The Solar Leasing Explosion In California [Chart]

by Zachary Shahan.

California solar leasing
New California Solar Leasing Contracts vs. New California Solar Panel Purchases. Credit: Climate Policy Initiative

Originally published on Cost of Solar.

The solar leasing trend has certainly taken off. Over 75% of new solar homeowners in California are now leasing solar. This finding comes from a Climate Policy Initiative report on California solar policy and consumerism that includes a comparison of California solar leasing and California solar purchases.

The report comes to a number of interesting findings, but the finding on the shift from solar ownership to solar leasing is probably the most interesting. In 2007, only 10% of California homeowners were going solar through a solar panel leasing arrangement. The shift to over 75% solar leasing in 2012 is clearly significant.

As I just noted the other day, there are some huge reasons why California solar leasing (and solar leasing in other states where it’s available) has taken off — primarily, people love $0 down payments and financial savings from Day 1.

People are going solar for financial reasons more than anything else. Many people could probably save much more money down the road by purchasing solar panels (or, at least, their families could… if they don’t outlive the long lifespan of increasingly efficient solar panels). But waiting several years to get money back on an investment is not the route many people want to take. Who knows what will happen tomorrow?

Also, it’s worth noting that solar leasing companies don’t give you a bad deal. Solar leasing companies can actually take advantage of some federal solar panel incentives that normal homeowners can’t take advantage of. From Day 1, or very close to Day 1, solar leasing customers should benefit from savings on their electricity bills that outweigh their monthly solar leasing payments. The leasing companies also take care of maintenance, doing the paperwork to collect on your solar tax credits and rebates, and other such issues.

So, at the very least, solar leasing companies are giving us a much better deal than utility companies offer. What is there to complain about?

California Solar Leasing Booming Due to Solar Incentive Changes

The solar market is anything but stagnant. Due to solar energy’s many advantages (and lack of significant disadvantages), the market is growing fast, but the avenues along which it grows vary a lot from place to place… largely based on policies in those places.

California’s strong solar power growth has actually taken place “in the face of declining financial incentives for solar installations at the state level through the California Solar Initiative,” as the Climate Policy Initiative (CPI) notes. The California Solar Initiative (CSI) did a tremendous job stimulating solar power growth while solar panels cost a lot. However, a rapid drop in solar panel costs combined with remaining federal solar incentives has made solar even more competitive today without support from CSI than it was a few years ago with such support. And California solar leasing options have made the attractiveness of going solar without CSI support even more attractive for many people… well, over 75% of solar customers, according to the CPI study.

In actuality, right now might be one of the best times in the coming decade or so to go solar in California. Federal solar incentives are currently scheduled to expire in 2016. Solar panel prices recently fell through the floor due to economies of scale in manufacturing, oversupply of solar panels due to extreme ramp-up of solar panel production in China and other countries, and the cut-throat competitiveness that resulted. After the dramatic drop in solar panel prices mentioned above, supply has started to better match demand and prices have started to rise a little in 2013. Solar panel prices could fall again and go a little below where they were at the beginning of 2013, or they could rise a bit more — the future is uncertain. With costs near a record low, incentives still available, and solar leasing companies offering amazing 20-year leasing contracts, now is an excellent time to look into going solar.

But, as noted above, policies influence how people go solar, and how it would be best for you to go solar. Solar leasing is only legal in about a dozen states. And various states and municipalities have other solar policies that make other ways of going solar more attractive. For example, some states have “Community Solar Garden” legislation that makes community purchasing of solar power possible. Some municipalities have “PACE” legislation that allows you to go solar using a loan that you pay back through higher property tax payments. The practical result is very similar to that of solar leasing — you enjoy monthly electricity bill savings that outweigh your property tax increase, and you get to skip the high initial price of purchasing a solar panel system.

The solar leasing trend is certainly a hot one, as you can see from the California solar leasing and solar ownership study referenced above. However, there’s a lot of variation in solar policies across the US, and the best solar option for your neighbor may not even be the best solar option for you. The only thing that is more or less constant is that going solar is a smart financial decision for people all across the country, saving each of them tens of thousands of dollars. You can find out the best solar option for yourself by completing our very short form. We can help you to find what solar incentives and policies exist in your area, and we can help you examine the advantages of solar leasing versus solar panel ownership. Don’t delay and lose out on the tremendous solar options available today!

Join the US solar power rooftop revolution!

California solar leasing savings
California Solar Leasing Savings

This article, Solar Leasing Explosion In California (Chart), is syndicated from Clean Technica and is posted here with permission.

About the Author

Zachary ShahanZachary Shahan is the director of CleanTechnica, the most popular cleantech-focused website in the world, and Planetsave, a world-leading green and science news site. He has been covering green news of various sorts since 2008, and he has been especially focused on solar energy, electric vehicles, and wind energy for the past four years or so. Aside from his work on CleanTechnica and Planetsave, he’s the Network Manager for their parent organization – Important Media – and he’s the Owner/Founder of Solar Love, EV Obsession, and Bikocity. To connect with Zach on some of your favorite social networks, go to ZacharyShahan.com and click on the relevant buttons.

What is Renewable Energy?

by John Brian Shannon

Renewable energy is a kind of energy, one that is automatically replenished by the environment, such as the rainfall which is collected behind hydroelectric dams and can be used to produce hydroelectric power.

It may surprise you to know that there are only two kinds of energy; Renewable and Non-Renewable. All the different types of energy are categorized under those two kinds of energy.

The Sun’s light and heat is employed (directly) to produce solar power and (indirectly) for wind power production, and heat in the Earth’s crust is used to generate geothermal energy. Another type of renewable energy used around the world is biomass.

Please view the graphic below, to see the world’s total available energy from all sources.

One row displays Renewable Energy, while the other row displays Non-Renewable Energy.

We can see that in 2009, the total world energy demand from all sources, including all forms of transportation worldwide, amounted to 16 Terawatt years of energy — including all forms of transportation which itself accounted for one-third of all energy demand on the planet.

By 2050, it is expected that worldwide energy demand (including transportation) will reach 28 Terawatt years of energy.

Planetary energy graphic energy-resources-renewables-fossil-fuel-uranium
Planetary energy graphic. © R.Perez, K.Zweibel, T.Hoff. Comparing finite and renewable planetary energy reserves (Terawatt ‐ years). Total recoverable reserves are shown for the finite resources. Yearly potential is shown for the renewables. Image courtesy: Perez and Perez 2009a

We can see from the graphic that the Renewable energy from solar power has the most potential and by itself, could have produced an amount of energy 1437.5 times the total world energy demand of 2009 (including transportation).

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Amonix solar modules mounted on Sun tracking system. Image courtesy: Amonix.com

Even with the increasing energy demands of our civilization by 2050, solar power by itself, could provide 821.4 times the world’s total energy demand, including all transportation.

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Solar energy can easily provide all of our energy.

Of course, wind power could do the same between now and 2050, or even up to 2100 with its much higher level of demand. The Renewable energy available worldwide from wind power alone is equal to the energy required to power our entire civilization, including all forms of transportation.

Other types of Renewable energy such as Biomass, Ocean Thermal Energy Conversion, and Hydroelectric power, are important, but even when exploited to their maximum potential they are nowhere near being able to satisfy world energy demand — nor do they need to. They can complement solar power and wind power, adding to national electricity grids during times of the day with low wind activity and at night, when solar power is not adding power to the grid.

Another type of energy which can be considered renewable energy, (when the proper production processes are used) is the energy we get from from fuels such as gasoline, (when made from algae + water) or ethanol/methanol, (when it is made from a combination of organic waste material + enzymes + water).

Some biofuels are made from green plants, but require more inputs of water, fertilizer, and pesticides to grow them, than the final product is worth — which is why it is very important to select the right plants to create biofuel or it isn’t a sustainable energy solution. If the optimum plants are not selected for biofuel processing, government subsidies must then be employed to make the process affordable for farmers and biofuel producers.

Algae, switchgrass, jatropha, millettia and camelina, are sustainable choices for biofuel production, as is organic waste when processed with enzymes.

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If you add ordinary organic waste + tap water + enzymes (after processing, the result is) very pure gasoline + very pure CO2 for carbonated drinks + distilled water. Image courtesy: CORE biofuels

Due to the fierce competition in solar panel manufacturing since Chinese manufacturers entered the market, solar (PV) panels have dropped in price — so much so, that electricity produced at solar power plants can now be sold at comparable rates to the electricity produced at conventional power plants.

solar vs coal price 2011-2020
Utility-scale power plants, solar vs. coal 2011-2020. Image courtesy: cleantechnica.com

Wind turbines also have fallen in price dramatically and now compete against conventional energy around the world — with or without subsidies.

To compare Renewable and Non-renewable energy, it is important to examine two different variables; Subsidies and Externalities.

Subsidies:

  • Both Renewable energy and Non-renewable energy benefit from various subsidy schemes around the world.
  • The U.S. federal government subsidizes energy producers with vastly different subsidy rates for each energy type.
  • The various U.S. state governments subsidize energy producers with vastly different subsidy rates for each energy type AND subsidy rates vary considerably between the different states.
  • Sometimes a subsidy in country “A” (to promote extraction of petroleum for example) will have another subsidy added to it in country “B” which imports that petroleum (one subsidy on top of another subsidy) which helps bring down the price at the gas pump.
  • To make biofuel from corn (a poor choice of plant for biofuel production) farmers and producers were subsidized until January 1, 2013, by the U.S. government at $0.60 per litre.
  • Over time, subsidies can add up to many billions of dollars per year.
  • Please see the chart below, which shows the yearly subsidies enjoyed by the different energy producers in the U.S.
  • From the chart, we see that Oil and Gas receives $4.86 billion per year, from the U.S. government.
  • From the chart we see that the Nuclear power industry receives $3.5 billion per year, from the U.S. government.
fossil-fuel-subsidies
Annual energy subsidies in the United States. Image courtesy: DBL Investors What Would Jefferson Do?

How were these numbers arrived at?

In the case of Oil & Gas, DBL Investors took the grand total of subsidies paid to the Oil and Gas industry from 1918 – 2009 and divided it by 91 years, which equals $4.86 billion per year.

In the case of nuclear, DBL Investors took the grand total of subsidies paid to the nuclear power industry from 1947 – 1999 and divided it by 52 years, which equals $3.50 billion per year.

Similar calculation methods are applied to Biofuels 1980 – 2009 and Renewables 1994 – 2009.

Externalities:

  • Whatever the kind of energy, there are always externalities to deal with.
  • In the case of wind turbines, they can create noise, and for some people the noise is uncomfortable. And, they are either a source of wonder or an eyesore — depending on your viewpoint.
  • Hydroelectric dams dramatically lower fish stocks in rivers, although there have been some notable programmes designed to mitigate this in some river systems.
  • In China, the externalities from burning fossil fuels cause 410,000 deaths per year.

“China faces a number of serious environmental issues caused by overpopulation and rapid industrial growth. Water pollution and a resulting shortage of drinking water is one such issue, as is air pollution caused by an over-reliance on coal as fuel. It has been estimated that 410,000 Chinese die as a result of pollution each year.” – Common Language Project

  • This problem does not stop at the borders of any one country, for it is a worldwide externality.
  • The polluted air in China does not stay in the country, but circulates around the northern hemisphere, taking between 5 to 7 days to reach the western coastline of North America.
  • Similarly, the polluted air from North America takes 4 to 6 days to reach Europe.
  • And then there is the depleting ozone layer and oxygen levels in the Earth’s atmosphere caused by the burning of fossil fuels and man-made chemical compounds — along with dramatically increasing CO2 (and CO2 equivalent) gases, which increase the solar insolation value of the atmosphere (trapping heat) and thereby increasing the average worldwide temperature.
  • Scientists say that for each 1 C degree of global warming, it costs governments, businesses and citizens, 1 Trillion dollars per year to mitigate those effects.
Action_vs_Inaction_500
Climate action vs. Climate inaction.

According to 97 percent of the climate scientists testifying under sworn oath in the United States Congress in April of 2012, most of the global warming measured since the beginning of the Industrial Revolution, is ‘anthropogenic’ — that is, caused by humans. Profoundly, it is in our best interest to make the switch to Renewable Energy.

Massive spending reductions for governments will be the result of switching to Renewable energy, as the costs to human health (national health care systems externality) and the costs of mitigating the damage caused by climate change (agriculture, property and emergency management externality), will drop dramatically.

Not to mention the billions of dollars of savings when conventional energy subsidies end.

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Hybrid power plants employ both solar and wind, in this example. Image courtesy: SolarPraxis