A friend sent us a link to a company, CitizenRE, with a novel idea: renting solar panels to homeowners.We've looked at some of their stuff, which makes a convincing pitch, but we haven't yet found the small print, which could be a deal-breaker.
The concept is certainly appealing: CitizenRe will install solar panels on your home, which they will own. The only upfront cost to the homeowner is a $500 deposit, which is refundable, with interest, at the end of the contract. The homeowner then pays CitizenRe for the electricity generated by the panels, at the same rate it would pay the utility company. AND, the rate is guaranteed for 25 years.
Now that's quite a deal.
Having paid roughly $20,000 for solar panels on our home that pay for about 20% of our electricity, we wonder what the "catch" is. Certainly, we don't see how CitizenRe can make money on this proposition, but maybe we're missing some kind of hidden subsidy.
Perhaps CitizenRe is getting some carbon credits from the scheme; or maybe the service is only available in states--of which there are many (but not Virginia, alas) where the utility pays more for "green energy," meaning CitizenRe can earn more than what the homeowner is paying.
We'd be very curious to hear from anyone who's actually used this service, or who knows more about it!
10 comments:
It would be interesting to calculate the present value of 25 years worth of payments to this company based on the number of kw hours that your panels are used (with rate you pay on the 80% of your electricity obtained from the grid) and then compare the result to the cost of purchasing panels.
For the sake of argument, if your normal monthly electric bill is $200 and you replace 20% of that with solar panels (as in your home) you'd be paying this company about $40/month for 25 years (the period of the rate guarantee). If you assume an interest rate of 8% then the pv is about $5,200.
There must be a catch (like a hefty early exit charge if you break the lease)
Thanks Blue Dog. Btw--we just added you to our blogroll.
According to Dominion Virginia Electric, our power provider, we are paying 6.78 cents per kilowatt hour of electricity. That's cheap--in most parts of the country folks are paying more.
Our solar panels generate about 2700 kwh's of electricity per year, so at Dominion's rate we are "saving" only $183 per year.
Now it's not quite as bad as that. Dominion's summer rate is 7.18 cents per kwh, and we also save on taxes and distribution service by using less electricity.
Still, we don't pay anywhere near the $200/month you hypothesized. Over the past 12 months, we paid a total of $1141 to Dominion, so our savings is more like $225. (Jealous? We have done a lot to conserve energy, getting our total household usage down to a respectable 12,000-13,000kwh's per year, pretty good for a large old house.)
We're not very good with pv calculations, but it's pretty clear that over 25 years the company renting out solar panels would lose a bundle if they spent $20K to install the panels and reaped only $5625 in "rent."
Clearly, there has to be a catch, or maybe several. We could maybe see it working in a state like California, which has (a) more sunshine, (b) much higher electricity costs-->$.20/kwh, and (c) generous state subsidies for solar. Even there, however, it seems like a marginal enterprise.
The solar panel will generate more than enough electricity for your home. THere will likely be an inverter installed with the power unit that sends basically sends the excess electricity to the the power company, who then pays CitizenRe for that electricity. If you just bought solar panels and installed yourself, you could actually have a credit balance each month with your power company using the inverter to send electricity back out to the utility. THe same can be done with wind turbines installed on your roof.
I may have mistaken some of the details but this website that sells solar panels and turbines has an explanation in their site of how it works.
http://www.power-save.com/solar.html
You are correct - there is always a catch, and they will not provide the service unless they can make some moola!
Howdy,
I was one of the first people to sign up for a solar system from Citizenre in Sept. 2006 and also signed up as an Ecopreneur to help upgrade folks to solar.
I am happy to address any concerns.
As for the deposit, it is $500 minimum to $1000 maximum. The deposits are returned at the end of the agreement plus interest.
$500 covers up to a 5kwp system and $1000 covers the maximum size of 10kwp.
What Citizenre offers is one, five, or twenty five year agreements. Right now they lock your rate to what your kwh charge was in 2005 and that rate will not go up for your term.
What they do is look at the last three years of useage history if available and design a system to best suit your needs.
For someone like me that was quoted $42K for a system... I would not be going solar if not for Citizenre.
If they set someone up with a 5kw system the rate would be based on that system producing 5kwp. If the system puts out more power than is consumed by the customer the customer will receive those benefits directly from their utility company. Citizenre is not paid for th excess power sent to the grid.
Citizenre does claim any rebates and/or renewable energy credits since they own the systems. That is where some of the money comes from.
I amcurious what size system X Curmudgeon has installed. It sounds like it must be a small system judging by what you posted. Citizenre's smallest system is 2kw.
They have only installed two systems so far and both installations were recorded for viewing on TV the first aired in Nov 2007 on the "Living with Ed Show" on HGTV. The other is going to be on one of the Discovery Channels.
Citizenre is still in start-up and will hopefully soon have the funding to start production.
It is an awesome idea to bring solar to the masses... please wish them good luck!
Peace,
Frank
Frank--
Thanks for the info. Believe us, we think it's a great concept, and if CitizenRe can bring solar to the masses we're totally in favor of it!
The solar system on our home is pretty small--our older home has limited roof space, very little of which has a proper southern exposure, and some of that is blocked by trees. So we've done what we can.
We'll love seeing the day when everyone in our neighborhood has a combination of solar panels and wind turbines!
We have had solar panels for over 10 years and the So. Cal Edison Co. monitors it so much that we don't get much of a discount. Every time they change our meter our bill goes up. This year our monthly billing was only $1.50 then at the end of the year they billed us over $1800. It is not worth leasing these units.
These panels are made of crystalline silicon and gallium arsenide.
Solar Panels
Renting solar panels sounds like a good idea for the environment, I'm not sure if it will make that big of a difference in price, but I like the idea of it. It's probably not going to be a big power saver for yourself, but it might help out if everyone was doing it.
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