CleanTechnica is the #1 cleantech-focused
website
 in the world. Subscribe today!


Policy & Politics New Downtown Fixtures - Courtesy Jason Tallious, CC by SA, 2.0

Published on August 26th, 2014 | by Roy L Hales

9

Will Washington State Buck The Trend?

Share on Google+Share on RedditShare on StumbleUponTweet about this on TwitterShare on LinkedInShare on FacebookPin on PinterestDigg thisShare on TumblrBuffer this pageEmail this to someone

August 26th, 2014 by  

Originally Published by the ECOreport 

 Olympia, WA – Courtesy Jason Taellious, CC by SA 2.0

Olympia, WA – Courtesy Jason Taellious, CC by SA 2.0

Between 70% and 80% of California’s solar installations are leased from third party companies. This model has been reproduced throughout much of the US, but some Washington installers want to do something different. They believe that money raised from local taxpayers should be used to promote the growth of local solar initiatives. This puts them in opposition to large out-of-state solar leasing companies who need that funding. Will Washington state buck the trend?

The key questions are:

  • Is the priority for Washington state to get as much solar as fast as it can?
  • Should Washington legislators encourage the development of local solar industry?
  • Should Legislators harmonize these goals?

A solar company rep who wished to remain anonymous described Washington’s cap on funding as the central issue. This is expected to be reached by 2016 or 2017. There will be less money for local companies, if giants like Sunrun and SolarCity extent their operations into the state.

SunRun is not yet available in Washington.

SolarCity lists Washington among the 15 states listed on its website, but their closest Regional office is Portland OR.

Screenshot 2014-08-22 10.58.11

Why not capture Solar Energy or Rain? – Sam Beebe, ECotrust, CC by SA, 2.0

“Everyone has a different priority in this conversation, of course” said Dever Kuni of South Sound Solar, the volunteer legislative and public policy committee chairwoman for the Solar Installers of Washington trade association. “The way I see it, the cap is a side issue. We still haven’t even addressed the issue as a state and an industry and as citizens, of whether or not we even want these business models to receive the benefit of our state funded, tax dollar funded incentive program. The idea with those funds is that they would be prioritizing Washington solar that benefited the Washington economy.”

“Local Washington state solar companies are trying to prevent competition,” said Bryan Miller, President of the Alliance for Solar Choice (TASC) and SunRun’s Vice President of Public Policy. “They are pushing discriminatory policies. These companies are being very short sighted. More competition is good for customers and also for all solar. ”

“When you look across the country, this issue has come up before. Small companies who install a few systems a month are worried about the impact of competition. What they’ve actually seen is when competition comes, their market greatly expands – because people are more aware of solar.”

The competition is for a pool of funds originally raised to promote local industry.

“Currently, leasing companies are not allowed to access the incentives at all,” said Kim Sanders of TASC. “There is some talk of allowing leasing companies to do so, but receiving less of an incentive than a cash purchase.”

Sanders claims this amounts to discriminating against people who do not have the funds to pay for their system upfront.

New Downtown Fixtures - Courtesy Jason Tallious, CC by SA, 2.0

New Downtown Fixtures – Courtesy Jason Tallious, CC by SA, 2.0

A 30% Federal tax break goes to whoever owns the installation, whether it be the leasing company or homeowner.

Taking that into consideration, Kuni says there are at least half a dozen Washington loaning institutions that offer rates comparable to leases.

She added that market conditions are very different in California and Washington. They have a lot more sun and higher utility rates. Both are lower in Washington.

“Leasing solar systems is currently allowed in Washington,” said Kuni. “The issue is that the leasing system is not sustainable with just our net metering rates.”

Sanders argued that homeowners should be given the choice of whether they want to own or lease a system. She agreed there are situations where buying is preferable, but there are also situations in which homeowners prefer to let the solar company maintain the system.

Kuni finds that maintenance often amounts to washing the panels once a year. Homeowners could do that themselves. Her company charges $5 a panel. She believes Washington’s solar incentives should be used for local development.

“That’s why they set up the incentives the way they did,” Kuni she said. “Everyone is encouraged to go solar at 15 cents a kilowatt hour regardless of where the system was manufactured, but if you are supporting Washington manufacturing jobs on top of it, we’ll give you an additional incentive on the ‘value of those jobs.’”

“We are seeing the same kind of microgroove mentality that we see with beer locally, which is we want to support the local jobs from the local companies and prioritize those over the large out of state companies. We have to figure out where the balance is within all of that before we can move forward with an effective policy.”

South Sound Solar is based in Olympia WA and does not even travel to Seattle. That is an hour to the north and there are reliable companies in Seattle. Most of their customers offset between 30% and 60% of their energy needs with solar. Kuni added that they also have customers with modest sized homes that obtain 100% of their needs.

She claims ownership would appear to be the best return per tax dollar invested. A lease is only good for the 20-years specified in that contract and then has to be renegotiated or the panels removed. However modules can be expected to live 30 to 50 years. The original solar panel, invented by Bell Laboratories sixty years ago, is still in operation.

“This is a really big conversation,” Kuni added. “I don’t think we are going to be able to solve it easily and mostly because Washington state is leading the nation right now in having this open dialogue between utilities, leasing companies, solar manufacturers and solar installers.”

(Image at top of page: Olympia – Courtesy Jason Taellious, CC by SA 2.0)

Keep up to date with all the hottest cleantech news by subscribing to our (free) cleantech newsletter, or keep an eye on sector-specific news by getting our (also free) solar energy newsletter, electric vehicle newsletter, or wind energy newsletter.



Share on Google+Share on RedditShare on StumbleUponTweet about this on TwitterShare on LinkedInShare on FacebookPin on PinterestDigg thisShare on TumblrBuffer this pageEmail this to someone

Tags: , , , , , , , , , ,


About the Author

is the editor of the ECOreport (www.theecoreport.com), a website dedicated to exploring how our lifestyle choices and technologies affect the West Coast of North America and writes for both Clean Techncia and PlanetSave. He is a research junkie who has written hundreds of articles since he was first published in 1982. Roy lives on Cortes Island, BC, Canada.



  • inductancereluctance

    Solar leases and PPAs are far, far more expensive than purchasing a system outright.

    1. Add up your lease payments and when compared to an outright purchase you’ll find that you’re easily paying up to 3 times more on a $0 down solar lease versus a purchase.

    2. You’ll probably pay so much more for a lease than a purchase that’s it’s actually you who will be over-paying for your own maintenance, monitoring and insurance not the leasing company.

    3. You’ll probably have trouble selling your home because what home buyer in his right mind will want to assume your lease payments on a used, outdated system when they can buy a brand new system with the latest technology and keep the 30% federal tax credit for thousands less.

    Remember, the solar leasing companies will not be installing the latest, 1/4 inch thin, frameless, higher efficiency, bifacial solar technology on your roof. They’ll be installing first generation, boxey looking, aluminum framed solar panels that offer far lower efficiency at a much higher price. Those boxey looking panels may look good on your roof today, but what will they look like at year 10 of your locked in 20 year solar lease contract? And what will that outdated lokk do to your home’s resale value ?

    4. After making 20 years worth of leasing payments, you won’t even own the system. It will still belong to the leasing company.

    5. Check that quote from the solar leasing company and you’ll find that most of the time they won’t even tell you what brand of equipment they’re installing on your home. I wonder why?

    6. Most if not all $0 down solar leases include an annual payment escalator that will increase your monthly payment by up to 2.9% per year for 20 years.

    7. You’ll be stuck with the same aging solar system without the ability to upgrade for the full 20 year term of the contract. If you bought your system instead, you can sell it at any time and take the proceeds from the sale and upgrade to the latest and greatest equipment. You can’t do that with a lease because it’s not your system to sell.

    8. You’ll have to forfeit the 30% federal tax credit and any applicable cash rebate to the leasing company and you won’t get tax deductible interest on your lease payments. Only a $0 down solar loan or $0 down PACE financing will give you tax deductible interest and let you keep all of your incentives for a much better return on your investment.

    • Dano2

      For those who can’t make the up-front costs, its an option.

      States that allow leases have far, far, far more installations than purchases. I’m sure the only reason for that is they didn’t talk to you, amirite?

      Best,

      D

      • inductancereluctance

        Noyou’rewrong. Why do you need any up-front costs with a $0 down FHA solar loan with tax deductible interest ? Solar leases and PPAs don’t offer tax deductible interest and they’ll take all of the incentives that could have gone to you and apply them to they’re overpriced systems. Yea, you’re right about one thing. Solar leases and PPAs are an option. A very expensive option.

        And the states that allow them have far more leaes because the people that sign those leases are never informed of the lower cost options before signing.

        • Dano2

          In the past ~year, within a 1000′ radius of my house, maybe 25 roofs have received solar PV. More than half are leased. Tell those people they don’t know that they should have talked to you first, not me.

          Best,

          D

  • inductancereluctance

    If Washington state is smart they’ll tell the solar leasing companies to take a hike.

    • http://batman-news.com waynemasters

      Reactance, capacitance, potential difference; I wonder what all factors are afoot here?
      We in BC, Canada ready to grid* parity.
      *(verb transitive)
      If only solar leasing firms were as concerned about refrigerator efficiency.
      The average refrigerator energy loss and food spoilage cost equals an average residential solar installation within: ……wait for it….my guess….same 10 year time span.

  • Matt

    We have tax laws that benefit only those whom by their homes. So they could pick to favor owning your panels. You can get loans now. And every one of the large players that made a lot on a lease could do zero down loans also. Now if they are saying that 50% of the company’s gross revenue must come from installs in Washington state, then …

  • TedKidd

    ““Local Washington state solar companies are trying to prevent competition,” said Bryan Miller, President of the Alliance for Solar Choice (TASC) and SunRun’s Vice President of Public Policy. “They are pushing discriminatory policies. These companies are being very short sighted. More competition is good for customers and also for all solar. ”

    &

    “Sanders claims this amounts to discriminating against people who do not have the funds to pay for their system upfront.”

    Seems right on, people protecting their unfair advantage. Anything new?…

  • spec9

    California will ‘buck the trend’ eventually, IMHO. Solar leases are a bad deal for consumers and they are starting to figure it out. And there are many other financing opportunities now . . . home equity loans, PACE, Mosiac, etc.

Back to Top ↑