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Before we dive into this conversation – let’s be clear that SRECs (Solar Renewable Energy Credits) can be the most confusing part of figuring out the economics of a solar project.  Let’s also be clear that – as with anything confusing, (as well as possibly boring) – the temptation is to remove the confusion as quickly as possible.   In the world of solar installation and selling SRECs this sometimes translates to simply selling up to 15yrs of SRECs all at once to a solar installation company, who then installs the system at a bargain price.  Buyer beware – the immediate gratification of selling all of your SRECs in one fell swoop could be misleading.   When it comes to How and When you get paid for your SRECs “…the Sooner the Better”  may not be a sound financial strategy.

That said…Let’s talk Solar Renewable Energy Credits in Washington DC.

Both Maryland and Washington DC, along with eight other states have enacted the Renewable Portfolio Standards which specify that a certain amount of the renewable energy generated within that state must come from solar.   Whether residential, commercial, or institutional, each time a solar system generates 1 Megawatt hour of energy – the solar system owner generates 1 SREC.  This SREC is then sold via aggregators to an  SREC market where it is bought by Power Companies to allow them to meet their share of the compliance obligation, or else pay a legislated fine (Alternative Compliance Payment, or ACP) for every SREC they are short.  Washington DC currently generates the highest SREC values in the country largely due to the fact that the District does not have the real estate to install large solar farms which can oversupply the market and drive down SREC prices.

How Much is an SREC worth?

The value of an SREC in a particular market is dynamic due to two primary factors

1. by design, SRECs values are intended  to decline over time.  The legislated ACP which serves as a ceiling to the SREC price is usually scheduled to decline in future years. Among other factors, increased installations should lead to decreased system costs and less need for SRECs to help finance a solar system.
2. The other reason for variations is due to market mechanisms.  Brokers buy and sell SRECs in order to help make a market for them.  When the market is undersupplied, SRECs trade high, at a price close to the penalty (ACP).  This is good for those selling SRECs.  If the market is oversupplied (like Maryland is currently), then SREC prices in that market will decline well below the penalty – not so good for those selling SRECs. Varying SREC payment options are intended to allow system owners to buy down their SREC price risk. The difference between an Upfront Payment option and a Brokerage Payment option (market price) can be many thousands of dollars to a solar system owner.  In an undersupplied market like DC, where there is very little price risk for SRECs, that upfront payment option leaves a lot of money on the table.

How many SRECs will my system generate?

The number of SRECs any given system will generate depends upon the output of your system.  For example, an optimized (as in good and sunny) 5.0 kW system in Washington DC would generate close to 6.0 SRECs/year.

How and When would I receive my SREC income?

SRECs are most commonly sold through an SREC aggregator/broker such as Washington DC-based SolSystems.  However, SRECs here in the District are so valuable – as well as stable – that solar panel contractors are also offering to buy your SRECs and simply deduct the upfront payment off the cost of your solar installation.  So THIS is the heart of this article:  Solar owners have 3 choices for how to get paid for their SRECs:

1. Upfront Payment (all SRECs are forfeited for a 5yr or 15yr period)
2. 3yr, 7yr or 10yr Annuity Contract (SREC prices Locked-in for a specific term)
3. Brokerage (Current market price less broker commission).

Sticking with the aforementioned 5kW system example, the following table illustrates projected SREC values for the system, using current SREC prices (November 2016) offered by a competitive SREC aggregator).

System Size = 5kW                            SREC per Year = 6

So, reviewing the column above, this Washington DC Homeowner with a 5.0kW system has these financial options to choose from:

$$$$$:  Brokerage = $32,101.85 over 25yr life of systems (as warrantied)

$$$:  *Annuity =  $18,690 guaranteed then sign-up for another annuity or go Brokerage

$:  Upfront = $8025.60  SRECs cannot be sold again until 2032.

*Annuity is also available in 3 or 5 yr increments, as well as the 10yr

The Brokerage price is exponentially higher than the other prices, does that mean there’s a lot of risk?

Some risk – yes, because you’re not locked-in to a static price.   But remember – historically DC SREC pricing has remained stable (the geography does not accommodate  huge solar farms that can flood the DC SREC market).  You can receive an email monthly that allows you to check on current pricing AND should the price start to decline – you can, at any point in time, switch to an Annuity.  .

If I choose the 10yr Annuity Option and lock-in my SREC pricing, what happens at the end of that time period?

You simply choose another payment option being offered at the time of contract experation.  Maybe you’ll opt for brokerage – or another annuity, up to you.  Same with the Upfront Payment, after 15 years.

How do I receive my SREC income?

Via check from the SREC aggregator which most pay quarterly (except with the Upfront Payment option which would be one-time).   This generally starts around two months after your system has been interconnected by your Utility and the SREC contract set-up.   We do advise that the contractual SREC relationship be kept between a professional broker/aggregator and the solar system owner.  Third parties, such as the solar panel installation company, may find themselves in a conflict of interest.

If the solar system installer is not buying my SRECs, who sets up the contract?

Most reputable solar panel installation companies will coordinate the initial set-up of your SREC contract with an SREC aggregator, as they have immediate access to the documents required for the initial set-up (Passed Building Permit, Interconnection Approval etc.).  Many installers have one or two aggregators they’re used to dealing with – or you may choose your own.

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The Design

When planning a solar panel system for your home, the first consideration for any solar designer is the tilt and orientation of your roof areas.  We need to know which roof(s) will ensure the most optimum solar output – which translates to the best Return on Investment.   For us here in Maryland, the most optimum solar roof orientation is Due South at 180 degrees.  Of course, not everyone has this perfectly oriented roof and our customer base consists of homes that have South, West, East and everything-in-between orientations.  Occasionally we even install on North-facing roofs if the pitch of the roof is low enough that panels are close to flat, or can be tilted southerly.

For homes that face East-West, you may be wondering which roof would best suited for solar.  This is a good question given the fact that the output of your solar panels is directly related to your Return on Investment and how quickly the panels can pay for themselves.

If either East or West favors a more Southerly angle, then that would likely be a more favorable roof.  Assuming that there aren’t issues related to shadingor obstructions caused by chimneys, vents, skylights and other roof-placed items.

If the house has a perfectly split East-West orientation, with all things equal – the next consideration would be roof angle; the lower the tilt (i.e. closer to horizontal) – the more solar energy will be generated over the course of the day.  If the tilt on either side is the same then we would usually favor the West facing side.   Here in Maryland, DC and Virginia we tend to have cloudier mornings, and sunnier afternoons going into dusk.  Therefore we want to capture the late afternoon sun (west facing) more than early morning sun (East facing).  Of course, should you happen to have a tree, chimney or other obstructing factor(s) on the West roof – we’d favor the East.

The Economics

Homeowners looking at an East-West installation often have concerns as to whether or not their system will be profitable enough, compared to its south-facing counterparts.    Disqualifiers for cost-effective solar systems include shading and limited available roof space.  Rarely, however, is a home found unsuitable due to a Non-Southerly facing roof alone.

To illustrate, following is a comparison of a 10kW system’s output respective to East, West and South facing orientations.  Data compiled using the National Renewable Energy Laboratory (NREL) weather data patterns for Baltimore, MD –

10kW system installed on a 20 degree pitched roof with zero shade

	SOUTH (180 degrees)	WEST (270 degrees)	EAST (90 degrees)
ANNUAL OUTPUT	13,224kWh	11,389kWh	11,328 kWh
*Annual $avings	$1853 per year	$1594 per year	$1586

*Savings based on a conservative $3.00/watt installation, and $0.14/watt BGE rate

Data from PV WATTS

As illustrated, although perfectly South would be ideal, the East and West orientations provide a competitive amount of solar and would add only a few months to the payback period.  If you were choosing between East and West (as opposed to installing on both), the difference is nominal.  The choice of which roof may come down to aesthetic preference, distance to utility meter and regional weather patterns.

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Ways in which solar panel arrays can affix to a commercial building are as many and varied as the buildings they serve.  In this article, we’re focusing on one popular method of attachment – the Ballasted roof mounted system.

Many commercial solar prospects in and around the Maryland/Washington DC area have buildings with flat or low-sloped roofs.  These are generally defined as a roof with a 3:12 pitch or less.  For these applications, ballasted systems can offer a way of attaching solar arrays without any (or few) roof penetrations.   Many building-owners prefer this method of attachment as it negates the risk of leaking, particularly on flat roofs that may collect water.  With a ballasted system, the arrays are held down using the weight of the existing solar panel arrays, racking and – most importantly – concrete blocks.  These blocks are placed methodically throughout the system design to secure the arrays in place, resisting wind loads or other types of disturbance.

The addition of the ballast blocks to the solar system arrays adds additional weight to the roof.   As with any commercial solar project, this weight load is analyzed and approved by a licensed structural engineer as required by the permitting jurisdiction – with some differences in each locale.   Ballast racking manufacturers also specify the amount of blocks required throughout a design.  The number of blocks per panel typically varies throughout design due to array proximity to building edges, parapets, or other inconsistencies that can affect wind and snow loads.

Although ballasted systems have many advantages, as with any design, they have their disadvantages and are not compatible with every type of commercial building.   Let’s look at a generalized comparison scenario between a roof penetrated system and a Ballasted System:

	Roof Penetrated System	Ballasted System
Labor Costs and Criteria	HIGH:  Penetrations require flashing and sealing techniques – sometimes requiring coordination with a roofer.	LOW.   Labor skills required for installation are fairly straight-forward and require no roofer coordination.
Panel Count	INCREASED:  Systems attached to roof substructure require less roof space for mounting.	DECREASED:  Ballast-blocks require roof space and can limit the available space for solar panels
Roof Loading	DECREASED.  No concrete/ballast block	INCREASED:  Ballast blocks add weight to the roof
Design Criteria	FLEXIBLE:  Attached racking systems can usually negotiate hatches, HVAC equipment	LESS FLEXIBLE:  Because of the increased space required per panel – designs may be more rigid.  However most ballast racking does have reasonable flexibility.
Roof Pitch	5 – 45 degrees	Generally less than 10 degrees

 

Multi-roofed commercial applications may have a variety of racking types for both sloped and pitched roofs. There are other options for flat roofs also, including attached and hybrid solutions that use a combination of both penetrated and non-penetrated techniques.

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SOLAR OPEN HO– USE with Kirk Cummings

WHEN:  Sat, Sept 17^th 2016   |   2pm – 5pm

WHERE:  4919 Windpower Way, Ellicott City  MD  21403

Nothing says Sunshine’s a Wastin! like a freshly installed solar power system.  Join Kirk at this Howard County residence to get up-close-and-personal with an active solar system.  The homeowner will be on hand to answer questions about their decision-making process as well as working with SES.

Kirk will be on hand to tour the system with you and answer all of your questions onsite at the home of the Syed Family where Kirk designed and SES recently installed an 8.55k Solar power system including(30) Suniva 285 watt Solar panels and a Solar Edge Inverter System.

Solar Open House – $250 Discount!

All open house attendees who sign up for a proposal and sign their contract within 30 days will receive a $250 discount on their PV system installation.[/vc_column_text][/vc_column][/vc_row]

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Press Statement
6-15-15

CBF Merrill Center to Install 106 kW Solar System

(ANNAPOLIS, MD) The Chesapeake Bay Foundation (CBF) and Solar Energy Services, Inc. (SES) announced an agreement today for SES to design and build a 106 kW, grid-tied solar photovoltaic system at the Philip Merrill Environmental Center, CBF’s headquarters.

The Merrill Center rooftop solar system will include more than 370 solar panels from US manufacturer SolarWorld, as well as inverter systems from Solar Edge. The panels will be installed primarily on the available roof tops, but the design also calls for some unique solar shade structures to provide additional benefits to the facility and its occupants.

SES president Rick Peters shared that SES is pleased to participate in this marquee project. “I know personally that CBF has led the way on sustainable initiatives in our region for a very long time. It is an honor to be selected to construct this project, which will help advance CBF’s message and their environmental stewardship.”

The solar system is projected to produce more than 133 MWh of electricity annually, enough to power more than 10 average Maryland homes. This will significantly offset the facility’s consumption of traditional electricity.

“While we have had solar panels at the Merrill Center in the past, we are adding this new capacity because it is now more affordable as well as more efficient,” said CBF Vice President Mary Tod Winchester. “The new array will generate enough electricity to provide one third of the power for heating, cooling, and other needs of the more than 100 staff who work here. As a non-profit, we will not benefit from the many tax incentives available, but we encourage other individuals and businesses to closely examine the costs and benefits of adding solar generation.”

The project is expected to be completed before the end of this summer.

About Solar Energy Services, Inc.

Solar Energy Services, Inc. (solarsaves.net) designs, builds and services solar power systems for institutional, commercial, and residential customers. The firm was founded by 37 year solar industry veteran Roger Perry who has longstanding ties to the communities served by SES. Based in Millersville Maryland, the 21 person firm operates in Maryland, DC, and Virginia.

About Chesapeake Bay Foundation

Founded in 1967, the Chesapeake Bay Foundation (www.cbf.org) is the largest independent conservation organization dedicated solely to saving the Bay. Serving as a watchdog, we fight for effective, science-based solutions to the pollution degrading the Chesapeake Bay and its rivers and streams. Our motto, “Save the Bay,” is a regional rallying cry for pollution reduction throughout the Chesapeake’s six-state, 64,000-square-mile watershed, which is home to more than 17 million people and 3,000 species of plants and animals.With offices in Maryland, Virginia, Pennsylvania and the District of Columbia and 15 field centers, CBF leads the way in restoring the Bay and its rivers and streams. Over the last four decades, we have created broad understanding of the Bay’s poor health, engaged public leaders in making commitments to restore the Chesapeake, and fought successfully to create a new approach to cleanup that features real accountability-the Chesapeake Clean Water Blueprint

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Some Positive Trends:

• System prices continue to drop
• Maryland meeting its solar energy goals
• Maryland Solar Industry exceeding 2200 jobs

The Challenges:

Industry consolidation can be disruptive

Residential solar leasing is fast outpacing cash sales in many of the more developed states, like Maryland. It’s what many Americans want so it will continue to drive the market. It seems to work for more of America.   After all, we do like instant gratification and if I can save $10/month immediately, and feel good about it, where do I sign? While SES is typically strongly advocates for cash sales to our customers who are able, no one can argue the enormous impact and value that the various residential and commercial financing options have delivered. Getting solar access to the mainstream will be the most critical piece to advancing the development of distributed solar. It really has been transformational so far.

There’s other good news. System Pricing, though leveling off somewhat, has dropped dramatically in the past 5 years. While incentives decline as planned, the industry continues to drive down installation costs to maintain the impressive paybacks and internal rates of return.

Beneficiaries of solar price reductions include states like Maryland, who had the foresight to seed this industry over the last 6 years. Government and industry partnership in Maryland has built an economic environment that supports solar development and as a result, it is sustaining 2200 jobs while Maryland continues to meet its solar RPS goals. That’s right, our industry delivers over 2200 paychecks in Maryland. In fact, there is now a solar thermal equipment manufacturer in Baltimore. Much to be pleased about.

There’s also a darker side. Bankruptcies and consolidation of solar companies have carried the headlines quite a bit in the last year especially. While a natural part of the tech/business evolution cycle, consolidation and shake out are always disruptive, not only to industry members, but also to consumers of these solar energy products and services. As a result, all of the solar “investors” are asking lots more good questions – particularly about the longevity of the manufacturer and the installer. Popular questions, particularly in the solar PV panel world, are “Who will be here to support my warranty?” and “What is the design track record of these systems?”

The beneficiaries of these trends will be those with a proven commitment to the industry either through time or capital. It’s that commitment that gives customers confidence of future support if and when it is needed. Whether it’s an installer with 35 years experience or a manufacturer like SunPower that has 25 years in business, longevity is a key indicator of future availability to support the install base.

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FREDERICK, MD: Today SES was informed by the Frederick County’s Solarize Committee that they were chosen to be the official Solar Water Heater installer for the Solarize Frederick County initiative.

The pilot program aims to increase installations of solar water heaters, as well as solar electric (PV), systems in Frederick County County.  The financial incentives include County grants and volume purchase agreements, in addition to pre-existing state and federal grants.  Astrum Solar were selected as the solar electric (PV) installer.

While funds last, all Frederick County residents are eligible to apply for the incentives that reduce the cost of a solar water heater (or solar electric PV system) by up to 85%.

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Many of our prospective customers have been waiting to buy their panels in the hopes of significant advancement. “I want the technology to mature ” they say, “ and be state-of-the-art”. Well, the closest you can get to those standards with a production panel is with SunPower.

Ask around, do some Google searches. You’ll learn quickly that SunPower is considered the best with very little debate. In fact, it’s by far the best. This American born company launched out of the US university research system (the founder was a Stanford professor) has sustained a 23 year run to be acquired recently by a global energy company.

At Solar Energy Services we’re excited to report that we are now a SunPower certified dealer. We’ve always wanted to offer the very best PV product and now we can. SES is proud to tie our 35 year commitment to the industry to the world leader in solar panel manufacturing.

Many are aware that the cost efficiency of installed solar has improved dramatically in the last 5 years due to efficiencies gained through price competition, distribution improvements, development of installation techniques, and other process improvements. However, the physical efficiency of solar cells has advanced more slowly than most have hoped. The standard Chinese panel being installed by the majority of installers today (especially the large leasing firms) are in the 14-15% efficiency range. A few solar manufacturers have been able to stay notably ahead of the pack. SunPower remains out front with their standard 327 W panel (E20) at 20% efficieny. Sunpower’s new “X” (E21) is 21% efficient! That’s right, over 40% more efficient than the average panel out there. The X begins to ship in April 2013 – next month.

SunPower’s Maxeon cells are the industry leader in reliability and durability also. They’ve had only180 defects out of 7 million panels. That’s right, 1 in 39000! The Maxeon cell has redundancy in contacts, accommodating wear from thermal expansion. It has backside contacts that provide increases collection on the sunny side. They are highly durable with the best impact resistance ratings. They are backed by a solid company with great support and a bright future.

To recap, the physical efficiency of solar cells has been relatively stagnant, with the exception of a few leaders that have developed slow and steady progress. SunPower has led the way. The company has been around for over 23 years. They have the most durable solar cell in the industry and the highest performing. I must confess, the 3 year old solar PV system on my roof has panels made in China. If I were installing today, there is no doubt I’d choose SunPower…

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[vc_row][vc_column][vc_column_text]Many of our prospective customers have been waiting to buy their panels in the hopes of significant advancement. “I want the technology to mature ” they say, “ and be state-of-the-art”. Well, the closest you can get to those standards with a production panel is with SunPower.

Ask around, do some Google searches. You’ll learn quickly that SunPower is considered the best with very little debate. In fact, it’s by far the best. This American born company launched out of the US university research system (the founder was a Stanford professor) has sustained a 23 year run to be acquired recently by a global energy company.

At Solar Energy Services we’re excited to report that we are now a SunPower certified dealer. We’ve always wanted to offer the very best PV product and now we can. SES is proud to tie our 35 year commitment to the industry to the world leader in solar panel manufacturing.

Many are aware that the cost efficiency of installed solar has improved dramatically in the last 5 years due to efficiencies gained through price competition, distribution improvements, development of installation techniques, and other process improvements. However, the physical efficiency of solar cells has advanced more slowly than most have hoped. The standard Chinese panel being installed by the majority of installers today (especially the large leasing firms) are in the 14-15% efficiency range. A few solar manufacturers have been able to stay notably ahead of the pack. SunPower remains out front with their standard 327 W panel (E20) at 20% efficieny. Sunpower’s new “X” (E21) is 21% efficient! That’s right, over 40% more efficient than the average panel out there. The X begins to ship in April 2013 – next month.

SunPower’s Maxeon cells are the industry leader in reliability and durability also. They’ve had only180 defects out of 7 million panels. That’s right, 1 in 39000! The Maxeon cell has redundancy in contacts, accommodating wear from thermal expansion. It has backside contacts that provide increases collection on the sunny side. They are highly durable with the best impact resistance ratings. They are backed by a solid company with great support and a bright future.

To recap, the physical efficiency of solar cells has been relatively stagnant, with the exception of a few leaders that have developed slow and steady progress. SunPower has led the way. The company has been around for over 23 years. They have the most durable solar cell in the industry and the highest performing. I must confess, the 3 year old solar PV system on my roof has panels made in China. If I were installing today, there is no doubt I’d choose SunPower…

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Not quite so cut and dry…

Most of us who live here in Anne Arundel County appreciate our proximity to the Chesapeake Bay, changing seasons with spectacular Spring and Fall temperatures, and mature wooded areas. However, these pros quickly become cons during snowstorms, thunderstorms and Maryland’s annual hurricane season from late August through October when Hurricanes such as the infamous Isabelle and Sandy blast through our wooded, watery region, bringing floods, downed trees and – the clincher – power outages. If not for the threat of the power outage, we may sit back and enjoy a hurricane as a powerful force of nature, so long as our lights are on, heat or ac is blasting, and refrigerator’s chilling.

Hurricane Sandy caused around 300 thousand power outages here in Maryland, with an estimated 60 thousand in Anne Arundel County alone. It’s a no wonder that many prospective solar system owners – as well as existing solar system owners – want to know if a solar power system can power any of their appliances during a power outage, even if only while the sun shines. Unfortunately, it’s not that simple.

For both functional and safety reasons, there are several additional complexities to a “hybrid” PV system that connects to the grid but also provides backup power during a power outage. To start, during an outage you need to be able to safely isolate your “solar generator” from the grid to protect the line workers. You will also need energy storage (batteries) to balance solar energy supply and household demand. In most cases, you need an additional inverter to convert the batteries’ DC electricity back to AC electricity for your household. Lastly, most battery systems require some level of maintenance as well as replacement one or more times in the lifetime of the solar system. The bottom line is that unless you are willing to pay a nominal 30% premium for a solar system that includes the necessary batteries, transfer switches and additional inverter(s), you might be better served with a more traditional approach to backup power, like a gasoline or natural gas generator, and possibly just for critical loads.

Don’t get me wrong. Hybrid systems are growing in numbers and technology advancements, consumer demand, and smart grid capabilities all will help to drive down costs to make these systems more affordable in the future, ideally making our grid more stable with many distributed sources of energy. In the mean time, most solar installers can offer a hybrid (battery backup) or traditional generator back up options, so you can decide what suits you best.

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