Re-posted from New York Times 5/11/12
As I report in The Times, legions of companies will offer to install a system at no upfront cost and promise customers cheaper, cleaner electricity over the course of 20 years. Some are small and local, while others, including SolarCity, Sunrun, Sungevity and SunEdison, are larger, with national or even international reach. Some large manufacturers, like SolarWorld, even offer financing plans for home installations.
For residential customers, the deals can seem attractive. The company arranging the financing for the system usually owns and operates it, selling the electricity back at a rate generally lower than what the utility would charge. Depending on the company and the state, the details vary. In some cases a customer pays a preset rate for the electricity used, known as a power purchase agreement. In others, the customer leases a system, paying a set monthly charge for a guaranteed amount of power.
Part of the appeal here is that customers can not only reduce their energy costs but fix them for a long period of time, avoiding the unwelcome surprise of a suddenly high bill because, say, natural gas prices have shot up again. Customers also avoid having to figure out how to claim the various incentives and benefits for which they qualify as a renewable energy producer.
But there are some things to look out for. Going solar does not mean going off the grid. A typical roof array will not handle all of a home’s electricity needs since it produces power intermittently. So customers will still get a bill from the utility, though probably a much smaller one. Many contracts also have escalator clauses, with the payments increasing over time, so it is important to determine if your energy costs are likely to go up or down if you were to stick solely with the utility.
The Department of Energy has an online guide for those considering residential solar and wind power, as do many of the companies offering installation. Some cities, including New York, San Francisco, Boston and Madison, Wis., have online solar maps where residents can estimate the solar capacity of their roofs.
Click here for additional information: Assessing Whether Solar Panels