27 June 2011 – Johnathan Fahey at the Huffpost Green has a story to warm the hearts of all survival loving people everywhere, an initiative by Google to pay for solar power to be installed which homeowners sign up for at a cost lower than that of the local utility.
Google is investing $280 million to help private homeowners put solar panels on their rooftops. It’s Google’s latest – and largest – investment in clean energy
The money will allow installer SolarCity to offer solar systems to homeowners for no money up front. In exchange, customers agree to pay a set price for the power produced by the panels.
Google earns a return on its investment by charging SolarCity interest to use its money and reaping the benefits of federal and local renewable energy tax credits.
“It allows us to put our capital to work in a way that is very important to the founders and to Google, and we found a good business model to support,” said Joel Conkling of Google’s Green Business Operations in an interview before the company announced the investment Tuesday.
Google co-founder and chief executive Larry Page wants Google’s operations to eventually produce no net greenhouse gas emissions. To this end, Google has invested in wind farms in North Dakota, California and Oregon, solar projects in California and Germany, and the early stages of a transmission system off the East coast meant to foster the construction of offshore wind farms.
This will be Google’s seventh green energy investment, totaling more than $680 million.
The money goes into a fund that SolarCity will use to pay for solar systems for residents. This type of fund is common in the residential solar industry, but this is the largest such fund ever created.
A typical rooftop solar system costs $25,000 to $30,000, too much for many homeowners to lay out. Instead, solar providers like SolarCity and competitors SunRun and Sungevity can pay for the system with money borrowed from a bank or a specially-designed fund. The resident then pays a set rate for the power generated. The rate is lower than or roughly the same as the local electricity price.
A typical five-kilowatt system will generate about 7000 kilowatt-hours of power in a year, or about 60 percent of the typical household’s annual use. The homeowner buys whatever remaining electric power he needs from the local utility. The homeowner typically enjoys lower overall power bills and is protected somewhat against potentially higher traditional electricity prices in the future.
Electricity prices have not risen in recent months, unlike gasoline and heating oil. But they’re expected to creep up in coming years as the cost of increasingly stringent clean-air regulations are passed on to customers.
These types of programs don’t work well in all states or for all homes. In order for both the solar company to make money and the homeowner to save money there must be some combination of high local electric rates, state and local subsidies, and low installation costs.
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