Solar@Work will combine multiple properties into one solar purchasing group. Photo credit: flickr/m.john16The World Resources Institute, with the support of the City and County of San Francisco Department of the Environment (SF Environment), has launched Solar@Work to help Bay Area businesses obtain affordable solar electric systems.
Solar@Work is a commercial solar group-purchasing program that was created to secure discounted solar pricing for commercial building owners, provide an affordable solar financing option, and stimulate local economic development.
Solar@Work is recruiting commercial facility owners in San Francisco and neighboring Bay Area communities who want to use solar power to offset their electricity usage and costs. The ideal site to participate would:
- Be an owner-occupied commercial property or long-term tenant (residential and government facilities are not currently eligible).
- Have maximum of 3 stories and an average electrical load;
- Have available space on the roof and/or parking area of 5000 square feet, or more, with no major shading; and
- Have no plans for major repairs or renovations to the potential installation areas in the next 15 years.
Interested companies should contact SF Environment to identify potential locations and discuss financing options. Applicants will be accepted through March 31, 2012.
Financing Options
Four options for installing solar power are available to commercial businesses and property owners through Solar@Work:
Cash purchase: No financing costs and all of the solar electricity generated over the system’s lifetime (more than 20 years) will go directly to reducing the company’s energy costs.
Solar lease: Through a lease agreement the solar unit will be hosted on the participant’s property, with the participant receiving all of the electricity generated. Under this option, new solar lease payments and electric bills can be lower than current utility bills, with few upfront costs and no liability on the company’s balance sheet.
Capital loan: Involves borrowing cash from a current or other local banking partner to purchase the solar system. The participant will be able to take any applicable tax benefits directly and will pay back the loan over the negotiated term of the financing. All of the energy generated will help to offset the participant’s usage, and electricity bills should be significantly reduced. However, the transaction will be on the participant’s balance sheet.
Other options: Options include power purchase agreements, property assessed financing, and loan guarantees for disadvantaged business locations. While these are not suited for all potential buyers, a variety of options can be investigated.
More Information
According to findings from SF Environment, the main obstacles keeping commercial property owners from installing solar power are high upfront costs and lack of access to affordable financing. WRI has piloted a Collaborative Solar Procurement model and found that it can lower costs and reduce staff resources necessary to navigate the complex solar purchasing process. SF Environment proposed the Solar@Work “aggregation” approach, which combines multiple properties into one solar purchasing group, as a way to remove financing barriers identified in San Francisco. To help make this a reality, WRI undertook an extensive solicitation process with technical support from Optony and NREL to find an experienced solar vendor with competitive pricing. SolarCity was selected as the best vendor to put solar to work for program participants.
Aggregated purchasing leverages companies’ combined buying power to obtain lower prices and attract financing for their solar electric systems through an equipment lease model. As a group-discount based model, the more businesses that sign up, the lower the prices will be for the entire buying group. All participants will receive a significant pre-negotiated discount, and the largest reductions will be available if the group installs more than 3 megawatts (MW).
Solar projects that are purchased and constructed under Solar@Work can expect lower-than-average solar pricing with preferred financing terms for qualified buyers. Performance guarantees will be included to ensure that the installed systems perform as expected and deliver long-term savings. Little or no money will be required in advance and the system will have a buyout option at the end of the financing term, which is expected to be 10 years. All applicable solar rebates will be received by the buyers, while the tax benefits will generally be used by the financing company to significantly reduce monthly payments and streamline accounting and reporting requirements.
DISCLAIMER: This project is being developed with support of the San Francisco Department of the Environment through the U.S. Department of Energy’s Solar America Cities program, and consultants Optony Inc and ICF International. The Solar@Work program is not in any way connected to the American Solar Energy Society’s e-bulletin of the same name. For more information on ASES visit http://www.ases.org/
