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Consumer Technology solar

Published on December 8th, 2009 | by Susan Kraemer

40

US Solergy Offers 5 Cent per kwh Solar Bills With No Credit Check

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December 8th, 2009 by  

You don’t have to get a credit check to buy electricity from a utility. Now you don’t need one to buy your very own solar power supply either. A company in New Jersey is offering a solar PPA to homeowners to buy cheap power off their roof with no credit check.

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Not only does this put paying a solar bill on an even playing field with paying an electric bill, but US Solergy is offering this arrangement for 25% of utility rates in the state. After a small down payment, their residential solar power purchase agreement enables homeowners to buy their electricity for $0.05 per kilowatt-hour in a state where utility electricity costs $0.20 per kilowatt-hour.

How can they do that? Isn’t solar more expensive than utility electricity? Well, no, actually, solar is cheaper.

One of the little known facts I discovered about solar during my experience doing solar estimates,  is that solar is already far, far cheaper than utility energy. If you compare apples to apples: twenty five years to twenty five years.

It already truly does only cost 25% or less of what utility electricity costs… If you were to pay for all 25 years at once for utility electricity. Of course, you don’t. You pay monthly, and so you simply have no idea that you are paying more money over that time.

In New Jersey utility electricity rates have been going up about 6.5% annually. Say last year’s monthly bills averaged $100, this years will average to $106.50.  But, with the seasonal ups and downs of electric bills you really never notice this sort of creeping inflation – yet it can really add up.

What I found was that someone who will spend about $100,000 on utility electricity for 25 years, typically needs about a $20,000 solar roof to replace their utility kilowatt-hours a month. Here’s my post with the rate charts for PG&E customers (6.7% rate rise): Solar is Really Cheaper than PG&E.

US Solergy has leveraged this fact to be able to offer homeowners a PPA that reflects that saving. A PPA is a power purchase agreement – like you have with your utility.  The difference is: the power plant is on your roof. Just big enough for you. Like your utility, US Solergy owns the solar power plant, and sells you the power.

Kudos to this company for being the first to really demonstrate that solar is already cheaper.

“We all want to save the environment,” said US Solargy CEO David Wei, “and our company provides a way for everyone to participate in that important goal.”

Solar electricity is not just clean, sensible, climate-friendly electricity, but it is cheaper too.

Image: Peter Bennett Photography

Source: US SOLARGY

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About the Author

writes at CleanTechnica, CSP-Today, PV-Insider , SmartGridUpdate, and GreenProphet. She has also been published at Ecoseed, NRDC OnEarth, MatterNetwork, Celsius, EnergyNow, and Scientific American. As a former serial entrepreneur in product design, Susan brings an innovator's perspective on inventing a carbon-constrained civilization: If necessity is the mother of invention, solving climate change is the mother of all necessities! As a lover of history and sci-fi, she enjoys chronicling the strange future we are creating in these interesting times.    Follow Susan on Twitter @dotcommodity.



  • Mark Pitts

    The Susan Kraemer article on PPA systems is outrageously inaccurate:

    The article states that “solar energy is already far, far, cheaper than utility energy.”

    The article goes on to provide examples showing that solar is up to 87% cheaper than electricity for a large house.

    That is JUST NOT TRUE. The errors are numerous. Here are the most egregious:

    ERROR #1: In the calculations you never include the 25 years worth of monthly payments that you have to make to the PPA company. In other words, you omitted 300 monthly payments from your comparison !

    ERROR #2: You ignored the time value of money in your calculations. This is an enormous error, especially for a period as long as 25 years.

    ERROR #3: Electricity price inflation is no where near the 6.7% number that you use. Look at the following government data and you will see that there has been modest inflation since the 1980’s. http://www.eia.doe.gov/cneaf/electricity/page/fact_sheets/retailprice.html

    ERROR #4: The company states that you have to buy all the electricity the system produces — (whether you need it or not). Batteries, if feasible, are presumably extra. How was this factored in?

    ERROR #5: You have a 25 year obligation to buy all the electricity the system produces, as does anyone who buys your house (unless you “buyout” the company – at an unstated price). If you want to move, you have a big problem. How was this factored in your calculations?

    Don’t we all have an obligation to at least do the math correctly and not mislead people?

    Mark Pitts

  • Mark Pitts

    The Susan Kraemer article on PPA systems is outrageously inaccurate:

    The article states that “solar energy is already far, far, cheaper than utility energy.”

    The article goes on to provide examples showing that solar is up to 87% cheaper than electricity for a large house.

    That is JUST NOT TRUE. The errors are numerous. Here are the most egregious:

    ERROR #1: In the calculations you never include the 25 years worth of monthly payments that you have to make to the PPA company. In other words, you omitted 300 monthly payments from your comparison !

    ERROR #2: You ignored the time value of money in your calculations. This is an enormous error, especially for a period as long as 25 years.

    ERROR #3: Electricity price inflation is no where near the 6.7% number that you use. Look at the following government data and you will see that there has been modest inflation since the 1980’s. http://www.eia.doe.gov/cneaf/electricity/page/fact_sheets/retailprice.html

    ERROR #4: The company states that you have to buy all the electricity the system produces — (whether you need it or not). Batteries, if feasible, are presumably extra. How was this factored in?

    ERROR #5: You have a 25 year obligation to buy all the electricity the system produces, as does anyone who buys your house (unless you “buyout” the company – at an unstated price). If you want to move, you have a big problem. How was this factored in your calculations?

    Don’t we all have an obligation to at least do the math correctly and not mislead people?

    Mark Pitts

  • Mark Pitts

    Susan Kraemer,

    SHAME ON YOU!

    The CleanTechnica ad is the worst kind of misleading advertising.

    [SK This is an editorial]

    If you were on Wall Street, people would be clamoring to have you put in jail for that kind of advertising, and rightly so.

    You mention, but totally ignore, interest in your calculations. And then build in an inflation rate that is totally ridiculous in this economic environment.

    [SK: ?? I include interest paid for a solar loan. The inflation rate for electricity prices is a matter of public record. In CA its been 6.7% since 1970s for example. Ridiculous, but true.]

    It is totally deceptive to say the time value of money clouds the issue because one is always going to have to pay for energy. You also ARE going to have to pay interest, or FOREGO the interest you could have earned.

    [??? Cite mentions of time value of money. Getting free solar once panels are paid off means you then get free energy. “forgo interest you could have earned”… what??.]

    It clouds the issue only because it deceases your sales.

    I hope you are not one of the people excoriating the prime-loan brokers. You have become one of them!

    SHAME ON YOU!

    Mark

  • Mark Pitts

    Susan Kraemer,

    SHAME ON YOU!

    The CleanTechnica ad is the worst kind of misleading advertising.

    [SK This is an editorial]

    If you were on Wall Street, people would be clamoring to have you put in jail for that kind of advertising, and rightly so.

    You mention, but totally ignore, interest in your calculations. And then build in an inflation rate that is totally ridiculous in this economic environment.

    [SK: ?? I include interest paid for a solar loan. The inflation rate for electricity prices is a matter of public record. In CA its been 6.7% since 1970s for example. Ridiculous, but true.]

    It is totally deceptive to say the time value of money clouds the issue because one is always going to have to pay for energy. You also ARE going to have to pay interest, or FOREGO the interest you could have earned.

    [??? Cite mentions of time value of money. Getting free solar once panels are paid off means you then get free energy. “forgo interest you could have earned”… what??.]

    It clouds the issue only because it deceases your sales.

    I hope you are not one of the people excoriating the prime-loan brokers. You have become one of them!

    SHAME ON YOU!

    Mark

    • http://pulse.yahoo.com/_KBYM37QEABM6E2754OVYVQVV5Q Daniel

      Susan- as an economist, I have to say, Mark is absolutely right about the time value of money and the forgone interest.

  • Susan Kraemer

    @Rich – PG&E’s excellent classes in solar at the Pacific Energy Center in San Francisco,and accompanying (paper) textbooks refers to solar lasting at least 40 years in total.

    Real Goods, one of our oldest companies in the Bay Area, has installs from the 70’s in Humboldt County still producing energy.

    Solar does lose efficiency at about a half percent a year, that’s why the warranty is typically for 25 years, but it will continue to work, but at a lower efficiency (which you could recoup by adding a panel!)

    Here’s a link:

    http://scitizen.com/stories/future-energies/2009/08/How-long-do-solar-panels-last/

  • Susan Kraemer

    @Rich – PG&E’s excellent classes in solar at the Pacific Energy Center in San Francisco,and accompanying (paper) textbooks refers to solar lasting at least 40 years in total.

    Real Goods, one of our oldest companies in the Bay Area, has installs from the 70’s in Humboldt County still producing energy.

    Solar does lose efficiency at about a half percent a year, that’s why the warranty is typically for 25 years, but it will continue to work, but at a lower efficiency (which you could recoup by adding a panel!)

    Here’s a link:

    http://scitizen.com/stories/future-energies/2009/08/How-long-do-solar-panels-last/

  • rich EE

    ” solar arrays already last about 40 years! ”

    Susan ;

    Please supply links to demonstrate that .

  • rich EE

    ” solar arrays already last about 40 years! ”

    Susan ;

    Please supply links to demonstrate that .

  • rich EE

    ” solar arrays already last about 40 years! ”

    Susan ;

    Please supply links to demonstrate that .

  • rich EE

    ” solar arrays already last about 40 years! ”

    Susan ;

    Please supply links to demonstrate that .

  • Susan Kraemer

    Sidewinder; under a PPA you just transfer remaining years of PPA agreement to new owner with the sale of the house.

    The new owner would keep likely prefer paying for the cheaper solar electricity, but optionally: the first owner can also buy out the system and take it with them.

    (Luckiest new owner would be the one buying at year 24: solar arrays already last about 40 years! So they would be buying a house with no electricity bills at all!)

  • Susan Kraemer

    Sidewinder; under a PPA you just transfer remaining years of PPA agreement to new owner with the sale of the house.

    The new owner would keep likely prefer paying for the cheaper solar electricity, but optionally: the first owner can also buy out the system and take it with them.

    (Luckiest new owner would be the one buying at year 24: solar arrays already last about 40 years! So they would be buying a house with no electricity bills at all!)

  • Susan Kraemer

    Sidewinder; under a PPA you just transfer remaining years of PPA agreement to new owner with the sale of the house.

    The new owner would keep likely prefer paying for the cheaper solar electricity, but optionally: the first owner can also buy out the system and take it with them.

    (Luckiest new owner would be the one buying at year 24: solar arrays already last about 40 years! So they would be buying a house with no electricity bills at all!)

  • Susan Kraemer

    Sidewinder; under a PPA you just transfer remaining years of PPA agreement to new owner with the sale of the house.

    The new owner would keep likely prefer paying for the cheaper solar electricity, but optionally: the first owner can also buy out the system and take it with them.

    (Luckiest new owner would be the one buying at year 24: solar arrays already last about 40 years! So they would be buying a house with no electricity bills at all!)

  • Susan Kraemer

    Sidewinder; under a PPA you just transfer remaining years of PPA agreement to new owner with the sale of the house.

    The new owner would keep likely prefer paying for the cheaper solar electricity, but optionally: the first owner can also buy out the system and take it with them.

    (Luckiest new owner would be the one buying at year 24: solar arrays already last about 40 years! So they would be buying a house with no electricity bills at all!)

  • Susan Kraemer

    Bob; China just had the biggest renewable energy IPO EVER $2.2 billion – for a wind company,

    http://www.scientificamerican.com/article.cfm?id=22-billion-ipo-for-china-wind-power-2009-12

    and has overtaken the US in leading solar co. Also virtually every building has solar thermal.

    We should be more afraid of falling behind, by not lifting a finger to help them develop more renewable energy:

    http://cleantechnica.com/2009/12/09/developing-world-assistance-likely-to-bring-100-billion-boom-to-renewable-sector/

  • http://www.green-tech.cl Alfredo Rehbein

    Dear Susan;

    Does it is possible for you to send us a PPA draft?

    Regards,

    Alfredo Rehbein

  • http://www.green-tech.cl Alfredo Rehbein

    Dear Susan;

    Does it is possible for you to send us a PPA draft?

    Regards,

    Alfredo Rehbein

  • http://www.green-tech.cl Alfredo Rehbein

    Dear Susan;

    Does it is possible for you to send us a PPA draft?

    Regards,

    Alfredo Rehbein

  • http://www.green-tech.cl Alfredo Rehbein

    Dear Susan;

    Does it is possible for you to send us a PPA draft?

    Regards,

    Alfredo Rehbein

  • http://www.green-tech.cl Alfredo Rehbein

    Dear Susan;

    Does it is possible for you to send us a PPA draft?

    Regards,

    Alfredo Rehbein

  • Susan Kraemer

    Sidewinder; under a PPA you just transfer remaining years of PPA agreement to new owner with the sale of the house.

    The new owner would keep likely prefer paying for the cheaper solar electricity, but optionally: the first owner can also buy out the system and take it with them.

    (Luckiest new owner would be the one buying at year 24: solar arrays already last about 40 years! So they would be buying a house with no electricity bills at all!)

  • http://extremegreenvillage.com Bob

    Pardon me, but I can’t wrap my mind around the idea that it is actually cheaper to do Sular than regular energy. If only that were true.

    Imagine, China would stop building a coal plant every 2 weeks.

  • http://extremegreenvillage.com Bob

    Pardon me, but I can’t wrap my mind around the idea that it is actually cheaper to do Sular than regular energy. If only that were true.

    Imagine, China would stop building a coal plant every 2 weeks.

  • http://extremegreenvillage.com Bob

    Pardon me, but I can’t wrap my mind around the idea that it is actually cheaper to do Sular than regular energy. If only that were true.

    Imagine, China would stop building a coal plant every 2 weeks.

  • http://extremegreenvillage.com Bob

    Pardon me, but I can’t wrap my mind around the idea that it is actually cheaper to do Sular than regular energy. If only that were true.

    Imagine, China would stop building a coal plant every 2 weeks.

  • Susan Kraemer

    Bob; China just had the biggest renewable energy IPO EVER $2.2 billion – for a wind company,

    http://www.scientificamerican.com/article.cfm?id=22-billion-ipo-for-china-wind-power-2009-12

    and has overtaken the US in leading solar co. Also virtually every building has solar thermal.

    We should be more afraid of falling behind, by not lifting a finger to help them develop more renewable energy:

    http://cleantechnica.com/2009/12/09/developing-world-assistance-likely-to-bring-100-billion-boom-to-renewable-sector/

  • Susan Kraemer

    “You don’t have to get a CREDIT CHECK to BUY electricity from a utility. Now you don’t need one to BUY your very own solar power SUPPLY either.”

    But I agree, buying a system makes more economic sense than a PPA – for those who can get credit – and are not scared off by the upfront cost.

    For others though, the low monthly cost of continuing to just BUY the SUPPLY like they do already is better.

  • Susan Kraemer

    “You don’t have to get a CREDIT CHECK to BUY electricity from a utility. Now you don’t need one to BUY your very own solar power SUPPLY either.”

    But I agree, buying a system makes more economic sense than a PPA – for those who can get credit – and are not scared off by the upfront cost.

    For others though, the low monthly cost of continuing to just BUY the SUPPLY like they do already is better.

  • http://solarpowerrocks.com Solar Fred

    Hi, Susan. Appreciate your comments on Green Inc for solar.

    Just wanted to point out here that you have a typo. Sunergy is a company in California and does not do PPAs. The company you’re reporting here is US SOLARGY, based out of NJ. :) [SK: Thanks Fred! Fixed]

  • sidewinder

    and so – what? this family with the $100/mo electric bill pays $25/mo under the PPA? For twenty-five years?

    What happens if they move? Who’s responsible then?

    Details are important.

  • http://solarpowerrocks.com Solar Fred

    Hi, Susan. Appreciate your comments on Green Inc for solar.

    Just wanted to point out here that you have a typo. Sunergy is a company in California and does not do PPAs. The company you’re reporting here is US SOLARGY, based out of NJ. :) [SK: Thanks Fred! Fixed]

  • http://solarpowerrocks.com Solar Fred

    Hi, Susan. Appreciate your comments on Green Inc for solar.

    Just wanted to point out here that you have a typo. Sunergy is a company in California and does not do PPAs. The company you’re reporting here is US SOLARGY, based out of NJ. :) [SK: Thanks Fred! Fixed]

  • http://solarpowerrocks.com Solar Fred

    Hi, Susan. Appreciate your comments on Green Inc for solar.

    Just wanted to point out here that you have a typo. Sunergy is a company in California and does not do PPAs. The company you’re reporting here is US SOLARGY, based out of NJ. :) [SK: Thanks Fred! Fixed]

  • sidewinder

    and so – what? this family with the $100/mo electric bill pays $25/mo under the PPA? For twenty-five years?

    What happens if they move? Who’s responsible then?

    Details are important.

  • Ron Winton

    This article starts off with the following statement “Now you don’t need one to buy your very own solar power supply” which is a false statement because you’re not buying anything with a PPA. The PPA company own the system and they will get all of the financial incentives including any cash rebate, the 30% Federal tax credit and any REC credits. A PPA is like a lease which rarely ever makes financial sense especially for a residential application. The PPA company locks in your valuable roof space and gets all of the financial incentives. Owning your own system make far more economic sense.

  • Ron Winton

    This article starts off with the following statement “Now you don’t need one to buy your very own solar power supply” which is a false statement because you’re not buying anything with a PPA. The PPA company own the system and they will get all of the financial incentives including any cash rebate, the 30% Federal tax credit and any REC credits. A PPA is like a lease which rarely ever makes financial sense especially for a residential application. The PPA company locks in your valuable roof space and gets all of the financial incentives. Owning your own system make far more economic sense.

    • Arthur Braden

      If the customer can not afford the cost of a new system, would they then want to have the system installed and pay 25% of their average bill, not even incurring maintenance costs for the system? Does the customer not only save money with their bill, but also avoid the costs/prospects of an “approved installer”, only installer-approved solar components, inspection costs, and utility company approval? If the company is liable for damages to their home, I only see benefit in this option. DIY does not yet seem to be the best option for “most” homeowners to pursue.

  • Susan Kraemer

    “You don’t have to get a CREDIT CHECK to BUY electricity from a utility. Now you don’t need one to BUY your very own solar power SUPPLY either.”

    But I agree, buying a system makes more economic sense than a PPA – for those who can get credit – and are not scared off by the upfront cost.

    For others though, the low monthly cost of continuing to just BUY the SUPPLY like they do already is better.

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