest and forthright, inspiring our confidence in Borrego Solar.
While other firms interviewed also suggested that we only install solar panels on the western-facing roof of our barn, none offered the amazing leaseback program, which Borrego Solar and an outfit called SunRun have developed.
Now it’s not an authentic leaseback system, not in the legal sense, but because it behaves like one, I am taking the liberty of describing it as such. In a way it’s a bit like leasing a car; someone else lays out the dough for the car on Day One, and you agree to lease it for a certain period and to pay for the miles you put on it. You don’t own the car during the duration of the lease, someone else does, and that someone else has to look after maintenance, repairs, etc. Which is how the solar service program works with Borrego/SunRun.
In their case, they install solar panels on your roof for about a third of the price you would pay if you bought the system outright. They also include a sexy monitoring device that calculates exactly how much energy is being generated.
In effect, Borrego Solar/SunRun pay for the system, then lease the sun collectors back to me for the next 18 years. And during all this time, they have total responsibility for maintaining the system, keeping the panels clean and functioning at capacity. I pay SunRun for kilowatts generated at a rate that is about one-third the price of those charged by PG&E at the top-tiered meter rate.
In the commercial world, stores like Macy’s, Staples and Whole Foods have installed panels under this innovative program, known in the trade as PPA – Power Purchase Agreement. Now, for the first, time, this same service deal is being offered to residential customers by Borrego Solar and SunRun.
Here’s another part of the deal, which I really like: If the solar electricity, which the system is calculated to generate, falls 5% or more off projection, SunRun pays ME for the under-generated kilowatt-hours, as a sort of penalty for failing to live up to our agreement about how much electricity the system will generate.
As long as the system hums along, converting solar rays into current, which we put back into the PG&E grid, I pay Borrego Solar/SunRun 13.5 cents/kilowatt for electricity generated. This fixed rate is about one-third what I would pay PG&E at today’s top-tier metered rates (afternoon summer pricing) and the Borrego/SunRun rate never changes over the next 18 years. So even in 2025, I will still be paying 13.5 cents per kilowatt generated and who knows how much the PG&E rates will be by then? Surely more, not less, than what they are today.
In summary, we cut our electric bill in half this year and got a 14% after-tax return on our investment. This ROI is likely to grow annually for the next 18 years, as PG&E raises its rates.
Too bad we don’t have a larger barn roof – I’d install a HUGE solar panel system and retire on the savings/investment!
If you live in California, where Borrego Solar/SunRun operate and offer their unique solar service program, I suggest that you investigate your own savings potential. I haven’t found a better way to save, or make, this much money, while doing the “right thing for the environment.” If you figure out a better angle, contact me. Until then, I suggest you contact Will Feeney, energy consultant at Borrego, to set up a property inspection and learn whether you are a candidate for the program. His cell is 510-367-4556, or reach him by email at [email protected]
Need more information? Full details of the Borrego/SunRun plan can be found at http://www.borregosolar.com/sun-run/ or at http://www.sunrunhome.com