CPS Energy Proposes Leased Solar Option

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Residential rooftop solar. Image via Flickr user Bernd.

Residential rooftop solar. Image via Flickr user Bernd. https://www.flickr.com/photos/cocreatr/5417864432/in/photolist-9fKYkJ-gts9JW-9dxZcs-9dxXX7-5RwsA-9duTLn-aXSp6v-9duUrx-2dRUst-9dy1cf-9dxZzJ-9dxXHG-9duUcv-9dxXPQ-amp4zo-9duTWv-gCrAfo-3He9XY-9dxYkj-9dxYZY-9dxZ4U-9duVAZ-9duWjg-9dxZ97-9duVwt-c2REkS-2dRQq6-9duUM2-9dxZJG-6Jb6DT-gtsqPt-gtrfrh-6sji9e-2dS8AF-exqUSs-9dxXvy-9dxXyY-9duUnR-4tmVnd-qgona-7V1EbV-9duWci-oLETZG-azjNeb-qsUZej-9vtbz1-6xHxxy-br1dCe-6Qdu7J-6ieG8A

CPS Energy announced plans Monday to seek proposals from solar installation companies that would lease residential rooftops where solar panels would produce energy sold back to the energy utility.

A request for proposal (RFP) for contractors/solar installers interested in taking on the contract, or purchasing power agreement, was released Friday and announced Monday on the utility’s Energized blog.

The pilot program, announced in October 2014, is big news for home owners that want to support alternative energy and save money on their electricity bills, but can’t afford the startup costs of installation. The typical 5-KW system costs more than $9,000, even after local and federal rebates. This solar leasing program would remove all costs for the customer while putting money in their pocket.

Solar installation companies would stay busy with new installations on leased rooftops with a guaranteed purchase of solar-generated power, making them less vulnerable to government reductions in rebates, which depress consumer demand.

Customers may receive a credit on their monthly bill for use of their rooftop or a check in the mail/direct deposit, depending on the final details of the selected contract.

The proposal request is for 1 MW of AC (alternating current) power to be made available for purchase by CPS Energy. However, ambitious installers can submit proposals for 5-10MW. If the pilot program works, CPS Energy’s “plan is to expand it to 25 or even 50 MW over several years. For comparison, since 2007 San Antonio homes and businesses have installed slightly more than 20 MW of photovoltaic rooftop solar,” according to Tracy Hamilton, project manager and author of the public utility’s blog.

For CPS Energy, the benefit of this arrangement comes in the ability to avoid long-term fixed costs associated with customer-owned panels. For low-income CPS Energy customers, it opens up a new option for solar and a few extra bucks to mitigate their monthly bill.

“CPS Energy is our utility, it’s owned by us, the people of San Antonio. And the idea of our utility putting solar on our people’s rooftops, instead of building another centralized power plant – it’s a very exciting thing, and Solar San Antonio (SSA) is very supportive,” stated SSA Interim Executive Director Anita Ledbetter in a news release. Ledbetter is also executive director of Build Green San Antonio, the nonprofit sustainable building resource and third-party green building certification program.

The rooftop leasing pilot was first suggested during Solar Working Group and, Ledbetter said, continues Bill Sinkin’s vision of “solar on every rooftop.”

The proposals will not be based on cost alone, said CPS Energy Vice President of Corporate Development and Planning Raiford Smith. “We’ll also consider the amount of and type of local content … how they plan to market to customers – what we really want to see is how do we broaden the appeal of these programs.”

Proposals are due by March 6 at 5 p.m. and must include a plan to start installing solar systems no later than May 31. Click here to download the RFP.

“We wrote the RFP to allow for as many good ideas as possible,” Hamilton said, adding that there could possibly be more than one contract awarded.

Of course, even if a customer can afford to install their own solar panels, not all homes are ideal for solar panel installation, said Smith. “Their house has to be oriented just the right way and have cash on hand, that just doesn’t happen very frequently … for multi-family residences, low-income (customers), or if your spouse doesn’t want those things on your roof, community solar program (will help) overcome some of these issues.”

Separate from the rooftop leasing program, CPS Energy is reviewing proposals submitted for its 1-MW community solar program, which basically allows customers to purchase panels in a centralized location and reap the benefits from that panel’s production on their bill.

Read more: Coming Soon: Accessible, Affordable Community Solar

CPS Energy will decide on a winning contract and make an announcement in late February or early March.

In the meantime, Hamilton stressed, there is no “list” customers can be put on to get in line for either the community or rooftop leasing programs – yet. And CPS Energy has already received many phone calls asking to be placed on one.

As local and federal rebates are set to expire in 2015 and 2016 respectively (which may or may not be renewed), utilities, customers, and the solar industry are looking for models that keep alternative energy efficient and affordable for all. Net metering will continue for the foreseeable future.

“People are still wondering which (program) is better for the market,” Smith said.

These pilot programs will help customers and CPS Energy start to answer that looming question.

CPS Energy has more than 130MW of solar power in commercial operation as part of its New Energy Economy initiative, which aims to meet 20% of its electricity demand with renewable energy by 2020. OCI Solar Power is under contract to develop 300 more MW through centralized projects in the greater San Antonio area. These residential programs help diversify its investment in solar by adding more distributed sources to the grid.

*Featured/top image: Residential rooftop solar. Image via Flickr user Bernd

Related Stories:

Coming Soon: Accessible, Affordable Community Solar

With Caveats, Solar San Antonio Board Supports CPS Energy Solar Leasing Plan

New Solar Plan Scraps Fees, Embraces Leasing

CPS Energy Solar Fee Debate Continues

Mission Solar Energy Officially Open at Brooks City Base

Mission Solar Puts San Antonio on New Energy Map

13 thoughts on “CPS Energy Proposes Leased Solar Option

  1. CPS Energy is thrilled with the positive response this program is getting. We’ve had lots of folks asking how they can sign up — but we’re not quite there yet.

    Because we don’t know know yet what the final parameters of the program will be, we can’t create a sign up list.

    Once we’ve chosen a partner and negotiated a contract (this will take several weeks), we will work with our partner to publicize the details of the program and identify eligible customers.

    Here’s more information about how the process will work:
    http://newsroom.cpsenergy.com/blog/rooftop-solar-customer-interest/

    And here’s more background on the rooftop program AND our first community solar project — hope to announce that one next month: http://newsroom.cpsenergy.com/blog/rooftop-solar-expansion/#comment-268791

  2. American Standard- Thanks for providing the very informative link, I heard the solar leasing programs were misleading; lots of complaints in the news recently, mainly in AZ.

    However, if I read the article correctly, CPS is not providing a lease on the solar equipment, they are asking households to host the solar equipment in exchange for a reduction in their utility bills. CPS is leasing rooftops instead of households leasing equipment. The $$ flow to the household not away from it. It doesn’t require any upfront or long-term $$ investment from the host. They host the systems and get discounted utilities – sounds like a win (CPS) – win (households) – win (solar installers – open new market).

    Sign me up!

    • Basking is correct, CPS Energy’s program is not like a traditional lease a la SolarCity, SunRun or others, where the customer pays monthly for the system. CPS Energy customers would receive a fee or credit (again, details not finalized, see my comment above) in exchange for hosting panels on their roof at no cost to them.

  3. It is not easy to find or sign up, but current CPS Energy customers can hopefully still opt to source their power from wind energy by enrolling in the Windricity program:

    http://www.cpsenergy.com/Services/Windtricity/

    There were also plans in recent years for a similar Solartricity program to support distributed solar ownership in San Antonio via customer enrollment (but I’ve never been able to figure out how to sign up as a customer to support this):

    http://sachamber.org/cwt/External/WCPages/WCEvents/EventDetail.aspx?EventID=881

    To note, most solar lease companies – such as Tesla spin-off SolarCity – now offer solar loan programs (where installed infrastructure is eventually owned through monthly payments typically lower than local utility energy rates and including the cost of providing energy to the home or business during the loan period).

    San Antonio is on its own with its current approach to utility-owned solar leasing (drawing criticism from the industry as anti-competitive; see http://www.usatoday.com/story/money/columnist/2015/02/15/loveless-solar-power-san-antonio/23384349/) – which might be cast aside as easily as CPS Energy’s 2010 ’20-year’ commitment to Solartricity: http://www.solarcity.com/

    For comparison, readers might look at efforts in Austin over the last 15 years to increase solar energy production via distributed ownership, a community solar program and commitment to renewable energy use and production by public buildings including schools (http://www.austinchronicle.com/news/2015-01-16/pioneers-or-settlers/alternative to net-metering).

    Austin currently aims for a 35% renewable energy mix by 2020 (50% and complete divestment from coal energy by 2035) and will likely achieve this goal in 2015; El Paso has made similar commitments and strides. Meanwhile, San Antonio has aimed and continues to hope to achieve a 20% renewable energy mix by 2020, factoring in all methods planned to date (utility-scale solar under construction, pilot community solar, pilot utility-owned solar leasing and windricity).

    There are currently no goals for solar leasing or community solar or use or production of renewable energy by public buildings in San Antonio beyond the hoped for 20% renewable energy mix by 2020. New meaningful goals related to renewable energy use and production in San Antonio – including by public buildings and for distributed ownership – could change San Antonio’s long-frustrated distributed solar market and the current solar reality (of roughly only 1% of rooftops with solar panels) for the better.

  4. Unfortunately, CPS has been lately trying to nix the rebates it extends for a Homeowner to purchase their own PV system. They add a substantial amount to the value of a home AND the increase the likelihood of selling the home faster when the time comes because the buyer knows they will have a significantly lower monthly bill.

    A privately owned system is usually purchased because of the local and Federal rebate programs. Without both, fewer households will get them.

    I believe CPS will use this new program to justify ending the local rebate program. Also, homes with a PV system which gives tiny savings because the homeowner is not the owner of the system will make it much harder to sell these homes years later. The benefit cost ratio does not work out as well as full ownership of a PV system.

    CPS wins. Installers win. Owners lose…

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