Written by Lisa Walsh

First Community Solar Project in Washington DC

PRESS RELEASE

For Immediate Release

Tuesday, January 10th 2017

 

Father/Daughter Team Up for DC’s First Community Solar Project

WASHINGTON DC:  January 10th, 2017.  DC Resident Rebecca Mann and her father Neal Mann are poised to be the FIRST two PEPCO customers to take advantage of Washington DC’s newly revised and adopted Community Renewable Energy Facilities of 2016 (CREF).  After a process lasting three years, the District has finally worked out all of the kinks that enable D.C. residents to benefit from solar, even if they can’t put panels on their own roof.  Community solar offers the benefit of solar to community members (subscribers) who can’t, or prefer not to, install solar panels on their homes. This also gives renters an option to purchase solar power.

For the flagship project, Rebecca Mann is unable to install a solar power system due to limited roof space and shading constraints.  Located one mile away – her father, Neal Mann, is currently having a 16.24kW grid-tied solar power system installed.  This will generate enough power to offset a good portion of both his own, as well as his subscribing daughter’s, PEPCO utility bill —  at full retail price.

The project is currently under construction and is poised to be interconnected and officially net-metered by the end of January 2017.

Solar Energy Services, Inc. is one of the region’s longest running solar installation companies.  Founder Roger Perry has been in the solar energy industry for over 35 years.  His partner, Rick Peters, is a current Board member and past President of MDV-SEIA.  Locally owned and operated, SES installs both residential and commercial solar PV (electric), as well as solar thermal (hot water) systems in Washington DC, Maryland and Virginia.

Useful Links

PEPCO’s Green Power Connection and CREF

History of Washington DC’s Community Solar

For further information, contact:

Lisa Walsh 

Solar Energy Services, Inc. 

410-923-6090 X304

443-253-6941 Direct

Lwalsh@solarsaves.net

Washington DC Solar, solar renewable Energy,
Written by Lisa Walsh

Washington DC Solar Owners and Selling Solar RECs Upfront

Solar Service ,Home Solar Panels

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.

Residential Solar Panels, Solar Service
Written by Lisa Walsh

Fannie-Mae Agrees: Solar is a MUST-DO for Homeowners

Fannie Mae Agrees:  Solar is a MUST-DO for homeowners

Solar Service, Home Solar PanelsJust last month, Mortgage Giant Fannie Mae announced their new mortgage option that allows solar energy projects to be rolled into the final mortgage amount.  Namely, the HomeStyle Energy Program is hot news for solar fans who use a Fannie Mae-approved lender for their mortgage; whether considering a first-time solar system purchase, or currently financing an existing solar system with an equity line of credit or unsecured loan.

Typical Solar Financing and Solar Energy

It’s no secret that solar energy system installations in Maryland and Washington DC have taken off like gangbusters.  In previous years, many Maryland homeowners were choosing to lease/rent solar panels in an effort to avoid upfront costs.  However, when compared with an outright solar purchase – a 20yr (or similar) solar lease proves to be quite expensive – as with most rental agreements.    Depending on whether the solar shopper lives in Washington DC or Maryland, the financial incentives (tax credits/SRECs) usually pay for between 40 – 80% of the system cost.  100% of this upfront solar cost needs to be sourced by the homeowner who usually use a financing vehicle such as an Equity Line of Credit or some sort of Unsecured Loan.

Fannie Mae’s Game-Changer…

As of June 2016, Fannie Mae borrowers have access to a new Energy Loan that allows them to simply add the cost of their solar system to their existing mortgage.  Here’s what makes this form of financing a game-changer:

  • Super-Low APR:  HomeStyle Energy can be used for new projects or to take higher-interest unsecured loans/lines of credit and refinance them or roll them into a potentially lower-cost mortgage.   In all likelihood this will result in unprecedented low financing costs for solar energy.
  • All Costs Covered:  Most financing vehicles have a non-negotiable cap on the loan amount, forcing some Homeowners to come up with a down payment.  With this program, lenders can finance up to 15% of the final property value.  For example, a typical single-family home located in Annapolis, MD may appraise for $350,000.  The available amount for the solar system on this Annapolis home would be $52,500.  In most cases, this amount would far exceed the amount of capital needed to complete the project, considering that most solar projects fall in the $24,000 – $34,000 range (before government incentives).
  • Peace of Mind:  The improvements also have to come with an energy report, whether a Home Energy Score Report or a Home Energy Rating Systems report, and must specify the monthly savings to the borrower.   Homeowners can rest assured that their mortgager fully supports the home improvement investment.

Does Every Home Qualify?

At this point in time, only Fannie-Mae  homebuyers or refinancers qualify.  The program does not extend to new construction or manufactured housing.  The following are eligible to apply:

  • New homebuyers
  • Existing mortgage holders looking to refinance their new solar system
  • Existing mortgage holders looking to refinance their existing financed solar system

All applicants have 180 days from close of mortgage note to complete the solar installation.  Bear in mind that refinancing homeowners may incur closing/additional fees in the transaction.

Contact your mortgage representative to see if the HomeEnergy Program is right for you.

solar panels. Solar energy
Written by Lisa Walsh

SES Project Featured on ABC News Affiliate Channel 8

Crosstown Properties, LLC – Multifamily Solar Water Heating (Completed July 2010) – Washington DC

home painters, interior paintingSES was engaged by a third party solar project developer to install a 32 panel (1280 SF) solar water heating system for an occupied apartment building in Washington D.C. The system included the installation and integration of 1600 gallons of additional solar storage in non-pressurized tanks. The system is designed to offset approximately 70% of the water heating load for this 45 unit apartment building. The solar developer provided all of the capital to install the system at no cost to the building owner. The building owner receives clean energy at a discount to their traditional natural gas, achieving a monthly savings immediately upon commissioning of the system.

Written by admin

DC Apartment Building to Install Solar

WASHINGTON, DC:  Solar Energy Services, Inc. has engaged by Skyline Innovations, Inc., a third- party solar project developer, to install a solar water heating system at Porter Street Apartments to add an additional 360 gallons of hot water to the building’s current capacity.

The eight 4′ x 8′ flat plate thermal panels will transfer heat to three 120 gallon Vaughn Solar Sepco tanks plumbed in parallel to feed solar heated water to the building’s existing gas water heater.