By Clint Williams
Green Right Now
It didn’t make sense, really, to spend 44 cents each month to mail Southern California Edison a check for 92 cents. So the Wyman’s of Orange, Calif., decided to pre-pay their 2010 electric bill, sending the utility company a check for $12.
Consider Ray Wyman, 54, a true believer in having solar panels installed on the roof.
“There is the instant reward of reducing the cost of energy and fixing your energy costs,” says Wyman, a marketing communications consultant.
And, Wyman notes, with no out-of-pocket expenses, the savings begin from day one.
The Wyman household is one of about 6,000 in five states – Arizona, California, Colorado, Oregon and, most recently, Texas – that lease photovoltaic solar panel systems through SolarCity, based in Foster City, Calif., in the Bay Area.
SolarCity provides one-stop shopping for solar power system design, financing, installation, monitoring and maintenance.
“There are other companies that design and install systems and other companies that finance systems, but we’re the only one that does it all,” says company spokesman Jonathan Bass.
SolarCity, known for having installed a 650 kilowatt commercial solar system at eBay’s offices in San Jose, also sells solar power systems and offers side-by-side cost-benefit analysis for those considering a residential setup, Bass says.
Despite an array of federal and state tax credits and utility rebates, an installed solar power rooftop system still costs as much as a compact car. A 5 kW system costs about $35,000, according to a breakdown by the Salt River Project, a major Arizona electric utility. The SRP rebate is $13,500, the Arizona tax credit is $1,000 and the federal tax credit is $6,450.
That brings the net cost of a system to just over $14,000, which means homeowners still have to write a big check to get started on solar power and wait for the tax credit and rebate money to come back to them.
“Solar is a great investment as a purchase,” Bass says, adding that after the payback period of four to 10 years the homeowner is looking at years of basically free electricity.
But that first check is a big hurdle for many people.
“Buying panels was never financially feasible,” says Len Gutman of Phoenix, who leases a system from SolarCity. “If we were buying this same system, we would have had to finance $50,000.”
Gutman’s lease payments are $140 a month. The panels provide all the power the family needs in the winter for their 2,220 square foot home, but the Gutmans buy additional electricity during the summer.
“We like it cool and it’s hot here,” Gutman says, chuckling.
Still, the combined cost of the lease and power bill is less than the old power bill.
“We’ve actually made money every month,” Gutman says. “It’s not a lot of money, but it’s $10, $20, $40 a month going back into our pockets.”
Wyman’s $150 monthly electric bill for his 2,000 square foot, three-bedroom home has been replaced by a $95 lease payment and the 92-cent monthly charge to run the power line to the house. More importantly, Wyman says, his electricity costs are fixed for the next 15 years.
“I believe there is going to be energy inflation in very short order,” he says. “I call this the green hedge – your hedge against inflation.”
Both men note that the savings are immediate because there is no money down with the lease. The tax credits and utility company rebates are funneled to SolarCity. And, if something goes haywire – as it did after just a couple of month with Wyman’s system – SolarCity comes out and fixes it.
- Local utilities are beginning to help with residential solar solutions. In Texas, for instance, TXU Energy announced in February that it would be facilitating the installation of residential solar arrays through a partnership with SolarCity. So far, the TXU program is the only way to access SolarCity’s program in Texas.
- San Francisco’s PG&E also announced an agreement this year in which it will help finance 1,000 SolarCity installations.
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