New Solar Plan Scraps Fees, Embraces Leasing

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SRS Employee Drew surveys a recent solar energy installation at Green Acres Golf in San Antonio. Photo courtesy of Self Reliant Solar (SRS).

SRS Employee Drew surveys a recent solar energy installation at Green Acres Golf in San Antonio. Photo courtesy of Self Reliant Solar (SRS).

In a statement released Friday morning, CPS Energy outlined a preliminary plan to introduce a pilot rooftop leasing and community solar plan to future solar customers in San Antonio – possibly at no cost to the customer. The fate of the program may lie with Solar San Antonio Board’s vote of support during a meeting on Oct. 3.

The plan would continue CPS Energy’s $1.60 per watt (AC) rebate program for solar installations. Under this plan, possibly all the cost of the panels and installation would be shifted from the customer to developers contracted by CPS Energy. The developers would install and maintain solar systems on residential and commercial rooftops or in a community solar farm.

“This is a guaranteed, predetermined cash flow that enables the developer to obtain financing to pay the upfront costs of the systems.  The federal tax incentives would be available to the developer just like a solar developer that builds solar farms,” said Laurence Doxsey, chair of the solar advocacy nonprofit Solar San Antonio (SSA) Board. “This approach could be viewed as a solar farm development in scattered locations.  Part of the cost for a solar farm is to acquire land.  In this distributed program, the ‘land’ could be rooftops and smaller pieces of property but the payment for using the property goes to the owner in the form of a credit on the utility bill.”

CPS Energy, would buy the output of these new systems through a purchase power agreement (PPA) with the developer.

The developers, which will be chosen through a standard bidding  process, would be under contract to provide solar energy at a certain price. The exact design for the PPA has yet to be determined.

The CPS Energy Board approved a different plan for solar fees this summer to recoup fixed costs associated with maintaining grid infrastructure the public utility claimed the majority of solar customers benefit from, but do not pay. The solar fee plan was not pursued further after City Council members balked at the idea of charging solar customers a commissioning fee, per installation, and grid fee, per kWh.

“If the goal is to increase the amount of rooftop solar, what element of this plan do you see as (achieving that)?” the then-Mayor and an ex officio CPS Energy board member Julián Castro asked CPS Energy representatives in May.

CPS Energy President and CEO Doyle Beneby clarified that the solar fee plan would stabilize the local solar price so that “we have a reliable funding mechanism – so we’re not at this point every four years … then (CPS Energy) can be in a position where we can incentivize more because we have a sustainable model that demonstrates cost recovery.”

This answer was not enough to convince City Council – in the short-term, solar customers were still going to have to pay more upfront for an already expensive venture. So the Solar Working Group, which claimed to have no say or approval of the solar fee plan, went back to the drawing board to brainstorm new ideas.

Final details pending, customers would apply to participate in the pilot program and pay little to no money upfront, which is likely the main reason someone interested in solar would ultimately decide not to install. The typical 5 kW system costs on average $21,000 without any rebates and about $9,000 with local and federal rebates – well out of range for many pocketbooks.

“There may be some costs associated with it for a participant but likely much less than in purchasing a system,” Doxsey said. “The new plan opens up the opportunity to engage with solar energy to many people and organizations (e.g. households and nonprofits) that currently cannot afford to participate.”

Not all installers support this plan as it would, in effect, put a third party developer between the installer and customer.

However, some installers see this as an opportunity for a stable, predictable solar market with a guaranteed amount of MW to install in San Antonio – it also opens the market to homeowners who would not have been able to afford solar panels. Who developers hire to install and what criteria they use will likely be up to the developer.

“There are more details to discuss and evaluate and my goal is that we work out as fair a benefit to all parties as possible,” said Doxsey.

It’s been more than a year since CPS Energy originally proposed net metering plan to the solar community, which was met with unified, heated rejection from solar industry stakeholders. After the solar fee plan was rejected as well in July, this is the third plan put before the CPS Energy Board to recover the fixed costs from solar customers.

Updated: The PPA will look and act just like any other PPA with other wholesale producers.

“Instead of large scale, it’s now down to a distributed level,” said Raiford Smith, vice president of CPS Energy Corporate Development and Planning. “We cover the (fixed) costs of through the PPA.

“The bidding process ensures the most competitive price both for customers and for us,” he added. “(And) everybody gets predictability.”

“Everyone worked very hard on this,” said Tracy Hamilton, spokesperson for CPS Energy. “We’re very hopeful that the Solar San Antonio Board will support it.”

CPS Energy already 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. Commercial, utility-scale solar is essentially the first phase of reaching that goal, enhancing rooftop and community are a part of the next.

Full disclosure: The Arsenal Group LLC, which publishes the Rivard Report provided consulting services to CPS Energy in 2012. Monika Maeckle, who co-founded the Rivard Report, worked for CPS Energy as director of integrated communications and has now returned to consulting.

*Featured/top image: SRS Employee Drew surveys a recent solar energy installation at Green Acres Golf in San Antonio. Photo courtesy of Self Reliant Solar (SRS).

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