Lease Your Roof for the Solar Energy Revolution

By Bruce Allen, Miller-McCune.com. Posted February 2, 2009.

Solar power, always a popular subject but a tiny piece of America's energy puzzle, could be looking up -- literally -- as power drawn from America's roofs could provide juice without the carbon, trade balance and security concerns of fossil fuels and the huge upfront costs and land-use hassles of bigger solar projects.

Permitting delays for large photovoltaic projects (where sunlight hits silicon chips and creates electricity) are likely to disrupt an industry endeavoring to grow at 50 percent a year. Meanwhile, electricity from large solar thermal farms (in which sunlight heats water to turn electrical-generating turbines) need a vastly upgraded power grid to deliver the power they produce in remote areas to the nation's cities. A solar acreage land rush is now in full swing in the Southwest.

But there's a partial way around such regulatory and infrastructure bottlenecks. Rooftop solar installations -- putting photovoltaic systems on the roof of your workplace or even your home -- have few regulatory impediments and drip into the grid from a lot of points instead of gushing in from one massive operation.

Lots of small feeds could result in a big gain: In a 2005 study, Navigant Consulting estimated up to 710,000 megawatts of solar electricity generation capacity in the U.S. (or 75 percent of the nation's consumption) if every viable residential and commercial rooftop was utilized. (One megawatt is roughly the amount of juice needed for 1,000 U.S. homes.)

"This study shows that the available rooftop area can provide enough space to power a significant portion of U.S. electricity needs," Navigant's director Lisa Frantzis was quoted at the time. That's a best-case scenario, of course. In a 2008 report on market penetration of rooftop solar conducted for the National Renewable Energy Laboratory, Navigant estimated a more modest 2,000 to 4,000 megawatts by 2015. (It also predicts six times that if the right incentives -- like the Department of Energy's Solar America Initiative — were put in place.)

First Obstacle: It's Expensive

The cost of buying and installing solar cells are, however, a significant barrier to building owners investing in rooftop solar electricity. Still, new financing options are opening up, with solar power purchase agreements, or PPAs, solar leasing and solar financing districts increasing the options available to property owners.

Greentech Media forecast in early 2008 that PPAs -- "in which companies pay the upfront costs of solar-power projects in exchange for a contract requiring the customer to buy the resulting electricity" -- will drive 75 percent of commercial and industrial solar system sales by 2009, up from 10 percent in 2005. Residential solar lease financing is also beginning to gain traction in the United States.

In California and several other states, cities and counties can create energy finance districts for commercial and residential solar system purchases with loan payments made through 20-year property tax assessments.

Despite not renewing tax credits for renewable energy technology in the 2007 energy bill, tax credits and incentives are still an important component of solar photovoltaic economic viability in the U.S. and most other countries. Congress did pass the Expanded Federal Solar Investment Tax Credit in late 2008.

Some of its incentives for solar electric installations, including rooftop photovoltaic systems, include extending (for eight years) a 30 percent tax credit for residential and commercial solar systems, eliminating the $2,000 limit for residential solar electric installations, and authorizing $800 million for clean energy bonds.

How Much Am I Bid for This Shingled Beauty?

To accelerate solar energy investments, I have proposed creating an auction exchange market connecting solar integrators and building owners, which would be expected to drive market efficiencies and speed adoption of solar rooftop leasing.

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