What is a PPA?

Just a few years ago, it was commonly thought that the only way for a homeowner to go solar was to purchase the system with cash or to use expensive forms of financing to get a loan for a system.

Even with tax subsidies to help pay for it, this meant that most homeowners would think of solar in passing, or something they would never be able to afford.

That’s where a Power Purchase Agreement (PPA) came in and began gaining traction in the solar industry. A PPA is a long term agreement between you and a solar provider and/or installer to “lease” your roof in return for a lower energy bill. The installer will typically provide the panels, installation, and maintenance at zero cost to the homeowner, and in return the provider becomes your new utility provider.

While you do not save as much with a PPA as you would purchasing a system outright, it does mean that homeowners who never would have gone solar are able to lock in savings for 20+ years over what they would pay a utility company.

If you’re interested in using a PPA to go solar, here are a few pros and cons:

Pros

  • Zero upfront cost. It may seem like a scam, but dozens of large companies nationwide provide zero cost solar systems under a PPA.
  • Immediate savings. Solar companies typically look for homeowners who have an average monthly energy bill of $100+. This allows them to lower your monthly cost enough to provide value to you and them. As an example, typical savings for a California homeowner with a 2,000 square foot house is $100 – $200 per month.
  • Fixed costs. While utility rates go up every year, a PPA has lower increases and you might be able to negotiate zero increases over the life of the agreement.

Cons

  • You don’t own the system. This is a sticking point for many because they already own their home, and don’t want to “lease” their roof for a long period of time.
  • Lower savings. In return for a free system, the solar provider needs to make a profit, so you’ll still be paying a monthly fee, even if it’s lower than before.
  • No tax breaks. The solar provider is entitled to the tax breaks afforded a solar installation since they cover the burden of cost, installation and maintenance.

A PPA isn’t the perfect solution for every homeowner, but it has opened the doors for affordable solar to tens of thousands of customers nationwide.

California Solar Energy Overhaul and Why Switching to Solar Makes Sense

For many home owners in California, the increasing cost of energy has become a major concern. The results of the economic glut are still being felt in many California homes, and as a result, homeowners are beginning to consider cheaper, affordable and cost effective solar energy. With the rising cost of living and mortgage rates, many homeowners have begun to shun traditional energy utilities for cheaper and friendlier solar energy.

California recently approved AB 327 which is meant to introduce radical changes in the energy sector particularly when it comes to reviewing current electricity rates. The bill will attempt to address the “affordability crisis” that some homeowners face. These efforts come at a time when California home owners and businesses have already begun making substantial investments in solar energy.

Basically, AB-327 is a rate reform bill that addresses inequities with electricity rates. In a message from Governor Jerry Brown [1] concerning AB-327 he explained that it is meant to “protect low income energy users and maintain incentives for renewable energy investments”.

In the solar industry, the biggest question surrounding this legislation is simple: how will these changes affect homeowner’s interest in switching to solar energy? How does AB 3327 help or hurt the likelihood that homeowners will install solar panels?

The California solar energy sector has undergone many reforms in the past few years and is considered a model for other states (go Cali!). Each year, there has been a marked improvement and an increase in solar panels being used across California homes. Recent statistics have indicated that it is widely expected that the demand for solar energy panels in CA will increase by 56% in 2013. Despite concerted government efforts to convince CA home owners to continue using traditional electrical energy, solar energy seems to have captured the attention of home owners.

California solar energy is efficient, safe and friendly to the environment. Environmentalists have also pointed out that the use of solar should be enhanced for the sake of the environment. Recent statistics have shown that companies such as KB Home have decided to build several communities in California with the inclusion of solar panels as a basic amenity.

According to Tom Werner who is the CEO of SunPower California, a 3 Kilowatt solar panel has the capability to comfortably power a medium sized home for less than $15,000 one time investment cost. This is an attractive investment for home owners who are looking to reduce the cost of energy.  The best approach to benefit solar energy is to incorporate the cost of developing solar energy systems into houses during the construction phase.

Utility companies such as Edison International are under threat as their services could soon be overtaken by California solar energy. In the beginning, it seemed like those utility companies would be able to hold their monopoly over CA homeowners and penalize rooftop solar users.

Initially, the AB-327 legislation was looked down upon because it was going to give utilities the right to charge a flat rate to solar customers and to spread out the general cost of rates. Thus, utilities could ease the hit they were taking from rooftop solar customers. However, recent revisions to the bill have lead to a much friendlier package for solar customers and providers. The most important outcome of the new legislation is that it doesn’t complete discourage energy conservation by allowing huge fixed charges and fees for rooftop solar homeowners.

It makes perfect sense to go solar in California because even if Utilities are allowed to charge a flat, monthly rate to their rooftop solar homeowners (say, $10 per month), that will still be far less than the cost of standard electricity bills.

There are many benefits of using solar panels and CA home owners know this too well. It is for this reason that many home owners are beginning to focus on alternative energy sources in a bid to cut down the cost of energy. Despite the authorities’ efforts to streamline the traditional energy sector, it is expected that CA solar energy will continue to gain market dominance as the government continues to pass legislation that encourages energy conversation. Viva La Solar!

References: [1] CA Gov
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Solar Energy and the Green Power Market

A new milestone was reached in the evolution of solar energy. According to the Solar Energy Industries Association’s (SEIA) U.S. Solar Market Insight: 2nd Quarter 2013 report, released on September 12th 2013, the US solar market has had its second largest quarter in history.  “The industry installed 832 MW of photovoltaic (PV) capacity, up 15% over deployment levels in Q1 2013”, which means over 9,730 MW of cumulative solar electric capacity operates across the U.S. as we speak. This is enough to power 1.5 million American homes. The trend has increased rapidly over the past years, and, so far, 2013 looks like a new record year.  It is expected that by the end of the year, “a solar project will have been installed, on average, every four minutes in the U.S.”

U.S. Solar market and 2013 projections

During the second quarter of 2013, the utility PV market was the one to drive most of the growth, with 38 projects totaling over 450 MW of projects commissioned. The commercial sector was also an important market driver in some states, while residential installations carry on growing at a steady pace. The overall solar market is projected to grow by 30% compared to last years’ records, with projects accumulating 4,400 MW of PV capacity and 900 MW of concentrating solar power (CSP) likely to be commissioned by the end of 2013. In total, the solar energy generated in 2013 is enough to power another 860,000 average homes across the U.S.

The report also includes a ranking of 10 U.S. states, according to the solar projects installed since the beginning of the year, but also by Cumulative Installed Solar Electric Capacity. With 438 installed MW, California dominates both rankings by far.  Arizona and New Jersey are also notable runners up, having installed 90 and 78 MW of solar power, respectively, over the same period. The same chart indicates how solar energy is used by various sectors of the industry. About two thirds of California’s total installed capacity is utility-related, but residential and commercial uses are still the biggest installed capacity of the 10 states. Similarly, Arizona has few commercial and residential solar installed projects, but a considerable amount of utility projects, while North Carolina (the fourth place of the 10 U.S.states) only has utility-related installed projects.  On the other hand, New Jersey has an overwhelming commercial solar installed project, with almost no residential or utility installed projects.

The Green Power Market

Clearly, the solar market is a huge success, but what about the other sectors of the green industry? Obviously, not all locations on earth can benefit equally from sunny weather, and sometimes a grid-tied or hybrid solar system is necessary. In many cold climate countries such as the United Kingdom, relying solely on solar energy and living off-grid is rarely possible, and the most common option is to be connected to a dual-fuel energy grid that, as money.co.uk explain, supplies the rest of the energy requirements (not covered by the solar panels).  The question then becomes: how green is the extra energy we’re buying? In the U.S. there are plenty of options. Encouraged by continuous government and local policies, the U.S. green power market has become increasingly strong each year. According to the Green Power Network (GPN), part of the Office of Energy Efficiency and Renewable Energy (EERE), green power sales flourish. Over 220 certified green power companies are active across the U.S. Depending on location, some of these companies combine more than one renewable energy source, such as wind, hydro and solar.

Apart from the obvious environmental implications of switching from fossil-fuels to clean energy, there are also visible and immediate benefits. Renewable energy –and solar in particular– is becoming more affordable each year, as a combined result of the local or governmental policies and the industry’s development. As GPN shows, hundreds of governmental or local programs have been developed across the country, including utility green power pricing programs.  As a result, the green power marketplace became more competitive and prices declined dramatically. The solar energy market, for instance, is “more affordable than ever”, with the national average PV installed system price “declined by 11% to $3.05/W”, as the U.S. Solar Market Insight report states. From 2011, the average price of a PV panel has become 60% cheaper.

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Wind Energy: A Valuable Renewable Resource

With technology getting to the next level, one can observe a notable improvement in renewable resources across the globe and one of the most imperative is the Wind Energy. On a larger and commercial scale, governments have been working on making wind energy a reliable and constant source of energy; giving a hint of relaxation to hydro and thermal sources. Wind Energy is effective and efficient which surely makes it a reliable factor in the coming years. So, let’s explore the wind energy pros and cons and how it can actually help you reduce your energy bills and increase your energy efficiency at your home and office.

Wind Energy General Process: How it Actually Works

Before getting into the debate of how wind energy can serve you in various aspects; it’s necessary to explore how it actually works. If you have the required means, you can surely apply it for your personal use as well in your working areas and offices.. The basic structure showing the wind energy process and how actually the wind turbine works is shown in the following diagram.

Wind Energy

The diagram above shows the basic wind turbine which actually moves when the wind flows moving a gear box as well. The generator then converts this mechanical energy into electrical energy and with the help of power cables. The energy is then stored in transformers. Finally, it is transmitted to your homes by a channel of electric lines; stepping-down the voltage at every stage till it reaches your homes.

The wind energy plant should be placed in wide open areas where one can expect maximum wind exposure mostly in meadows and fields near seas. Wind energy plants may also be fixed within the sea maximizing both wind and tidal energy. This produced a considerable amount of energy.

Wind plants that are placed offshore have immense advantages, which are beyond the sea breezes. The seabed is relatively cheaper and since the ocean is not exactly prime real estate, much larger wind farms can be built there without citizens fussing over aesthetics.[1] It also helps bringing the costs down, which is a big positive on a large scale.

Small Scale Installments and Cost Saving:

Wind energy works on larger scales but you can surely install it in your homes and nearby your offices. The process is simple and you can produce your own electricity by installing a small wind turbine. What you need is a regular flow of wind. If you are not familiar with the process, you can hire professionals who are trained for this job and they can install the wind plant for you. Bes sure to check out our blog wind energy pros and cons for even more information about wind energy. You can find all the pertinent details of renewable resources and can get a lot of information on how to save your money. So, do visit the website for all the useful information.

By installing a wind energy plant, you are producing your own natural energy, so your electricity bills will undoubtedly drop. Although wind energy is gaining traction as a renewable source of energy, the most popular renewable energy source on a consumer level is still considered to be solar energy. Learn more about the best solar panels by exploring all of Energy Informative.

References: [1] NY Times
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