Residential home solar power customers are increasingly choosing to purchase a solar electric system for their property over leasing or signing a Power Purchase Agreement (PPA) to take advantage of lower system costs, the 30% Federal Investment Tax Credit (ITC) and the better payback economics of owning a solar system.
The University of Maryland Eastern Shore (UMES) today inaugurated a 2.2-megawatt (MW) solar farm that will meet 15 percent of campus electricity needs.
Covering 17 acres of land previously used for agricultural research, the 7,800-panel solar array is the "largest concentration of photovoltaic modules on one site" in all of Maryland, according to the press release. In its first year of operation, it should generate 3.3 million kilowatt hours (kWh) -- roughly the equivalent annual demand of 300 typical American houses.
Like most larger-scale solar installations, the University of Maryland's 2.2-MW array was completed by way of a power purchase agreement (PPA). SunEdison -- a large PPA provider headquartered in Beltsville, MD -- engineered and installed the system at no up-front cost to UMES or the state of Maryland.
When it comes to large solar energy installations in the commercial, institutional and industrial sectors, rarely are the solar panels and the host building owned by the same entity.
In other words, say Walmart installs solar power atop one of its stores. Instead of going it alone and owning the system itself, the retailer instead contracts with one or more other companies to get the project done. A solar company may design, install and maintain the system, which may actually be owned by, say, a third-party financing firm. Walmart, for its part, simply agrees to purchase the system's electricity output at a fixed rate for a specified term.
This arrangement -- and variations thereof -- is commonly called a power purchase agreement (PPA).
Q: Other than the word "solar", what do these five technologies have in common? Monocrystalline solar panels; polycrystalline solar panels; thin film solar; low concentration solar; high concentration solar.
California utility Pacific Gas & Electric Corporation (PG&E) announced yesterday a deal with SolarCity that will enable homeowners and businesses to install solar energy systems with small or no upfront investment. Instead of owning the systems, customers pay a monthly fee to SolarCity, which owns the solar panels and can sell the electricity they generate. As the owner, SolarCity also benefits from local and federal tax incentives designed to lower solar installation costs. Customers may choose to either lease the system or enter into a power purchase agreement, whereby they purchase the electricity generated by the system at a predetermined rate.
(1) Cash. This is how P. Diddy rolls. If you can swing it, paying cash for your solar PV system is the best way to go, especially in times (like these) when credit is tight. Added bonus: you may get to share rank with America's brightest stars, like Brad Pitt, Tom Hanks, Scarlett Johansson and Don Cheadle. Just check out BP's Solar Neighbor celebrity participant list.
AltaTerra Research Network brings business acumen and sustainability together in a host of advisory services and quantitative analysis projects. One of their latest products is a report on Power Purchasing Agreements (PPAs). The report looks at the performance of PPAs in 2008 and examines their performance in an uncertain market. Perhaps most importantly, though, for the solar industry, the report provides the first hard data on the numbers of PPA-funded solar installations nationwide in 2008.