Special to The Washington Post
Ever heard of Tupperware parties for solar energy? Neither had I—until last week, that is, when I received an invitation to attend one.
For years, Lora Berg and her husband, Karim Chaibi, had been interested in the prospect of solar energy for her own house. But the upfront cost to install a system of panels on her roof, seemed prohibitive.
When the family returned to their Chevy Chase house last year after several overseas tours, they revisited the topic.
“It turned out we were lucky to come back at the perfect time to enter the market,” Berg said. “I had never thought I could actually do this.” After some research with the help of DC Sun, a coalition of solar neighborhood co-ops, she found several companies that offered lease-type arrangements in which no large investment from the homeowner is required—or even none at all. She invited two. Both provided her with proposals (see below) for monthly energy costs.
Not every home is a good candidate for solar. Berg learned that her house would work well because of its rather large, south-facing roof that was unobstructed by trees and other shade. The solar companies said her home had the potential of generating 100 percent of the family’s energy needs. (Not every home is suitable, and providers’ quotes will differ tremendously, depending on the individual structural circumstances and location.)
Until recently, purchasing and installing a solar panel system had been the only option. Now—in part due to tremendous tax incentives and private industry endowments—several firms offer to install the system on the homeowner’s in form of a lease or in an arrangement in which the homeowner signs a “power purchase” agreement with the solar company. Thus, solar is open not only to wealthier home owners, but nearly everybody whose home meets certain exposure criteria.
Many companies promise that installing a solar system would require little to no upfront fees and the monthly payments would result in a net lower energy bill – even lower than what you are already paying Pepco. The deal sounded a little too good to be true. So I wanted to find out more.
I attended Berg’s “solar party” last week that she held for friends and neighbors. At the party, a representative from Solar City, presented a slide show presentation and held an extensive Q & A, and they even paid for refreshments.
The company also pays homeowners referral fees. If friends and neighbors sign up, they get cash payments. Berg said she would donate hers to the neighborhood pool club.
About a dozen people showed up last Sunday, munching delicious home-made cakes and sparkling fruit juices while following the presentation of solar consultant Chip Zenke.
At the party, most people seemed initially skeptical. One guest repeatedly tried to question the sample calculations the presenter projected, looking for some hidden tricks. Another was worried about resale—what if the 20-year contract could not be transferred to the buyers, or if they didn’t want it?
Here’s how it works: Some solar companies require an up-front fee in exchange for a guarantee of a certain amount of power at a fixed cost per month. The homeowner allows the company to install the panels and then pays a monthly fee to the solar company, ranging from slightly lower than their current electric bill to about half the bill.
You have to still keep your Pepco account and remain connected to the grid, paying a fee of about $7 per month. Any additional energy generated by the system goes back into the grid but will be applied as credit for times (such as bad weather) when the household’s use is higher than what the panels produce. In reverse, Pepco will bill for consumption exceeding the guaranteed production of the panels.
The homeowner signs a contract for several years and some firms offer the option to buy the solar panels at the end of that contract and some do not. (Read the two proposals given to Berg by two solar firms below.)
At the party, some neighbors were disappointed that they would still have to keep their Pepco account. Another disappointment: Solar energy can’t function as a backup during Pepco’s notorious power outages. “That’s because of the reverse current,” Zenke explained. “You couldn’t turn off power into the net. Repairmen would be electrocuted.”
While there are many options are available and you still won’t get your power for free, the companies say the savings can be substantial. In Berg’s case, the household’s energy bill, guaranteed by the provider, would be reduced by nearly 30 percent.
We had also been wondering where the ‘catch’ was,” Berg said, “but now I think we’re definitely going to do it.”
Two of her party guests, including one who seemed most critical of Zenke’s presentation, have already contacted the consultant to set up their first appointment. If they sign up, SolarCity will pay Berg a referral fee of $400 for the first client that results from the party, $800 for the second, and $1,200 for the third.
“That Ms. Berg is going to donate the money is very unusual,” says Zenke. For other hosts, the solar Tupperware might just pay their energy bill for the next couple of years.
Lora Berg shares details of the two proposals given to her from solar companies, Solar City and Astrumsolar:
Here are the original offers:
Solar City offered zero down, 9,600 kwh of energy per year (800 kwh per month), at a cost of $87. per month. This included the option to buy the system after five, ten and fifteen years, or any time when we are selling the house, with an independent assessor giving the value for the system. This price has no escalator – it would remain constant for twenty years, while electricity prices from utilities are predicted to greatly increase.
Astrumsolar offered $2,678 down at signing, 11,501 kwh of energy per year, at a cost of $56. Per month. This system has separate inverters for each panel so it is less vulnerable. In addition, there is a fixed low cost for replacing a roof after ten years. There is no option to buy the system. This price is also constant with no escalator for twenty years.
In addition, we would need to pay the hookup fee to PEPCO with both offers, which we hear is in the range of 7 dollars per month.
Both companies take all of the incentives, since they own the systems.
We don’t have a clear picture of our usage yet but in winter we are probably in the range of 80-90 dollars per month with PEPCO, but in a much higher range in the summer due to air conditioning. Our house has gas heat, a gas stove, and a gas water heater.
We would definitely save money on our yearly electrical bill averaged out with both of these systems, and the amount we save would increase each year as utility electric prices rise. With solar city since there is no upfront payment, we would already save money in the first year if the system covers all of our needs. Solar City estimates that their system would cover our needs and that the Astrumsolar system is too big for our use level. I don’t know yet since we don’t have bills for a full year. Also, with a bigger system, we could migrate some of our gas use to electric.
Catarina Bannier is a real estate agent with Evers & Co. and a blogger on Active Rain cati.activerain.com.
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