(original article By Alana Melanson for the Sentinel & Enterprise on 07/20/2014)
FITCHBURG — Until recent years, going solar was reserved to homeowners who could afford or secure funding to cover the hefty upfront cost of the equipment and installation.
But now, with an ever-growing plethora of zero-down lease and power purchase agreement options available, more and more local homeowners are choosing to reap the financial and environmental benefits of solar power without making a significant investment.
John Angelini, 58, a retired Leominster police officer who now works as a school bus driver, said he’d thought about getting a solar photovoltaic system ever since he bought his Shea Street home three years ago, but figured it would be a large investment.
Then one day a few months ago, a company showed up at his front door and pitched the idea of leasing to him. He said they made him a good offer, but he shopped around to see what other options were out there. Angelini said he ultimately decided to go with Brookline-based Great Sky Solar, because their panels are all American-made and produce more kilowatts of energy per panel than the average. They also promised to meet or beat the offer of any competitor, he said, so he went out and got about six estimates and the company beat them all.
Angelini said it was also important to him that “they’re not salespeople.” There was no dog and pony show, no high pressure sales pitch, he said.
“They were laid back, they gave me the answers they had, they found the answers I was looking for, and they gave me time to digest everything,” Angelini said.
He said he brought the information to some trusted friends who are good with numbers to analyze them.
“I said, ‘Why don’t I want to do this?’ and we couldn’t figure out why not to do it,” Angelini said. “It’s really a no-brainer.”
He signed onto a 25-year traditional lease contract with a fixed rate based on his monthly average projected use, and received a guarantee that if production goes below 95 percent of the projected kilowatt hours the panels are expected to generate, the leasing company will pay him the difference.
Angelini also eliminated using oil to heat his home by switching over to an electric heating and cooling system, so he’s saving money on heat in two ways.
“We don’t need to be dependent on foreign oil with the renewable-energy sources that we have,” he said.
John Angelini has leased solar panels with Great Sky Solar to save on his electricity, heating, cooling and pool costs, shown here at his home on Shea Street on Friday afternoon. SENTINEL & ENTERPRISE / Ashley Green
With the solar panels, he’s expecting to save about 35 percent of his total electricity cost, and he’s avoided the upfront cost of $25,000 to $30,000 the solar panels would have otherwise cost.
Angelini said his rate will not increase by more than .029 percent a year. Even if Unitil never raises its prices, he said, 20 years from now he will still pay 3 cents less per kilowatt-hour than the utility charges.
Because his panels are currently producing more electricity than he uses, Angelini said he has credits that will help to cover his winter heating bills.
Angelini said his motive for going solar was completely financial, but reducing his carbon footprint is a nice byproduct.
John Bozicas, 31, and his wife, Johanna, 35, both local schoolteachers, said they were approached by Vivint Solar a few a months ago and they were told their Vine Street home has perfect southern exposure for solar panels.
After a roof inspection, analysis of past utility costs and calculation of an estimated amount they could save annually, they decided to go for a 20-year power purchase agreement, or PPA, for zero-down.
“I was looking for the catch for a long time and it never seemed to show up,” Bozicas said with a laugh.
Based on their usage, which is relatively high because of a pool and air conditioners, he said there’s the potential to save an estimated $800 to $1,000 per year, a significant amount to save for no upfront costs.
If you’re looking to move in five years, going for a lease option might not be the best idea, but if you’re looking to stay in your house longer than 10 to 15 years, “it’s kind of a no-brainer,” Bozicas said.
Even if the panels aren’t functioning 100 percent, Bozicas said, there won’t be an interruption in service, because the home is still connected to Unitil.
“At the end of the day, it’s a clean option. That’s my No. 1 reason for wanting to go solar,” Bozicas said. “I’ve been wanting to do this for a long time. We’re doing something good for the environment and saving money — it seems to be the right thing to do.”
Bozicas said he doesn’t know anyone else who’s done this, but based on his experience thus far, he’s already given four referrals for family members in Fitchburg and Leominster.
Haniel Olivera, 48, and wife Damarie, 47, have also signed a PPA with Vivint Solar for their Brittany Lane home, and the panels were just turned on Thursday.
Olivera, a software engineer, said he had previously worked for a solar company, Spire Corp. of Bedford, for a couple of years.
“At that point, I was interested in getting some home solar panels, but they were expensive,” he said. “They still are.”
When a Vivint representative came to the door in April and gave them an offer, Olivera said it sounded too good to be true at first.
“I actually researched it and compared it to what other companies were doing, because I’d never heard of a company coming in and doing everything and taking the whole cost,” he said. “What that allows us to do as homeowners is get the solar panels on, get the savings, but not have to foot the bill for the actual installation, panels and maintenance.”
The system that was installed on his home last month would have cost him about $23,000 if he had purchased it outright, he said.
Olivera said time will tell if the panels live up to expectations, but he’s hoping to save more than 55 percent of his electricity costs, or about $1,200 a year.
His father, Julio, 78, also has solar panels from Vivint, and is happy about a month in. Olivera said he has four friends in the area who are also looking to go solar.
He said his motives were both financial and environmental.
“As many people as can do it, the better,” Olivera said. “I think we definitely need to be more reliant on natural electrical sources and get away from coal and oil.”
Aaron Katz, CEO of Great Sky Solar, an employee-owned cooperative and installation contractor for Houston-based solar provider Sunnova, said leasing is a good option for homeowners who can’t afford the upfront cost of purchasing panels outright.
“Solar has become affordable to your average homeowner,” said Kady Cooper, director of public relations for Utah-based Vivint Solar. “You don’t have to pay $15,000 to $20,000 for a system for your roof.”
While it varies greatly across the country, Cooper said lessees can expect to see anywhere between 10 and 20 percent savings on their electricity bills, and sometimes more. She said that if Vivint determines it can’t save someone money, it doesn’t waste their time.
While each company is different, lease benefits often include free installation, maintenance and repairs; 24-7 monitoring of the system for both the company and lessee to ensure panels are working as intended; and all necessary permits, fees and inspections taken care of by the company. In exchange, lessees agree to purchase their power directly from the leasing company, usually at a lower rate than their local utility can provide. If a homeowner decides to sell their home before the lease is up, it is often transferable to the new owner. If removal of the panels is necessary before the end of the lease, a fee applies.
Owning the panels, however, is a better deal in the long run if you can afford the upfront cost, Katz said, and his company encourages it where possible. In addition to the electricity savings, there are a number of rebates and incentives at both the federal and state levels, he said, and Massachusetts currently has some of the best solar incentives in the country.
For an average, 25-panel system producing between 250 to 300 watts per panel, a homeowner could expect to spend as much as $35,000 to outright purchase a solar system, Katz said.
In owning the system, the owner can currently expect to get as much as 30 percent of the cost back from the federal government on their tax return — at least through 2016, he said.
“After that, it’s up to Congress — so we don’t know what happens after 2016,” Katz said.
As Massachusetts homeowner using the data parameters above can expect to receive a one-time rebate of about $1,250 from the state Clean Energy Commission, he said. The owner can also expect to get about $1,000 back from the state off of their taxes, usually a one-time deal but extendable to up to three years, as well as a check of about $1,400 each year for 10 years for Solar Renewable Energy Certificates, or SRECs, Katz said.
Solar panels tend to increase property values as well, he said, though there isn’t reliable data yet as to how much, and there are also tremendous environmental benefits.
The downside to owning, however, is “if it breaks, you have to fix it,” Katz said, especially if it’s not under warranty.
“That’s a big deal for a lot of people, even in wealthy neighborhoods, where they can pay for the system outright but don’t want to think about it, so they sign a lease because it’s easy,” he said.
Financially speaking, in a leasing situation, Katz said, the homeowner receives the benefit of lower electricity cost, while the leasing company usually receives all of the other financial rebates and incentives. Corporations also receive additional benefits, he said, such as rapid depreciation tax incentives.
“The leasing companies are making a hefty return on their investment,” Katz said. “Exactly how much is private information, but it’s a high-return industry right now.”
Constant monitoring of these solar systems is important so that issues can immediately be fixed, Cooper said.
“We don’t get paid unless your system is generating energy,” she said.
Representatives from both companies warned that not all leases are created equal, and some may not include operations, maintenance and guarantees.
Katz said the cash-back guarantee on lower production that his company offers isn’t unique, “but it’s definitely something we recommend people ask about.”
Different companies also offer different types of leases.
Whereas Great Sky Solar offers a more traditional lease, Vivint Solar offers a power purchase agreement.
Cooper said that Vivint Solar lessees pay only for the power they consume in a month, and if their systems overproduce, it will credit to the next month.
“So there’s cost savings not only at a lower rate, but there’s also the potential for it to add up,” she said.
The downside, however, is that the bill will vary greatly from month to month, likely skewing higher in the summer months, Katz said. He said that’s why his company offers a fixed rate that is an average, so the amount owed is the same each month.
Katz warned that some PPAs require lessees to purchase not just what they consume for electricity, but what their panels produce, which could be significantly higher, especially in summer.
Cooper said the downside to some traditional leases is that a monthly fee has to paid whether the panels are producing or not. With her company’s PPA, if something occurs that affects production, the homeowner pays proportionately, or not at all if no kilowatt hours were generated.