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  • "Power Purchase Agreements" - good or scam?

    I am seeing a couple of companies in my area that are offering "Power Purchase Agreement" type deals - You put up about $1K up front, they put a system on your roof and you commit to purchase the electricity produced by the system for the next 18 years at a "locked in" rate about equal to the current electric rate... They take care of system maintainance and upkeep. (They also collect all the gov't handouts)

    Unlike CitizenRE, this appears to be a reputable company, using known products (i.e. Evergreen panels) and established installers, etc.

    The assumption they make is that electric rates go up at about 5.5% / year on average, and that by locking in at todays rates, you save as the rates go up.

    Is there any experience here with this type of deal, and any opinion as to whether it is a worthwhile thing to get involved with, or a scam (or possibly honest but just a bad idea from an investment standpoint...) I would like to do solar, but don't really see it making sense at current prices...

    Gooserider
    Heat with wood, starting to study other energy conservation / alternative energy stuff
    Moderator on Hearth.com

  • #2

    Re: "Power Purchase Agreements" - good or scam?

    Re: "Power Purchase Agreements" - good or scam?

    I, personally, would stay away from from the offer unless I really understanding the details. What happens if you sell the home and the buyer does not want the panels--do you have to pay?

    How are "today's rates" locked in? In California, the whole "Smart Grid" is going to hit big time in the next year or two. All existing rate plans (especially for GT solar) are changing dramatically. What they will look like in several years is anybody's guess.

    But--our "base rates" may go down by 5-20%--but our "peak rates" may go up by 5 times (afternoon peak time, some XX days out of the year). Here--if you use power for A/C and cannot shift your usage--Here we may still have to pay the $0.60 per kWhr (business is $0.75 per kWhr). If you have enough solar--it may still work out OK--just don't know.

    Also, given what is happening right now with financial and contract law, and changes to the regulatory environment--there is just no predictability out there.

    There may be some "advantages" for the company that are not available to you (the whole lease-back and tax structures + plus various rebates and green fees) may become a win+win situation (you pay less, they get paid more).

    I don't know--I am conservative and I want to own, not lease/rent equipment. It may still make sense for you and others.

    -Bill
    20x BP 4175B panels (replacement) + Xantrex GT 3.3 inverter for 3kW Grid Tied system + Honda eu2000i Inverter/Generator for emergency backup.

    Comment


    • #3

      Re: "Power Purchase Agreements" - good or scam?

      Re: "Power Purchase Agreements" - good or scam?

      I agree, and certainly would get a lot more details before I'd want to sign anything, but that was the basic idea... You certainly make good points, and I agree about the virtues of owning as opposed to renting, but I don't see us doing the 20-30K of up-front money that a system would likely cost us...

      At least currently our rates are a LOT simpler than yours are. We get hit with a flat monthly fee for the connection, and then a bunch of different per KWh charges for "delivery services" and a "generation charge" for the actual electricity used, but they are all straight "flat rate" items, no "Time of use" or other fancy adjustments. Total is about $0.16 KWh.

      Supposedly we would end up getting two electric bills - one from the solar people for the power we produced, at a fixed rate of about $0.16 KWh, and one from the electric company for the connection fee and any electric we consumed over the production amount, at the then current rates.

      Where we could get hosed is if they change the rules as you mentioned, or if the electric co. rates go down (seems unlikely) or if they finally do come out with the often claimed but so far not produced "REALLY CHEAP (TM)" solar panels that get the installed price per KWh under say $1... Of course this last would sort of hose anyone that bought at current prices, but...

      Gooserider
      Heat with wood, starting to study other energy conservation / alternative energy stuff
      Moderator on Hearth.com

      Comment


      • #4

        Re: "Power Purchase Agreements" - good or scam?

        Re: "Power Purchase Agreements" - good or scam?

        I used the PV Watts site to compare Boston with San Francisco...

        And I was pretty surprised--a 1kW system in SF would generate about 16% more power than a 1kW system in Boston. Your "winter" 6 months of production is the same as mine--your summer production is depressed (if you don't need A/C--then probably not a huge issue).

        So--rate wise. With rebates and cheaper panels (than when I purchased almost 4 years ago)--you may get pretty close to your $0.16 per kWhr turnkey installed (ignoring lost interest on money, any property tax implications, any net metering/billing issues, etc.).

        Of course--spending $20-$30,000 to "pre-pay" your electric bill for the next 25 years is still not a ringing endorsement.

        What could you do with $30,000 for conservation in your home? What if you could not heat with wood anymore (coming close in California because of pollution laws). Would you use a heat pump for winter heat/summer cooling (if you need it).

        For me--the Time of Use metering with 1 year net metering has worked out very well (sell 1/2 my solar power at $0.30 per kWhr, buy "all my power" at $0.09 per kWhr--pay a $6.00 per month minimum usage charge)... However, with Smart Metering and Smart Billing plans (with appear to wipe out my current rate structure) may play havoc with my solar pv/consumption assumptions. Just don't know.

        -Bill
        20x BP 4175B panels (replacement) + Xantrex GT 3.3 inverter for 3kW Grid Tied system + Honda eu2000i Inverter/Generator for emergency backup.

        Comment


        • #5

          Re: "Power Purchase Agreements" - good or scam?

          Re: "Power Purchase Agreements" - good or scam?

          I agree, it was a surprise when I looked up the solar potential for the area, but every site I've looked at seems to agree, this area isn't as bad as one would expect from the map and our weather.

          We have a double hump pattern on our electric usage, even with my wood heating putting a big dent in the current HVAC system operation. If I do the retrofit radiant setup I'd like to have, I probably would still get a big bump in the winter due to all the circs and such in the heating system.

          In the summer, we get a double whammy, as we do use some AC, though probably less than you do in CA, and we have the two pumps for the swimming pool that are running a good part of the time.

          My reference bill is getting a bit old, but it shows a peak use of 2375KWH in August, with over 1500 for June-Oct. I then have a couple lower months before I bump back up over 1100 during Dec and Jan, then down to around 800 during Feb-May...

          I could do a LOT with 30K on the house - which is why the big hesitation on the solar - there are a lot of other things (insulation and siding to start with) that it needs more.

          One of the reasons I want to change my wood heating setup is that I am worried about pollution - though someone needs to clobber the politico's with a log until they figure out that properly burned wood is NOT a problem... First off they are inherently "carbon neutral" so aren't a problem from a greenhouse gas standpoint, and secondly a modern EPA stove is very clean burning and efficient (smoke is wasted energy!) To do even better, a gasification wood boiler with storage setup, if run on properly seasoned wood, has over 90% combustion efficiency, and emissions that get close to that of a gas furnace (which is NOT carbon neutral...)

          Of course, the gov't is doing it's best to screw that up - current MA boiler regs require an ASME "H" stamp - not possible on the European boilers (which are built to a TOUGHER standard) and an extra added cost from the two US companies that offer the ASME stamp as an option. I'm involved with the fight to change this, but it adds to the complications.

          Gooserider
          Heat with wood, starting to study other energy conservation / alternative energy stuff
          Moderator on Hearth.com

          Comment


          • #6

            Re: "Power Purchase Agreements" - good or scam?

            Re: "Power Purchase Agreements" - good or scam?

            Wow!

            That is some electric bill... I live south of San Francisco by 20 miles--so we only would like A/C for maybe 2 weeks of the year.

            You are literally using (at times) 10x as much power as our home (of course with us; no A/C, no pool, no well, and use natural gas for cooking/heating/hot water).

            If Mass. ever looks at California's electric rate system (at least for northern California)... Anything over 900 kWhrs a month--you would be paying $0.44 - $0.60 per kWhr--probably giving you a $1,000 per month bill on occasion.

            Personally, while GT solar would make sense in California with its very high rates (GT is cheaper than the power company at those levels)... I would really look at each of your major usage points (measure/estimate kWhr per month usage) for Pool, AC, etc. and go whole-hog on conservation.

            New A/C (and or heat pump). If you use enough A/C, can it be used for hot water/pool heating? Insulation + new windows + more insulation + energy start appliances + look at pool pumps/filter system + heat recovery ventilator + etc... (in our area, homes before 1970's were built with no insulation and single pane windows--I ripped down our interior drywall and insulated; and replace the old wood windows with double pane low-E vinyl windows).

            If your home is brick (or some other solid construction)--adding insulation may not be "so easy".

            While you could install solar--at these usage levels, it would be a very large system (10kW or more?) to completely offset your power bill (depending on your total yearly usage).

            -Bill
            20x BP 4175B panels (replacement) + Xantrex GT 3.3 inverter for 3kW Grid Tied system + Honda eu2000i Inverter/Generator for emergency backup.

            Comment


            • #7

              Re: "Power Purchase Agreements" - good or scam?

              Re: "Power Purchase Agreements" - good or scam?

              We use Natural gas for the HVAC system, DHW, clothes dryer and cooking...

              House is stick-built, approx 1980 - some insulation, but not real well done as best I've been able to determine. "Design Day" heat load (0* ext, 70* int temps) is about 88KBTU/hr. AC is a relatively new (~7-8 yrs) Tappan central unit, supposedly one notch down from the max efficiency they offered at the time. The furnace is a mod/con high efficiency unit. What we were told by several heating contractors when we replaced the old system that the house came with, was that we are too far north for a heat pump to work well, unless we went with geo-thermal which is WAY expensive - (install costs are much higher than expected savings over the life of the unit) I could see about putting the AC into the pool, but I don't know if that is an affordable option...

              Most of our major appliances are older and on the energy-hog side, but every time I've run numbers, it doesn't seem to make sense to replace working units - if something dies in a non-repairable way, we will replace w/ energy star, but not until...

              We definitely need to improve the insulation, and replace a lot of our windows, problem is the way the house is built it will not be easy to do much with the roof area - 1/3 of the house is a living room that has a cathedral ceiling made of boards that are on the underside of the rafters - no place to put insulation, and hard to get at w/o major demo...

              Probably the biggest single killer that we could try to attack is the computer situation - the GF and I are both geeks, and we have a bunch of machines running at any given moment, most of them elderly hardware that don't have the latest energy savings features - however it is a MAJOR part of our lifestyle - and we don't think rebooting Linux boxes is proper behaviour...

              Gooserider
              Heat with wood, starting to study other energy conservation / alternative energy stuff
              Moderator on Hearth.com

              Comment


              • #8

                Re: "Power Purchase Agreements" - good or scam?

                Re: "Power Purchase Agreements" - good or scam?

                Originally posted by Gooserider View Post
                and we don't think rebooting Linux boxes is proper behaviour...

                Gooserider
                Unless you *have* to (new kernel, upgraded libc, etc.) then you are perfectly correct...rebooting Lunix is certainly NOT proper. Uptime is king.

                Comment


                • #9

                  Re: "Power Purchase Agreements" - good or scam?

                  Re: "Power Purchase Agreements" - good or scam?

                  It is a life-style choice... I (and my wife) tend to be "cheap"--and we are not worried about CO2 and the green house effect (that big ball of fire in the sky is responsible for warming around our home ).

                  Running older, large, computers 24x7 can be a killer for both the initial power to run the systems--but also the power needed to run the A/C cool the rooms/systems.

                  At least with California rates--it is very possible that you could replace your current "iron" with newer/faster/smaller/more efficient hardware.

                  One large Linux system architect I worked with probably spent months trying to make is IBM Think Pad work almost as well as a Think Pad running on Windows (and he still used his kid's PC to write reports in Word ). This was years ago...

                  This was a few years ago--has the "Linux" on laptop gotten better integrated with support for the sleep/hibernate functions yet?

                  As a hardware guy--I cringed every time I got a new major software release and the CPU/Memory/Disk/Networking requirements went up--and the resultant power increases. We were barely keeping even on the hardware side (using a made-up measurement like supported users per kWhr).

                  -Bill
                  20x BP 4175B panels (replacement) + Xantrex GT 3.3 inverter for 3kW Grid Tied system + Honda eu2000i Inverter/Generator for emergency backup.

                  Comment


                  • #10

                    Re: "Power Purchase Agreements" - good or scam?

                    Re: "Power Purchase Agreements" - good or scam?

                    Linux on Laptop? Yuck! That's mostly useless really.

                    I always setup my laptop as a dual-boot system. Windows because there's a lot of useful applications software for it (and all the good games of course), and Lunix for when I need to do the "IT" thing.

                    I use Linux on Laptop for stuff like cracking access point encryption, doing wireless site surveys and troubleshooting networks.

                    But of course, you don't usually need to run things like that 24/7 except when monitoring networks (accumulating data) for troubleshooting (or cracking) purposes. So in that case, I definitely don't want any hibernation, thank you.

                    But mostly Linux is used for servers, and *no one* wants or needs hibernation on a server.


                    As for "working well" - either OS works just fine on my Dell or Toshiba laptops.

                    Comment


                    • #11

                      Re: "Power Purchase Agreements" - good or scam?

                      Re: "Power Purchase Agreements" - good or scam?

                      We have a very simple household rule... NOMICROSOFT on our network! The GF has a Macbook (gift from her parents) the rest of our boxes are all Linux desktops. I do have WINE set up on one of my boxes so that I can run a couple of the energy related apps that haven't been ported over.

                      The only Microsoft box in the house is an old HP with a 32bit Celeron that was so old even *I* didn't think it was worth keeping in service - got an copy of W2K that I installed on it for the sole purpose of keeping the cable guy happy when we got our cable a couple of years back - It was amusing - brand new install, the cable guy couldn't get it working, I spent several hours on hold w/ CommieCast tech support, and they couldn't get it working either (but I'm pretty sure the box was thoroughly p0wned by that time), and they finally asked me if I had any other machines I could try... I admitted to the house network of Linux boxes, and pointed out that they didn't support those - they said "try it anyway" - plugged in and it has "just worked" ever since...

                      IMHO one of the biggest reasons NOT to get new hardware is that I'm not interested in any sort of Microsoft box, but none of the stores seem to want to sell MS-free boxes, and I'm not interested in buying more chairs for Balmer...

                      Gooserider
                      (Member FSF)
                      Heat with wood, starting to study other energy conservation / alternative energy stuff
                      Moderator on Hearth.com

                      Comment


                      • #12

                        Re: "Power Purchase Agreements" - good or scam?

                        Re: "Power Purchase Agreements" - good or scam?

                        Originally posted by Gooserider View Post
                        It was amusing - brand new install, the cable guy couldn't get it working, I spent several hours on hold w/ CommieCast tech support, and they couldn't get it working either

                        Gooserider
                        (Member FSF)
                        Been there, done that...several times. The solution I found that usually works is to tell them that I'm going to use my own router - then they just ask for the MAC address of my router. I give them the MAC of my lunix box. They set that on their end and I'm in.

                        (If you are FSF I suppose I should say GNU/Linux to keep RMS off my ass. Hell, he's right about that anyway - as I well know since I was using Yggdrasil in '93.)

                        At one point in my lab at home I had:

                        * A DEC PDP11/23 running VMS 2.0
                        * An HP9000/300 running NetBSD
                        * A couple of Macs (pre-OSX)
                        * A couple of Winblows machines
                        * A stack of 15 VALinux boxen - 13 in a Beowulf config
                        * Two of those 15 as failover load balancers running VRRP
                        * An Amiga
                        * A box running OS/2

                        At one time or another I've also worked or played with QNX, BeOS, SCO, AT&T 386, and naturally, Novell. Prolly a few others that I've forgotten. Oh yea, here's one, NextSTEP. Oh, and Irix. Oh yea, SunOS/Solaris too.

                        I no longer really care about what OS...to me they're just different flavors of microcomputer OS and I'll work with whatever is handy or gets the job done.

                        Comment


                        • #13

                          Re: "Power Purchase Agreements" - good or scam?

                          Re: "Power Purchase Agreements" - good or scam?

                          Well I'm more of a hardware guy - don't do any serious software, closest I've gotten to programming is a bit of Fortran in college (on punchcards) and when I was file area manager for the late great Boston Computer Society IBM subgroup BBS and had to maintain the several hundred line DOS batch-file that processed the uploaded files every night...

                          My GF is a very senior level SW engineer though, and has done just about any platform / any language at some time or another... Between us we have about a half dozen machines that are likely to be on at any given time, and another dozen or so down in the basement "boneyard"

                          A while back I decided to put in a low-voltage network, Ethernet, phone, and cable TV and ended up pulling over 6,000 feet of wire into the walls, in order to put outlets in every room of the house - even the bathrooms. I don't have PC's there, but I do actually have phones - as I've noticed the distinct correlation between "comfort level" and the odds that the phone will ring...

                          (Although we probably should drop this before the mods get on our case about going off topic...)

                          Gooserider
                          Heat with wood, starting to study other energy conservation / alternative energy stuff
                          Moderator on Hearth.com

                          Comment


                          • #14

                            Re: "Power Purchase Agreements" - good or scam?

                            Re: "Power Purchase Agreements" - good or scam?

                            Yea, I guess the mods'll get fed up with it at some point - then they'll get over it and forgive us for being bad little boys.

                            I'm a network guy myself - can't program worth a hoot. Well, I *can* but for some reason I can never really get into it. It just always seems like such a chore that I try to avoid it as much as I can.


                            So anyway, back on topic...

                            This power purchase thing is too new for me to have gotten a grip on the ins and outs of it - and who *really* benefits from it. It might work out to be a win/win situation, but I naturally have my doubts.

                            As Bill said, the contract obligations might be onerous. Getting stuck with making payments after you've already sold the house would suck, though of course you could compensate by making it so that taking over the lease on the power systems is a requirement of the purchase - IF the contract is assignable.

                            Or, you might be able to just pay off the contract, like paying off the mortgage, but you'd have to add that into the purchase price or eat it off your equity.

                            Comment


                            • #15

                              Re: "Power Purchase Agreements" - good or scam?

                              Re: "Power Purchase Agreements" - good or scam?

                              From our typing discussions here--I believe that if you put the money into home as a "remodel" for conservation--you will actually increase the value of your home (keep receipts and before/after power bills to show savings).

                              If you "put the money" into GT solar--at best, it is difficult to assign any value of the hardware to the buyers--My system generates about $500 worth of electricity a year. Not a huge amount of money. If the buyers pay $10,000 (for a $30,000 install) -- that is a 5% return on the investment--and not a cost savings for them if they pay $10k to the seller (at least at this time).

                              And, we had somebody here say that some houses where harder to sell with GT Solar--the buyers were worried about the thing bolted to their roof (and perhaps wanted it removed?).

                              -Bill
                              20x BP 4175B panels (replacement) + Xantrex GT 3.3 inverter for 3kW Grid Tied system + Honda eu2000i Inverter/Generator for emergency backup.

                              Comment

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