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Crowd-sourcing solar energy
Jim Gekas, treasurer of the University Park Community Solar LLC, points to the solar panels on the roof of the Church of the Brethren in University Park, Md.
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Tess Vigeland: When you live in a place with a lot of shade, it can be a challenge to generate electricity from solar power. That was the issue for the residents of University Park, Md. So in an effort to solve that problem, they decided to pool their money. They used the money to install solar panels on top of a local church, forming a small power plant in the process.
From WYPR in Baltimore, Stephanie Hughes has the story.
Sound of organ music
Stephanie Hughes: Caralee Vixler has been playing electric organ at the Church of the Brethren in University Park, Md., since she was 15 years old.
For the past year, that organ -- along with everything else in the church -- has been powered by solar panels.
Don Monroe: Yeah, for years, I had been looking at this roof saying, "Wow, we could do something more with that space."
Don Monroe is a member of the congregation. He's also part of the University Park Community Solar LLC, the group responsible for the panels.
Monroe: I think in this church, and certainly in a lot of other churches, these days there's a real sort of consciousness of what we call "care for creation," and this very much fits into that idea.
The project came about because it's one of the only suitable spaces in town. The group's president and founder, Dave Brosch, spent over a year trying to find a roof in University Park that would work.
Dave Brosch: Our neighborhood is filled with trees, and we have a lot of houses that are not oriented in the right way. So, we decided we needed to look for a large roof, and then combine our money together and bring it to one spot.
The group bought and installed the panels in July of 2010. Individual members could buy-in starting with $2,000. Now, they sell the energy to the church at a rate slightly lower than the local utility. Then, the company sells excess power back to the grid at wholesale prices.
Lisa Nau: The whole installation cost $130,000 so I guess you would say that bought me one-thirteenth of this power plant.
Lise Nau is another member of the LLC. Under the group's business plan, she can expect to recoup her $10,000 investment in seven years -- and then receive an 8 percent return in about 20.
Nau: It's a really nice way for individual people who don't have a lot of investment income to contribute to something that they believe in and that you can feel good about without having to lose money doing it.
Community solar has interested not just people who live in tree-lined towns, but also those who live in places with shared roofs, like apartment buildings and condos. Dave Brosch says he's been contacted by people all over the country.
Brosch: Connecticut, North Carolina, California, the state of Washington. We've been giving information to anybody who would like it.
However, University Park's model won't work everywhere. Anya Schoolman is the founder of the Community Power Network. She says local regulations determine how much money you can make by generating solar power.
Anya Schoolman: It really matters what incentives are in place. I usually tell people you've got to figure out if you want to work within the existing incentives or if you want to change the incentives.
Schoolman says the models for community energy run the gamut. Some are barn raising projects, where people lower expenses by learning how to install solar panels themselves. University Park is more of a crowd-sourcing model, where lots of people come together to cover costs. But she also said the more people involved, the more complicated the project gets.
Schoolman: University Park is pretty unusual, and the reason is that it takes some real stick-to-it-ness to get these kinds of projects done. Perseverance.
University Park is now trying to replicate its own model: Dave Brosch says the group is currently in talks to put panels on top of a school, a synagogue and another church. But it's not just a matter of finding a suitable roof; it's working out all the details.
Brosch: If you're doing something at a community level, it requires a little more organizing. And since we're a democratic group, democracies tend to be a little messy. It's more than just the panels, it's people working together.
So while you may still need an LLC to make a profit, it's starting to look like you may be able to turn to your village to raise a solar array.
In University Park, Md., I'm Stephanie Hughes for Marketplace Money.
The University Park Solar Co-op want to pass on additional information. Part of the return on co-op investment comes from selling S0lar Renewable Energy Credits (SRECs), at prevailing market price which can vary by state. Maryland and some other states have favorable SREC prices at present, though future prices cannot be predicted.
Here are some points on how to evaluate a solar co-op project:
1. An investment in a solar co-op is an investment in a hard asset with value since you own the panels unlike an investment in a stock certificate or bond.
2. The panels are guaranteed for 20 years and will go on producing after that so there is a return on investment far beyond the 7 year break even point.
3. You are investing in clean energy production, thus reducing CO2 emissions.
4. You are reducing the energy cost of the "host", in this case a community church.
5. What is the alternative safe investment for you today? Interest at the bank is at 1.5% or less and you achieve none of the above social benefits.
"Lise Nau is another member of the LLC. Under the group's business plan, she can expect to recoup her $10,000 investment in seven years -- and then receive an 8 percent return in about 20."
She makes doesn't make her money back for 7 years, and then won't receive any return for 20 years? Doesn't sound like a good investment from a strictly financial viewpoint.
Even with incentives, solar photovoltaics don't usually make good sense from a financial point of view.
Why doesn't anyone talk about solar hot water heaters? They actually DO make financial sense, but the media only seems to talk about solar photovoltaics. I guess hot water is just not as sexy.
Tom Long
Actually the return to members of the LLC is good, both financially and socially in terms of impact on energy use and carbon dioxide generation. Getting 100% of the initial cost back in 7 years is roughly 13% annually (including tax credits initially). From then on, each year the return on energy sold to the site (below cost) and excess sold back to the grid at prevailing market cost is etimated as ca. 8 % per year which is not easy to find these days. The installation on the church represents 100 solar panels on one site that is efficient/very low maintenance, unlike solar panels or solar water heaters located on individual houses that lack good solar exposure and for water heaters require maintenance on a hundred roofs. The excess energy generated by the panels in summer feeds back into the grid at a time of peak use for air conditioning. This reduces the need to overbuild capacity to meet peak energy demand. Dispersed solar panels can help reduce demand for electricity, reduce peak energy use, avoid brown outs, prevent mountain leveling to extract coal, and most importantly reduce the carbon dioxide released into the earth's atmosphere with disastrous effects on world weather patterns. Solar panels are not the only answer but they are a significant step in the right direction. The LLC is a model for a way that co-ops, communities, places of worship, schools, etc can take a significant step to generate energy locally that reduces carbon dioxide generation.
