SolarCity has certainly made a splash in the industry this year. It has made strides to vertically integrate is solar leasing business, starting with its acquisition of mounting company Zep Solar last year for $158 million. Zep has a rackless mounting design, which has reportedly saved SolarCity on both cash and system installation time. It also recently announced plans to move into the commercial space with a new specialized Zep mounting system. In June, the leasing company announced further vertical integration plan with the acquisition of solar cell manufacturer Silevo. It plans to open a 1-GW manufacturing facility in New York within the next two years.

Now, the company is focusing on its financing mechanisms. Earlier this month, it unveiled a new loan program to be offered alongside its leasing options. According to Jonathan Bass, vice president of communications at SolarCity, many homeowners today value just that — ownership. So SolarCity combined the value of a solar lease’s low upfront cost and rates with the benefit of ownership to reach a larger audience.

“We knew that if we offered the customer a chance to own that system we would bring more value. All of our customers are homeowners and they value that ownership. Many of them want to own solar over leasing,” said Bass. “So we knew if we offered a very low upfront cost and a very low effective kilowatt-hour rate electricity with the benefits of ownership, it would be a very powerful product.”

According to Bass, the 30-year loan is offered at a rate of 4.99 percent, and customers are able to pay down their principle payments to shorten that time period, similar to a mortgage. What’s unique about this loans compared to others on the market, like Admirals Bank, is that SolarCity has chosen to take on full service acting as the lender and subsidiary, which saves on costs.

“With most other loans in the space, you would have a financing company, like a commercial bank, offer the loan for the system, and then you would have another loan to install the system. The OM and warranty would likely go through the financing company, but the installer does the work, so it’s multiple party transaction,” said Bass. “The terms are typically shorter and the interest rate is higher, so then the kWh rate is generally higher.”

The loan is offered to homeowners with a credit score of 680 or above, which is also more generous than most other loan offerings, according to Bass.

Does this all mean that solar leases are on the downturn? Not necessarily. According to Bass, the leasing market has driven the industry for the past six years, so there will still be a large appetite, at least in the short-term. Residential loans are also highly dependent on tax appetite — the 30 percent federal investment tax credit (ITC), which is set to expire for residential systems at the end of 2016 (find out more about SEIA’s new campaign to save the ITC here), is a huge market driver.

“If you can capture the full ITC and apply that as a rate payment on our loan, it can get customers 40 percent below the utility rate, especially in California,” said Bass. “If you don’t have that tax appetite and you can’t capture the tax credit, leases are still going to be great options — customers still pay 20 percent less for solar electric through a lease, and it’s a shorter 20-year term, which some prefer.”

In addition to a loan offering, SolarCity announced last week that it would offer $200 million in bonds to the public. Bass said that this money will only help raise funds for SolarCity and continue to prove that solar is a stable asset, but also allow more people to participate in the solar market.  

They are corporate bonds that are paid through thousands of distributed solar systems. One-year bond rates start at 2 percent, while seven-year bonds go up to 4 percent. “It is very comparable to what banks are doing in the debt market, but the major difference is that instead of a $100 million buy-in, the solar bond buyer can invest as little as $1,000,” said Bass.

With these types of offerings, more and more people will be able to with go solar or at least participate in the market, creating numerous benefits, said Bass.

“As we lower the solar kWh rate and retail electricity rates rise, we will see more and more markets go solar. SolarCity offers service in 15 states today, but I think within the next 12-36 months, you’ll star to see the cost of solar electricity go below the cost of retail power and we’ll be able to enter more markets, so its really exciting,” said Bass. “But the fact is that we’re at less than 1 percent adoption even in states that are big solar adopters today, so there’s a tremendous amount of growth potential in the residential market.”

Eduardo Porter, a former editorial board member of the Times and current author of its Economic Scene column argued that “This time…advocates [for limiting climate pollution] come armed with a trump card: All things considered, the cost of curbing carbon emissions may be considerably cheaper than earlier estimates had suggested. For all the fears that climate change mitigation would put the brakes on growth, it might actually enhance it.”

This just a few days after Paul Krugman, reviewing the same overview reports but also citing some different supporting evidence than Porter, wrote that “strong measures to limit carbon emissions would have hardly any negative effect on economic growth, and might actually lead to faster growth.”

It is good news that two such distinguished economists are validating new reports that show climate protection is good from a narrow economic perspective — a perspective that doesn’t even count the financial benefits of avoiding climate-change-caused natural disasters. However, it’s distressing that it has taken this long to overcome the flawed conventional wisdom that held that taking steps to cut the emissions harming our health and the environment will lead to lost jobs and high bills. (The reasons it is deeply flawed are addressed in Chapters 4 and 6 of Saving Energy Growing Jobs.)

To see how pernicious this conventional wisdom has been, note the timid tone that shows up at times in both articles: Mr. Porter feels compelled to refer to “the fears that climate change mitigation would put the brakes on growth” while Dr. Krugman says measures to control climate pollution “might actually enhance [growth].” as if this is so surprising.

But the interesting story is: This is not news.

The idea that controlling climate pollution helps the economy is not new. Back in 1981, the Solar Energy Research Institute, a national laboratory now known as the National Renewable Energy Laboratory, published a study that said the same thing. It showed that over the next 20 years, “through efficiency, the U.S. can achieve a full employment economy and increase worker productivity, while reducing national energy consumption by 25 percent…[in addition] some 20 to 30 percent of this reduced demand could be supplied by renewable resources.” Efficiency is the recognized largest and most effective tool to reduce climate pollution: energy that you don’t need doesn’t require the burning of fuels that constitutes over 80 percent of climate pollution. And renewable energy also has near-zero pollution impact.

While the study did not explicitly look at carbon pollution, the results suggest that we could cut it by about 40-45 percent while adding jobs and growth if we optimize our energy dollars by getting more work out of less energy.

This was not even the first such study: In 1976 Amory Lovins published an article in Foreign Affairs arguing that efficiency and renewable energy technology would cost less and produce more prosperity than continued reliance on fossil fuels and nuclear energy, and predicting a radically different path for energy consumption than anyone else. Conventional wisdom, as propounded by the U.S. Department of the Interior and by essentially 50 out of 50 state utility regulatory commissions, was that energy use would more than double by 2010. (Thirty-eight years later we see that Lovins’ prediction turned out to be very close to where we are now—less than half what conventional wisdom had predicted.)

My more recent analysis, Invisible Energy, not only established that the United States can use energy efficiency to meet aggressive carbon pollution reduction goals of more than 80 percent before 2050 but also that doing so would help remedy much of the weakness in the economy that has still mired half the country (the lower-income half) in recession even today. It also lists 45 other studies dating back from 1975 to 2009 that reached the same conclusions. And the list consisted of just those studies that I was familiar with: serious Internet research would have found hundreds if not thousands of others of high academic quality.

Why is this finding — that solving the climate problem helps promote growth and jobs — so surprising to these economists? Yes, it is true that microeconomic theory says that if you want more of one good — such as environmental protection — you must accept less of other goods. But in economic science, as in all other sciences, such oversimplified models must be tested against observations.

In the real world, we have seen numerous examples, not just in the environmental field, where innovation and new technology (and often also good regulation) have led to new jobs and increased prosperity without serious tradeoffs. For example, over the last 40 years, government research on electronics and communications technology, coupled with the kind of regulation that produced the potential for mobile phones and the Internet, was the same sort of “free lunch” (or as Mr. Lovins has said  “a lunch that they pay you to eat.” )

In 2014, the conclusion that establishing and meeting ambitious climate protection goals helps the economy to prosper is not just a matter of study, but a matter of looking at established practice in some places. States that started on these policies soon after the initial studies were available in 1974-5 — California as a U.S. state and Denmark as a Member state of the European Union (a concept that didn’t even exist at the time) — have showed much more progress than their peers at reducing climate pollution and creating jobs and business opportunities in clean energy than their neighbors and peers.

For some reason, climate deniers and promoters of conventional resources have seemingly been able to marginalize the literature that shows that we would be better off in all ways if we limit climate pollution.

Old news in new bottles, featured by respected non-energy-focused economists such as the New York Times opinion writers, may be just what we need to end the false debate between supporters of business and environmentalists on the value of stopping climate change.

To quote Krugman’s conclusion: “The idea that economic growth and climate action are incompatible may sound hardheaded and realistic, but it’s actually a fuzzy-minded misconception. If we ever get past the special interests and ideology that have blocked action to save the planet, we’ll find that it’s cheaper and easier than almost anyone imagines.”

This article was originally published on NRDC and was republished with permission.

Lead image: Wind turbines via Shutterstock

VGB PowerTech, the European Technical Association for Power and Heat Generation, published a new VGB-Standard entitled “RDS-PP® Application Guideline Part 32: Wind Power Plants“. The new VGB-Standard is based on the international designation system RDS-PP Refer-ence Designation System for Power Plants which supports operators, manufacturers and service providers upon design and planning, construction, operation and maintenance of wind power plants which results in more cost-effective electricity generation from wind power.

Adaptability is the key to survival — both in nature as Charles Darwin observed, and in the business sector. As the solar industry continues to flourish, utility companies across the U.S. are beginning to witness how the traditional electric grid is transforming.

As tens of thousands of residents have solar photovoltaic (PV) panels installed on their rooftops and begin generating their own power, they need less electricity from the utility grid. The issue of net-metering, selling the excess solar energy back to the utility, has sparked a heated debate since utility companies must still incur the costs of maintaining the grid for all users — including the solar homes that are interconnected.

While companies spend their time battling for and against net-metering and state regulators strive to reach a compromise, other disruptive forces are quickly evolving. From battery storage and other renewable technologies to shifting consumer-usage trends and pressure to upgrade the grid, utilities face increasing threats to their centralized service model.

“The critical success factor for U.S. electric utilities will be changed behaviors,” stated Ernst Young Executive Director Dean Maschoff, co-author of the study, From Defense to Offense. The EY report discusses key survival strategies for utilities, such as focusing on the consumer, increasing competitiveness through new offerings, and providing value in connection with distributed generation.

As utility CEOs brainstorm how to modernize their business model, one comprehensive solution is spreading across America: community solar.

Focusing on the Customer

Nine out of 10 people in the U.S. want to harness the sun’s energy, but only 22 to 27 percent of residential rooftops are properly sited to host a solar system, reveals the National Renewable Energy Laboratory (NREL). The remaining 75 percent face obstacles such as tree shading, improper roof orientation, lack of financial ability, or they rent their home.

Community solar enables utility customers to buy or lease panels in a local solar array, or purchase clean energy from the solar facility—and receive credits on their utility bill. The EY report urges utilities to offer differentiated products with more pricing options, and community solar does precisely this. By providing its ratepayers the opportunity to use solar power at the level they feel comfortable with, a utility can satisfy a range of consumer demands.

In southwestern Colorado, the San Miguel Power Association (SMPA) is a rural electric cooperative that serves 10,000 members. “In our service territory we have a really strong desire amongst the membership to move away from large fossil-fuel generation to more distributed, renewable generation [that’s] local,” said SMPA Utility Program Manager Brad Zaporski.

Responding to this demand, SMPA partnered with Clean Energy Collective (CEC) a community solar developer that pioneered the first ownership model in the U.S. At the end of 2012, CEC developed the 1.12 megawatt (MW) Paradox Valley Solar Array — the largest community solar facility in the nation at that time. The 4,700-plus panel array provides a range of solar options for SMPA members. For about $790, anyone with an SMPA electric bill may a single 235-watt PV panel, or enough panels to completely offset their energy usage. Financing options are also available, making solar panel ownership available to more individuals.

“[Community solar] is basically a cooperative; it works perfectly with the cooperative business model,” Zaporski said. “Having a solar facility or any generation facility that the members can own themselves is just a perfect match.”

Increasing Grid Stability and Competitiveness

Americans are consuming a record amount of energy. Retail electricity has increased almost 3 percent per kilowatt hour this year compared to 2013, reports the Energy Information Administration (EIA).

Increasing demands of the antiquated utility infrastructure can threaten grid stability. But, as some power companies argue, so can the excess renewable energy fed back to the grid from rooftop arrays. Community solar can help mitigate the risks of brownouts and blackouts resulting from rising energy consumption and an increase in residential distributed generation.

Competitive pricing is also essential as new entrants enter the market. “Utilities need to do anything they can to minimize the trajectory of their rates without jeopardizing service quality, customer satisfaction or safety. This means reducing or optimizing both OM and capital investment,” advise Maschoff and EY co-authors Gary Paul and Ted Pelecky.

With the community-owned solar option from CEC, utilities are not required to invest any capital to construct the shared solar facilities. Instead, CEC finances its large-scale community solar arrays through a mixture of loans and tax equity. This means utilities can provide ratepayers with a unique solar offering, tailored to meet consumers’ individual energy needs, without spending a dime.

Providing Value in the Shift Toward Distributed Generation

Last year, a solar system was installed in the U.S. every four minutes, according to the Solar Energy Industries Association (SEIA). If the researchers’ 2014 forecast is accurate, a solar array is now installed every 2.4 minutes.

The solar revolution is sweeping across America, with no sign of decelerating.

“I think utilities need to understand that this is happening with them or without them,” said renewable energy strategist Carl Siegrist. “The very culture of what made utilities successful in the past isn’t going to serve them well today.”

Although the explosion of distributed residential systems is requiring utilities to adapt their model, it also provides new revenue opportunities. Having worked for an investor-owned utility (IOU) for years, Siegrist said there is value potential not only for the IOU but for its stockholders and customers as well.

The EY report mentions a range of services that utilities may consider to complement distributed generation, such as energy efficiency reporting, in-home diagnosis and upgrade services. When managed by a third party, community solar gives utilities time to rethink their products and services while their ratepayers enjoy the benefits of distributed generation — without replacing a single roof or chopping any trees.

“It’s obvious to me that a community solar program can be a lower-cost way for [utilities] to use solar to meet whatever needs they have,” Siegrist said. “They have got to feel like they’re continuing to make money for their stockholders, and serve their customers, and keep the rates within reason.”

He adds: “Between a world engulfed in climate change, it’s going to be an economic disaster or a very livable one where we’re transitioning into this clean energy economy. It’s economic success or economic failure.”

The original article was published on the CEC blog.  

Gamesa, a global technology leader in wind energy, has achieved a new product strategy milestone by having its G97-2.0 MW turbine, equipped with an infused glass fibre blade, obtain the first class A type certificate issued by independent certification body DNV GL under its GL2010 guideline.

A flagship 100MW project at the Quaid-e-Azam Solar Energy Park in Bahawalpur, Pakistan, will go online in the near future. Clenergy, the clean energy investor and solar solution provider, is proud to provide 40MW of mounting systems for the project. Clenergy is cooperating with TBEA SunOasis, a leading Chinese PV manufacturer and system integrator. TBEA SunOasis is the project’s EPC (engineering, procurement and construction) and OM (operations and maintenance) provider.

One third of all energy is wasted. Is PACE the solution?

According to current energy data, commercial and industrial buildings use about 60 percent of the energy generated in the U.S. and about a third of this energy, especially in older buildings, is wasted due to inefficiency. But how do we know which third, and what can we do about it?

The answer is: Plenty! And with new financing available, it will be even easier. PACE (Property Assessed Clean Energy) helps commercial, industrial and multi-family property owners implement energy efficiency projects, eliminate waste and save money using innovative financing options.

“People often see cost as the biggest obstacle to making the improvements,” says Jim Newman, CEM, LEED AP BD+C, OPMP, BEAP, FESD, managing partner of Newman Consulting Group. “Even when we can show the building owner that the improvements will pay for themselves in 18 months to five years.”  Through PACE, energy projects are now clearly profitable for all parties — property owners, contractors and financial institutions. 

New to Michigan, PACE has been working successfully in over 30 states. It helps eliminate one of the biggest barriers — access to capital and financing. The program allows qualified property owners to access 100 percent upfront financing using long-term loans (up to 20 years) in the form of a «special assessment property tax.» This makes energy efficiency and energy improvements much more affordable.

Almost any project that reduces energy or water usage or installs renewable energy systems is eligible. Said Newman: “With guaranteed energy savings you are cash flow positive from day one. When it makes financial and environmental sense, why not do it?” 

Typical ECM (energy conservation measures) financed by PACE include:

• Certified Energy Audit and evaluation
• Insulation
• Caulking, weather-stripping, and air sealing
• New, energy efficient windows, roof and doors
• Energy control systems
• Electrical Systems including DC micro grids, safety, and efficiency upgrades
• HVAC upgrades
• Improved energy recovery systems
• New, energy efficient lighting fixtures and day lighting systems
• Electrical systems to charge PEVs (plug-in electric vehicles)
• Water use reduction or efficiency
• More energy-efficient or water-efficient manufacturing processes
• Solar PV Energy systems (electricity) Solar Thermal (hot water)
• Wind (electricity) Geothermal (HVAC)

If this sounds like «free money,» in a sense it is. PACE projects qualify as an operating expense. This means owners can finance improvements without incurring additional debt on their balance sheet and while preserving capital and credit lines for core business investments. 

Newman, and his team of energy professionals at Newman Consulting Group (NCG) were among the first on board. NCG recently launched Optimized Building Solutions (OBS), a division dedicated to helping building owners make and finance energy improvements. OBS helps property owners navigate the paperwork and requirements to qualify for and implement PACE projects.

“You typically pay nothing down, and a PACE project must save more than it costs,” said Newman. The semi-annual special assessment payments must be less than the money saved in reduced energy costs for a net positive cash flow. “Once you have paid off the special assessment, you get all the savings with no payments at all.”

PACE benefits include:

• No charge to see if you qualify
• No up-front costs
• Long-term, low-cost financing that stays with the building if it’s sold
• Improved energy efficiency that will pay off year after year
• Improved indoor air quality (often goes along with improved efficiency) and improved productivity of people who work there.
• Higher building value (cite statistics)

“We decided to offer a turn-key service for property owners, including a free energy audit to determine if they qualify for PACE. Then we recommend the most cost-effective interventions and contractors. Plus, we fill out the forms, make the financial projections, manage the projects, communicate with providers, find the right contractors, and ensure accurate reporting. This all takes a tremendous amount of time. We guide you through the  process so time and energy (no pun intended) are not wasted. An ASHRAE level II audit or equivalent is required, and the cost is included in the package,” adds Jim.

To see if your property qualifies for PACE financing contact Newman Consulting Group, www.newmanconsultinggroup.us.