Myth 1: Solar is too expensive.
- Power purchase agreements (PPAs) require zero capital expenditure on the part of the customer. Instead, customers realize savings from day one by locking in a lower, stable, predictable energy rate for the long term.
- The cost of solar equipment has decreased —and continues to decrease significantly. In many cases, solar is actually cheaper than traditional energy rates on a levelised cost of energy (LCOE) basis.
Myth 2: A 20-year contract is too long.
- 20-year power purchase agreements (PPAs) are standard and often necessary to warrant the large initial upfront investment.
- Contracts can be shortened to 15 years in some cases.
- The equipment’s useful life is much longer than 20 years – generally acknowledged to be 30-40 years.
- The longer a customer can lock in energy rates at historically low solar prices and historically high incentives, the better—this is a hedging strategy. The customer knows exactly how much they will be paying for the electricity generated by the PV system, so they can budget accurately, and will not be subject to significant fluctuations from their utility (i.e. the Polar Vortex).
Myth 3: With our energy costs going down recently, we shouldn’t lock something in for the long run.
With energy rates at an all-time low, your PPA provider is competing to provide a compelling offer:
- Now is the best time to go solar since your PPA rate competes with utility rates, which are very low.
- Natural gas (LNG) prices are tied to electricity costs, and are at an all-time low. Part of the price depression is due to LNG not being exported; however, that is set to change in the next few years, and will drive up LNG costs with electricity to follow. Natural gas prices have actually risen recently and are expected to increase on time accroding to EIA data.
- Through inflation alone, electricity rates will rise. Solar PPA rates do not escalate at a rate higher than 2%, which is a historic inflation rate.
Myth 4: Exploring solar is a waste of time because we looked into a solar PPA in the past, and the rates were too high.
- Over the past 12 months, solar PPA rates have continued to decline in most markets, and new state incentives, such as grants, tariffs, and renewable portfolio standards, have opened up.
- It’s relatively easy to get an updated quote from a new firm. With utility bills and site information, Sol Systems can turn around indicative pricing within a few days. This will allow a customer to, at the very least, see if PPA rates can offer savings and/or stable, long-term pricing to reduce operational expenditure volatility.
Myth 5: My rate through my electricity supplier is lower than the PPA rate, offering me no savings.
- When comparing current electricity costs to solar PPA costs, a customer must look at fully-loaded kWh rates, which include both supply costs from a third party supplier and the utility’s charges to distribute the energy.
- For every kWh a customer buys from solar, it offsets both the supply (generation) costs and the delivery (transmission, distribution, taxes and surcharges). The customer must compare apples to apples. Note: Net metering depends on state policy.
Myth 6: The utility will penalize me for going solar.
- State regulations dictate whether the utilities have to accept PPAs, provide net metering, etc. for both residential and commercial solar systems.
Myth 7: We are worried about the added weight on our roof and roof maintenance.
- Licensed engineers will ensure the structural integrity of the roof. If the roof is unable to support the added weight of just a few pounds per square foot, we explore structural improvements or other options.
- Panels can increase the longevity of a roof by protecting it from normal wear and tear, like sun exposure and extreme weather.
- Sol Systems always works with a customer’s roofer to ensure that the design and construction plan will not compromise the current roof warranty in any way; roof manufacturers will provide written confirmation that the roof warranty is in full effect.
- Modules are typically ballasted and installed on the rooftop with minimal – if any – roof penetration.
- The system will be designed to include appropriate setbacks from rooftop units.
- A customer’s PPA will include an operations and maintenance package that may include snow removal, if necessary.
- Modules can be removed on a spot basis to perform repair work after the system is completed, if necessary.
- The system owner is ultimately liable for any damages to the roof caused by the system. This is why many organizations opt for a PPA rather than owning the system themselves.
Myth 8: We don’t own our facility, so we can’t put solar on the roof.
- Often, even if a customer doesn’t own their facility, Sol Systems can help obtain necessary landlord approvals, and lock in facility lease terms that align with PPA length. Alert! We recommend that the customer has a conversation with their landlord to vet the opportunity as early as possible.
- Many of the largest solar portfolios are done with customers who are tenants in facilities; close to 50% of the stores operated by large national chains are leased. Many of these customers have installed solar on their roofs because the building owners see the value of solar.
Myth 9: Neighboring facilities will object to the installation because they won’t want to look at the panels.
- Aesthetic measures can be taken to reduce what some may consider an eyesore. This includes landscaping around fenced-in ground mounts or low-profile roof mounts that can’t be seen from the ground.
- Many permitting authorities require public comment on larger arrays, allowing neighbors to give feedback.
- Solar adoption is widespread in many states. There has been very little opposition based on aesthetics. It is not uncommon to require planning board approval that addresses these concerns. We would be glad to create renderings and solicit feedback from any neighboring facilities that have concerns.
Myth 10: (If carport): We don’t want to lose parking spaces or the ability to drive trucks through the lot.
- The carport installation will be performed so that columns are aligned with the central parking stripe, similar to the base of a light post, so no parking spots will be lost.
- Carports can be constructed at variable height to account for necessary clearance required at the drive aisles. Typically, clearances will be a minimum of nine feet.
- Typical designs provide adequate room to accommodate parking lot snow removal.
ABOUT SOL SYSTEMS
Sol Systems, a national solar finance and development firm, delivers sophisticated, customized services for institutional, corporate, and municipal customers. Sol is employee-owned, and has been profitable since inception in 2008. Sol is backed by Sempra Energy, a $25+ billion energy company.
Over the last eight years, Sol Systems has delivered more than 500 MW of solar projects for Fortune 100 companies, municipalities, universities, churches, and small businesses. Sol now manages over $650 million in solar energy assets for utilities, banks, and Fortune 500 companies.
Inc. 5000 recognized Sol Systems in its annual list of the nation’s fastest-growing private companies for four consecutive years. For more information, please visit www.solsystems.com.