When the auto industry started selling ex- pensive SUVs, all it did was extend the loan to provide consumers with a smaller monthly payment. That’s all people care about. We’re seeing four very different financial
approaches:
1.] One approach is power purchase agree- ments, primarily for commercial, utility and institutional projects, like colleges. A solar company will build a system on a building or property and sell the power if the building owner agrees to buy it for 20 years at 1 cent less than the utility sells it. Of course, electric rates won’t escalate like on a utility bill, so the building owner is paying less now and in the future, and he or she doesn’t have to pay for a system out-of-pocket. PPAs have made large-scale solar affordable.
2.] For medium- and small-scale solar, fuel cells, wind and storage batteries, leasing is available. Companies own systems and actually lease a building owner the equip- ment. By the way, more than 50 percent of furniture and phone systems in com-
mercial and institutional buildings are leased, so this is just one more thing you can lease. A company puts a system on the building’s roof, and the owner agrees to buy the power or pay the lease. After 10 or 15 years, the owner owns the system or the company will take it off the roof if the owner doesn’t want to own it. There are about five companies nationwide that are leasing equipment.
3.] There are a series of banks willing to offer second or third mortgages for systems or include them in a home-renovation mort- gage. That’s what I did with my home. I was putting a second story on and financed my solar water heating and photovoltaic sys- tems through a second mortgage. I paid it off, and now I’m getting free energy.
4.] Lastly, there are finance instruments tied to the ratepayer, not the building, such as PACE [Property Assessed Clean Energy] and on-bill financing. PACE uses lower property taxes to make such investments cash positive. On-bill financing allows the utility to make some money to finance
high-value energy efficiency and onsite renewables in or on buildings. The financ- ing stays on the building’s utility bill until it’s paid off, which is a positive cash flow for consumers. [Editor’s Note: To learn more about PACE, see retrofit’s January- February issue, page 16.]
renewable energy? r:
election will have any effect on the clean-energy industry?
r:
SKLAR: It has had a psychological effect on the market. I actually did work as a con- sultant for Romney when he was governor for his energy agency, and he was very pro
SKLAR: We’ve had 100 years of oil, natural gas and coal incentives, and they’re not going away. Renewable-energy incentives aren’t go- ing away either.
Do you anticipate the out- come of the recent national
How long will financial or tax incentives remain to subsidize