I had one of those bright ideas that will not go away until I discuss it. I read that the average homeowner in the USA moves about every five to seven years. Various calculations I have read show an average payback for solar of about ten years. Based on this, it is economically silly for me to install solar in my home. I does not help that I am nearly 70 and thinking of a condo. In my opinion, this 'time to payback" hurtle will not be solved based on economics alone. For instance I see that California is requiring or planning to require that new homes be "solar-ready."
Given: A solar system is solar voltaic panels, converter and smart meter for the grid (no batteries). Also, the local power company is able to report on power consumption/production for each home and the community has a policy of purchasing excess energy produced at individual homes (smart meters).
A reasonable solution to getting solar to each home would be for the local power company to contract with each customer to lease their roof. The power company would install solar which would be consumed by the homeowner on a shared basis and any excess would be metered back onto the grid. A ballpark estimate of how cost sharing would occur might look something like:
Power company assumes all install and maintenance costs
Power company manages power metering and reporting to the homeowner
Some small percentage of power production, say 20%, would be considered homeowner generated to reduce the family's bill as monthly payment for the lease
The remaining percentage (80% in this example) would be considered power company generated and the value would be applied toward the payoff of the system and power company profitability
After the initial investment and maintenance costs are recouped (assuming around 12 years), using an equitable formula, the power company would split the monthly value of power generation with the homeowner
The power company would maintain the system
This relationship between the power company and the homeowner would remain with the home after home sale and continue for the life of the home. If solar is economically feasible, then this should be a good deal for the power company. As an alternative, the power company could be the record keeper for independent companies in the business of leasing roofs for solar.
A benefit for the homeowner would be more reliability of power during major outages. And of course, there is the cheaper power. Once the initial investment is paid off, the home should have more value when the roof is leased to the power company.
First welcome aboard! Its great to have experience members such as yourself and always nice to see creative ideas open for discussion and of course debate like this one. :)
That said, I'm no solar power expert but I really like this idea! I think getting the power companies involved to the point where they can make money is one of the keys on solar power growing in popularity. In states like Nevada and Arizona I can see great great benefits to this. To customers, the power company and most of all our environment.
Our electric bill went up 60% in June!! All because of the 100+ temps in Las Veges. If the panels used are those that have "better" and not worst efficiency in hotter temperatures, then summers could work out better for everyone!
My time is about 200% consumed by a nonprofit my wife and I lead, so I am always a little hesitant to be very much of an activist outside of my field. Even so, this post was mu first effort to figure out if the idea has legs and where to present it.
If time permitted, I would develop a proposal and campaign that to power companies, the government and local businesses involved in electrical contracting. Something with an introduction, problem statement, design model, hypothetical cost analysis and such would be better received than what I wrote here. I spent a few years as an Air Force Logistics Command engineer, so I know that a well developed proposal presented to the right agency would be well received.
I was shocked to see that California uses a cost-payback model based on 25 years life expectancy of the system including replacement of the converter in 15 years. When you fold that into the model, it becomes a more daunting task to justify.
Even though the cost-payback curves still intersect at around 12 years, anyone leasing roofs for solar would need to be pretty well funded.
It sounds like a great plan, and one that would make economic sense for all concerned. As you say, the initial cost of installation, tied in with the possibility of relocation before installation costs had been recouped would put many people off. A lifetime lease on the roof would seemingly solve the problem.
The only difficulty I can see is that the power companies may get too greedy, and the home owners could lose out. There would need to be local, national and international legislation to protect the interests of all concerned, and this could take years to set in place. Still, it's worth investigating further.
You are right about the protections, but as I have seen, the protections come after the need has become evident. The government makes rules in reaction to crooks rather than in anticipation.
I am sure there would be opportunities to take advantage of the customer. For instance, maintenance costs could be calculated on a one house per trip basis when in actuality, the maintenance would be conducted as a scheduled process per neighborhood which would decrease the cost considerably.
I think the most compelling reason for both vendor and homeowner to play it right is the threat of probably power interruptions, carbon taxes and the social stigma of not having an array on the roof. As long as the contract is a break-even arrangement--home owner gets at least some percentage of reduced power cost and vendor gets a reasonable payback on investment, I think people would participate.
Again look at California and their solar-ready house rule. See drudge dot com/news/157945/california-requires-solar-ready-roofs
I am going to guess that amounts to at least a $100 energy tax on new home buyers. Things are already moving in the direction from "a neat thing to do" to "thou shalt do."
PS:
This is interesting to me but I will be on the road for a few days and lack of Internet may cause me to delay responding.
Hello Tom
My name is Jeff Moore and I am the Director of Technology Integration for Environmental Power & Water Generation and associate director of E3 Wise.
First I would like to welcome you to Alt. Energy Shift and thank you for your participation in the online forum.
Secondly I would also like to thank you for your thoughtful question regarding renting of rooftop space for solar energy. I would like to make clear that I like your idea and that the information I am providing is to provide background and should not be taken as reasons to dissuade you, but is simply given for consideration. I have always been a person who believes that great ideas can be accomplished even if hard answers need to be found.
Leasing of roof space for solar energy has been occurring on the commercial scale for a few years and has been growing slowly over time. The reason it has worked for commercial applications are purely economic in nature.
Firstly commercial applications allow the ability to install large solar arrays that yield ½ Mw or larger. This is important for economy of scale and payoff over time. Simply if one roof can yield 1 MW the ability to negotiate larger kilowatt rates provide the ability to pay off the system faster. This is true because it takes fewer inverters, smart meters and so on for one location; where as to do the same type of application with residential homes would mean that 15- 20 homes would have to be provided to accomplish the same energy production. Meaning where as you would need 2- 3 large inverters for commercial you would need 15-20 for residential adding significant costs.
Second is the coding of commercial properties which are usually much stringent than residential properties. This means that few if any additional structural additions need to be made for commercial property, where as many residential properties would need to have roofs strengthened to be able to support the weight and wind loads for solar applications. This is a minor reason but one that investors use as a reason for commercial leasing over residential.
Third is the pitching of commercial roofs as opposed to residential. Many commercial roofs are flat with a 5- 10 degree slope that allows rain to run off, but yields a large flat space to orient the solar to the correct orientation for best take advantage of the solar elliptic thru the day.
Fourth the ability legally to lease space for commercial property is much more established for commercial property. Most states have commercial leasing laws well spelled out and view rooftop space in the same regard as floor space, meaning that long term leasing is much easier legally and provides investors with legal recourse should the owners default on the terms of the contract.
Currently several groups are leasing space on school rooftops. The ability to place them on schools provides large areas with minimal obstructions, and schools have some of the most stringent building codes. Because schools are a specific use building investors can be assured the building will remain a school for many years in the future. Likewise it allows for fixing electrical rates for long periods of time in either a percentage of sales to the utility, or a long term contract for reduced rates to the school with the investors taking advantage of the federal and state incentives to help pay off costs more quickly.
Now with all that said just because no one has come up with a economic model for grouping of residential properties together into an independent power provider group does not mean it is not possible.
I personally like the idea you have presented but these are some of the issues that will need to be confronted to develop a marketing model that is attractive to large investors.
Be advised that states that have incentives and Renewable Portfolio Credits or Standards will be your best bet. Currently the best incentive have been for larger properties such as commercial building because buildings require almost 70% of the energy needed today nationwide, where as residential is just under 30%, so federal and state governments have focused on these first and residential properties second.
Our dream has always been to provide generative power locally to residential as well as commercial buildings, as designers of alternative energy and water applications I can honestly say that a full 95% has been commercial because those are the people who have the money and property equity to qualify for incentives and financing.
I guess what I am trying to say is that your idea is a good one and we support the premise, work will have to be done to work around the issues that I have written about. That said the biggest factor in your favor has been the drastic decrease in the cost of solar cells and as they continue to fall your idea will have more and more credence. Personally I feel that being able to reduce costs to average consumers, generate equity and long term revenue for home owners is a very worthwhile goal and deserves much more attention.
Oh I forgot to mention two areas that have been doing IPP's for residential solar. 1. is Habitat for humanity which has been adding solar to new home construction models in several states. The biggest reason is that it is much easier to finance solar as part of a smaller new home at contruction than to add it later.The second has been for military housing, the military is trying to reduce energy costs as part of their long term goals and several projects in California and Hawaii, just to name a couple have been adding solar to large areas of residential property so research in to how they are able to model the costs might be a good place to start.
You should check to see the particular incentives in your state, payback may be less than a decade. Solar increases a home's value so doing it now even if you only stay 5 years is still worth while. Think about it, would it be worth it to a new home owner to pay another $10K if he knew his electricity would be free for life?
Any chance you have some friendly neighbors? Industrious children? If you do the install yourself you save a bundle. We're talking half to a quarter of what a contractor would quote. I think you could get down to $1.25/watt complete at today's prices, (after fed rebate).
If the power company owns it, they get the benefits and you pay. You may pay less than others if you lease your roof but you will pay more overall. If you own it, all the benefits go to you.
Thanks for the information Jeff. I knew that there was a possibility large-scale installations were being done as some form of joint venture. It is good to hear that they are becoming more common place. I suppose I made the assumption that, if such arrangements were being made for family dwellings, someone would have knocked on my door by now.
Roof loading is an interesting consideration. There is even a load issue for too many layers of shingles for single-family dwellings. Living in the northern part of Nevada, we see ordnances for snow loading as well. I am pretty sure these are concerned with beam loading across the entire roof, which is a mass per square foot calculation. I am not a structural engineer, but I believe engineering a load capacity for setting things on the roof can be a matter of properly transferring the load to the lead-bearing walls by bridging over the rafters.
The economy of scale is probably the most difficult to address. I can see that dealing with individual homeowners, transfer of ownership, homeowner associations and barking dogs would make looking at the warehouse district a lot more attractive. I would look at it from the perspective of an industry rather than a local contractor or even a local power company. This sounds like something you are familiar with.
One possible way to approach this is to develop a cook-book approach with practices that tell the installer that a home of such and such configuration should be equipped with such and such package. Standardized hardware and installation procedures could be designed to install supports directly on wall crowns to suspend the system above the shingles. Tilt could be accounted for in this design and one might even imagine an automatic "screw lift" to increase efficiency. If it is a government project, bulk purchases of hardware could be bundled into kits.
Standardization like this could reduce cost considerably--both for material and technician training.
An alternative to the roof might be a deck cover or solar gazebo. I have a 12' X 12' deck, shade cover that I would love to have turned into a rain cover. I would pay for such an added benefit and that might be a way of avoiding the roof all together in some cases. A covered deck might provide a direct increase in value to daily living and resale of home that the homeowner might buy into.
The bottom line is that we need to move the home toward a more energy efficient node in the network, including water, air and heat. The government may need to organize it but it will take a lot of agreement from homeowners. How homes look today is pretty much as they have evolved in what people expect--a patio, a fireplace, a pool. Why not teach people to expect a solar system, gray water system and energy efficiency. That expectation can be modified by making what needs to happen be more useful and "proper to have."
Phil, you may be right about shorter payback times for some locations; however, it would be good if this was more of a one size fits all solution. I suspect that installing the system is not really a good idea for the average person because there are issues with permits, inspections, people climbing about on the roof while carrying large panels and working with voltages that could kill and/or burn the house down. While not a structural engineer, I am an electrical and electronics engineer and I would be the first to hire a licensed contractor.
Tom you are really on the right track, Generative power on the residential scale is the model that Europe is working toward. Germany, France, Spain and several other countries are working on Residential based IPP (Individual Power Providers) that lump homes in specific neighborhood together and using standardized models install, retrofit if needed and by bunching together provide energy generation levels high enough for utilities and investors to be able to recoup investments more quickly than the standard 8- 10 year model. One of the primary advisors is named Jeremy Rifkin. I had the privilege to film him at the National Hydrogen Association meeting in Washington DC in early 2011.
Here is the link and although it is a little long- 9 ½ minutes I think it will provide you a good opportunity to see the model that is getting the most traction worldwide, he has also advised San Antonio Texas, LA, Boulder CO. and a few other US cities.
His book which details the plan and is the model for what you are trying to do is called the Third Industrial Revolution; there are five key areas which he calls pillars.
This next part is for information so you can understand what the current situation in the US is. It is in no way meant to discourage you, please don’t let anyone do that because your idea is sound and is the way the US needs to be moving, even if it is not quite there yet.
The last two administrations have on centralized power production. Meaning using current electrical grids that are being slowly shifted over to alternative sources. This means that the people who have the big money are able to take advantage of incentives, tax breaks and reverse metering laws that benefit big money, because that is who funds campaigns for politicians. Not really right but current reality.
Europe’s model is generative decentralized power to provide energy at local levels and thereby not be so dependent on the grid. Home owners and small businesses are the focus. What is needed is a grassroots level shifting by voters to call for a more decentralized system that allows the grid to go digital and harden our energy system in case of overloads, coronal ejections, cascade failures and so on.
I looked over your website and was impressed. As you know being able to visualize and share a specific goal will be essintial to making a change toward these policies on a local, state and federal level. I think you may be uniquely qualified to do this and so I would encourage you strongly to keep working on your ideas. I would only add that the incorporation of micro wind with you solar plan would allow you to take advantage of a more balance production program that takes advantage of when solar is not available.
That said I want you to keep at it and let us as a forum help if we can with information, ideas and practical solutions. Lastly Phil is right that DIY people could reduce cost by doing this themselves, I know he saved a lot and that is one of the key reason that his cost to payoff ratio is so high. That said you point regarding permitting is right on, to take advantage of reverse metering programs.
My suggestion would be the incorporation of a model, of groups, of trained volunteers along the line of Habitat for humanity. With minimal training volunteers could be put together in groups to do the work of instillation with certified electrician to oversee wiring and integration to the existing homes electrical system and grid, thereby driving down costs significantly and increasing the time to payoff.
When I got my solar certification I quickly came to the understanding that a lot of costs are just from labor, the grunt work, with very little from actual electrician’s labor.
Keep up the great idea and let us know how we can help.
Health, Happiness and Success
Jeff & Lois Moore – E3 Wise
Environmental Power & Water Generation
The DIY movement is huge, there are numerous internet sites selling all the necessary equipment. They can even help you with design. It really is straight forward, there are just a couple of solar specific rules you need to adhere to over and above standard wiring rules. Wading through the state and PUD incentive paperwork was harder than the entire install!
Since every roof is different, each design must be taylored to that, one size can't fit all. The big things are panels and the inverter. If you don't feel comfortable on your roof or know someone who is, by all means call the contractor. If you aren't comfortable with wiring then by all means hire a contractor.
As always though, get the proper permits, that goes without saying. You likely can't get a reverse meter from the PUD without a signed off permit.
Funny I am a retired electrical engineer and the LAST thing I'd do is hire a licensed contractor! Too many horror stories to recount here. Even if you do, make sure THEY get the proper permits! I would vote for a "Habitat for Humanity" style national solar conversion movement.
Here is a free fun tool to play with. http://www.sma-ameri.../downloads.html Click on "software" then "sunny design". It walks you through the entire design process, (with only their inverters of course!). I designed my system using this tool. You click on the nearest city for weather data, and set all the other options, then the panels you want to use. If your panels aren't in their database you can add your own.
As Jeff and Lois said there are big incentives for commercial solar but the 30% individual incentive isn't exactly chump change either. I would say 95% - 98% of our installs in my county are individual homes, not business.
Phil as always we can count on you to provide great information that makes going green easy and affordable while helping the planet. Great download, I have actually used it in the past and find it very helpful so take a look at it Tom.
Nothing like having real life experience to draw on! I don't know if I mentioned this but their inverters are amazing! If my 8KW inverter can generate 2 watts it will start up, and it will keep working down to 2 watts! It only runs on DC so there is no vampire power at night.
..Welcome to the ranch. It is a grear idea. There have been solar compainies which have teaned up with home owners to provide solar systems in their home, with a shared benefit to each, Not on a grand scale, but certainly a feasible one. Present it and hopefully this will grow far and wide. Good luck
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