A major roadblock to environmentally-friendly home improvement projects is the elevated cost. While you might envision a solar paneled roof on your home, the $30,000 price tag may have you reeling. After the initial sticker shock, maintenance and parts replacement can add thousands onto the annual bill. Government incentives, tax credits and other systems have been set up to assuage the cost of green energy installation, but they require a great deal of time and effort, with often frustrating results.
So how is the average person supposed to make responsible choices in the face of high cost and bureaucratic frustration? Enter the Power-purchase agreement (PPA) business model. A PPA company buys solar equipment in bulk at minimal cost. Instead of turning and selling that equipment for a retail price, they lease it to home or business owners. For a more realistic fee (say $6,000 or so), the company will install one of their solar panel systems onto your roof and they will maintain and repair it. Think of it as a really expensive satellite TV dish. With the home owner’s energy accounted for, there is no monthly energy charge.
Private citizens are not the only ones getting on the PPA bandwagon. When Wal-mart announced last year that it would be converting to 100% renewable energy, management hired the PPA firm SunEdison to start installing solar panels on 21 California and Hawaii locations. By hiring outside solar panel managers, Wal-mart’s management team avoided the structural complications of adding solar panel management to its staff. Additionally, the SunEdison was able to get the solar panels up and running in a faster, more efficient time frame than would have otherwise been possible.
PPA businesses have a third market, which is municipal government. Officials in several U.S. cities are considering measures to implement a large-scale solar panel purchase and installation. The cost for these panels would fall to those purchasing homes, just as other essential service costs do.
Reducing costs and facilitating action are two very important aspects of supporting people and businesses to act responsibly. The PPA system – while still in its early stages – is promising towards that end.