Coordinating the Truth
right, but this only works with the add-in of state and federal subsidies, and the requirement by the state that the energy company must not only buy power from these things, but they have to pay a stupid high rate for it too. Once those things go away, then it stops being profitable for the solar companies.
Exactly, this is exactly how they make their money. I did a whole bunch of research on this before I signed on with Solar City, but what you stated is exactly what they are doing. I'm doing a PPA, not a lease, which is the missing 3rd option from the post above. Lease, PPA, Purchase. They make their money by getting the tax credit for the system "purchase", collecting the SRECS (Solar Energy Credits...which are market driven) and charging you for the power that your roof produces. Even on the PPA you have the option to purchase outright anytime after year 5, which I presume is how long they figure it will take them to get their money back and make a profit on you.
I looked at a purchase, but there are to many risks involved. Your payback period is dependent on the SREC value which varies frequently and is designed to decrease as the number of people who go solar increases. Your also then responsible for the maintenance of the system, and those power inverters are not cheap, and they are typically the thing that fails in a solar system. So, since Solar City is profiting off of a set of laws and tax breaks that I'm already helping fund, I figure I might as well get something out of it..so I made sure I wasn't going to get screwed and signed up.
The deal is, you pay for all the power that comes off your roof, whether or not you use it. If you produce 1200kwh in a month, you pay 1200, even if your house only pulled 1000. But, that extra 200 gets pulled into the grid where SMECO sells it to some other guy, and that 200 goes into your "bank". This continues through summer, until you start producing less power from your roof than your house is using, and thus start pulling back from the grid again. As this begins, you start to chew into whatever you had "banked" while you were overproducing. If you still have a positive bank balance at the end of the billing year, you get a check from SMECO. The concept is called net metering.
The only reason you save any money doing this, is because the electrical rate you pay for power produced off the panels is less than what smeco charges. Solar City starts (or did when I signed on) at 10cents kwh. Smeco is 14. Solar City raises that rate every year by 2 or 3% (I forget, I'd have to check my contract) for the full length of the PPA. Even if SMECO never raises rates again, I will still save roughly 6k over the course of the 20 year ppa. If Smeco's rates increase at any time, the amount I'll save goes up. So Solar City assumes the SREC risk, deals with any maintenance of the system, and I get to save around 50 bucks a month on average for my electric bill. Not to mention that any shingles under the solar system aren't getting much wear, and in my case the entire system is on the back roof where nobody has to see it. It was basically a no lose situation for me, and so far I've been very happy with the setup (minus a little fuss over the first billing period or two while we got things worked out).
If anyone has any specific questions about it, PM me, I'll do what I can to answer it. I even wrote a small perl script to figure out what the savings/loss would be over the life of the PPA given SMECO's rate changes, Solar City's changes, and estimated system production vs usage per month. My Dad then converted that into a spreadsheet that graphed it, and also accounted for lost system productivity as the panels aged. I also have the contact information for a sales rep that IS knowledgeable and is not pushy at all. If I put you in contact with him (Wayne), he'll know right away to provide the extra information you need to plug into that spreadsheet, because I hand it to everyone I refer. Most folks save money, but some don't..so it's worth looking at.
Just educate yourself carefully before signing up, and read the fine print. As for the line workers...the system automatically shuts down if the grid goes down. I've been told that battery backups are on the way for MD, and may even be going with new systems now..you'd have to ask. If that's the case, the system can persist and run in the event of a power outage.