This story was originally published on Wednesday, Sept. 2.
CPS Energy and its partners announced Wednesday that PowerFin Partners, a local solar project developer, has been awarded a contract to install up to five megawatts (MW) of solar panels on residential and commercial rooftops across the city at no cost to the customer.
Instead of paying a flat fee to lease customer rooftops like other programs across the county, SolarHost, operated by PowerFin, will pay the customer $0.03 per kilowatt-hour (kWh) produced by their panels for 20 years. The discount, HostCredit, will be taken directly off monthly electricity bills.
CPS Energy customers can apply for the free pilot program at www.solarhostsa.com, call PowerFin at (210) 996-1772 or email firstname.lastname@example.org. Projects will be selected on a first-come, first-served basis. Not all rooftops are suitable for solar installations. Location, roof materials, and shading will be considered in the evaluation.
PowerFin and its partners will start installing panels later this year.
"We don’t want it to be a real estate transaction, we want it to be about solar," said Jason Pittman, PowerFin vice president. By paying customers according to production, the program will more closely tie the technology and benefits to the customer while incentivizing them to maximize capacity of their roofs.
The average five-kilowatt rooftop system costs about $9,000. That's after local production (net metering) and federal tax rebates. CPS Energy has found that the majority of solar installations and customers benefitting from the utility's solar rebate have occurred in higher-income areas. The upfront costs of installing a solar panel is a barrier for many customers seeking to reap the benefits of solar.
In an effort to close that solar gap, CPS Energy launched two pilot initiatives: rooftop "hosting," referred to as "leasing" before this newly announced contract, and community solar, also known as "roofless solar", wherein customers essentially buy a panel and "put it out to pasture" in a larger solar farm. Clean Energy Collective (CEC), a Colorado-based solar developer, was awarded the contract for the latter program earlier this year.
Since 2008, CPS Energy has awarded more than $40 million in solar rebates for about 20 MW of rooftop solar – making San Antonio first in Texas for distributed solar capacity.
“SolarHost makes solar available to a much larger cross-section of our community by removing the upfront cost for the customer and in fact creating an income stream for them,” stated Cris Eugster, CPS Energy's executive vice president, in a news release announcing the contract on the utility's blog.
PowerFin and its partners will own, install, and maintain the equipment on residential and commercial rooftops and sell the energy to CPS Energy. The pilot program will last through the end of 2016, but PowerFin and homeowners will enter into a 20-year contract. Even if the program is discontinued after 2016, CPS Energy will provide the HostCredit to program hosts for 20 years.
Through its ambitious 12-year, $850 million Save For Tomorrow Energy Plan (STEP), CPS Energy had one of the best rebate programs in the nation, paying out $2 at first and then $1.60 per AC watt produced (up to 25 kW) as funding dwindled. Now, the well for solar rebates has run dry.
STEP is not just a solar rebate program. It also funds several different home efficiency programs aimed at reducing the community’s demand for electricity by 771 MW, the equivalent of a large power plant, by 2020. These include rebates for efficient appliances, thermostats, and retrofits for residential and commercial buildings – accessible programs that reach residents from a variety of income levels.
Pittman sees this program as a gateway to introduce customers to other energy efficiency programs and tactics in their homes. SolarHost is partnering with Build San Antonio Green, a nonprofit third-party building certification program for energy efficient buildings, to spread awareness of best practices for energy efficiency.
PowerFin's contract was one of three submitted to CPS Energy in response to the publicly-owned utility's request for proposals in February 2014. The solar development firm was started three years ago in San Antonio and has an office in Austin, but during its first two years it was a solar financing firm.
PowerFin has agreements with eight local solar installation companies that will build out 5 MW of capacity, half of which will be installed on commercial customer rooftops. Pittman estimates that will translate to about 500 homes and 25 business based on average system sizes.
But the contract isn't limited to just those eight. "We’re going to open it up to everyone— any installer is welcome to join our team,” Pittman said – as long as they meet quality and schedule requirements.
"We’re expecting the demand to be (so high) that if we had picked just one, they wouldn’t be able to do it all,” said PowerFin advisory board member Robert Miggins.
One of the main concerns of the San Antonio Solar Alliance (SASA), a small group of solar installers that had banded together to oppose the pilot program earlier this year, was that there would be a monopoly on installation contracts throughout the city as more customers opt for the less expensive rental option rather than pay the steeper upfront costs necessary if homeowners want to own their own system.
SASA also is calling for CPS Energy to expand its solar rebate program, which will run out of funding at the end of 2015, through 2020.
CPS Energy's contract with PowerFin, which allows it to use installers that live up to its standards, attempts to ease this concern.
Private sector contractors remain largely dependent on CPS Energy's rebates because of the still-high costs of solar technologies and materials. Local, state and federal incentives have subsidized rooftop solar installation across the country for more than a decade, but now, some say, it's time to ween the industry off subsidies to stand on its own.
The 30% federal tax rebate expires at the end of 2016 and may not be extended by congress.
"We’re just assuming that (the credit) is going to go away,” Pittman said.
The plan is that the demand from this 5 MW influx of installations will bolster the industry.
"Hopefully the balance of system and equipment costs will go down enough to make up for that 30%," Miggins said, confident that the pilot program will extend well beyond its trial period.
If the program is successful through 2016, CPS Energy will likely renew the program for a longer period and issue yet another request for proposal (RFP), opening up the contract to another round of bids.
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: A local installer adjusts panels on a San Antonian rooftop. Photo courtesy of CPS Energy.