Published on August 26th, 2014 | by Roy L Hales9
Will Washington State Buck The Trend?
August 26th, 2014 by Roy L Hales
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.
“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.
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.”