When I pitch the virtues of solar power to my friends, I usually get two very long winded criticisms back regarding solar power in general: (1) solar power is a pet industry and would not exist as a commercial technology absent substantial government subsidization and (2) even with government subsidization, solar power is still too expensive.
With respect to criticism #1, I usually say, “Hey, you are probably right.” There is no doubt that the solar power industry has substantially benefited from aggressive federal and state incentives and subsidies, absent which, there may not be a solar power industry. Much of this has to do with the fact that the cost of solar power is still not as cheap as traditional energy technologies, although the cost of solar power is dropping as solar panel efficiencies rise and manufacturing and installation costs drop as well. Grid parity may not be too far away.
However, in response to criticism #1, I also respond by saying, “So what?” The fact of the matter is that federal and state governments have made renewable energy, particularly solar power, a priority as a matter of public policy and they are going to use our tax dollars to support it. Government subsidization of solar power is here to stay because policy makers, for better or worse, have deemed it a technology that can help diversify our energy needs, help clean the environment, and promote economic and jobs growth in a preferred industry sector.
So my friends can complain all they want about government subsidization of solar power, however, the fact remains at the individual level, solar power can save individual homeowners money on their electric bill. And frankly, as long as the government is taking your taxes anyway, why try to get some of it back through lower energy bills with solar power.
With respect to criticism #2, I am always amazed at people who are willing to look into every single way to finance a home, television, couch, TV, or a car, but never think out of the box when it comes to something like solar power, which can actually save them money. So many people argue that the pay back period is too long or it costs too much money. I like to say, “How much money is that new LCD television saving you every day?...yet you financed that?”
Fortunately, solar providers have been wise to this excuse and created alternative financing packages that take the excuses out of going solar. Solar companies like SolarCity in San Mateo and SunRun in San Francisco, use their own ability to raise capital to build a business model by owning and operating residential solar panels.
So instead of you owning the solar panels, they lease them to you at a fixed rate so you can enjoy lower energy bills without having to come up with a large payment for the system. Critics will argue that you are still paying a lease fee…true, but the lease fee combined with your savings on your electric bill is still usually lower than what you are paying. The savings is even greater when you factor in spikes in demand you would be experiencing from your utility during the summer and winter months.
Other companies have even gone farther and created another program that is similar to the lease: the power purchase agreement. A power purchase agreement is an arrangement similar to a lease where the solar provider/installer secures funding on their own for the solar project, installs the solar system in your home/office building and then sells the electricity from the solar system to the home/building owner at a fixed contractual price for a set length of time. So in the end, with solar panels on your roof, you become your own utility provider. No up front costs, just the benefits of cheap power from your roof.
Like any purchase, investing in solar power for your home is a personal decision and frankly it is not for everyone. That’s OK. But those that refuse to even look at solar on the grounds that the government subsidizes it or that there is no way to finance solar power, are really only costing themselves the benefits of a technology that may truly save them money over the near and long term.
Courtesy: Solar Energy Installers