Solar Solutions

A solar PPA is a financing option available to homeowners or businesses who want to use solar energy at their property.

Basically, the solar PPA (Power Purchase Agreement) allows you to lock in your energy rate for the term of the financial agreement. This rate is typically lower than what the utility company would charge you, which could result in a significant savings over the term of the PPA.

How a Solar PPA Works

There are three main parties involved in a solar PPA: the customer, the solar installation company and the investor, or solar system owner. Here’s how it works in Orange County and Los Angeles:

Note, the customer only pays for the solar energy used to power their property; there are no payments if the system fails and the customer would instead pay the utility company at a presumably higher rate.

Why Consumers Choose a Solar PPA

Most people choose to finance their solar project with a solar PPA because of the following four benefits:

We’d like to point out that solar electric systems do not usually need maintenance since they are a sturdy technology with no moving parts. The benefit of free maintenance and servicing is more about peace of mind than actually saving on the cost to maintain your solar panels.

It’s also worth mentioning that one major downside of a solar PPA is that you won’t be eligible for any state/local rebates or the 30% Federal tax incentive. Since the investor is the technical owner of the solar panels, they are the ones who take advantage of these discounts.

How a Solar Lease Differs from a Solar PPA

Often, people confuse a solar lease with a solar PPA since they are very similar and share many of the same benefits.

A solar lease allows you to rent the solar panels themselves (and therefore, the energy they produce as well), usually with a fixed or predictable monthly payment. Read more about the specifics of  getting a solar lease in LA or Orange County in our prior blog post if you care to learn more.

On the other hand, a solar PPA allows you to pay for the energy produced by the solar panels, which is hopefully pegged to the present and future utility cost. If the cost for your solar energy is lower than the electricity the utility would have provided, you will be saving money. But if the cost of conventional electricity stabilizes or decreases, you may end up paying more in the future.

Depending on your financial situation and energy usage, a PPA may be the best way to finance your solar project. This educational article should shed some light on how a PPA works and how it could benefit a solar panel owner.

Frequently people want to know how many solar panels they will need based on the size of their home. However, the amount of electricity you use is more important for solar electric system design than the square footage of your home. This is mainly because people’s use of electricity varies in so many different ways.

Same House, Different Energy Situations

For instance, let’s say two families live next door to each other in 2,000 square foot homes. A young man lives in Home A with his fiancé; they both work long hours and often spend evenings out with friends. As a result, they don’t use much electricity and pay about $40 a month.

In Home B, two parents live with their two teenage children. They are either running the heater or air conditioner and use electricity to filter their pool, meanwhile the teenagers are always on their iPads, opening the refrigerator or watching TV. Since more people live in the house and their lifestyle requires more energy, their electricity bills run at about $325 a month.

Importance of Electricity Usage for Solar Panel Design

Even though they live in homes that are the exact same size, the family in Home B would most likely need to invest in more solar panels to bring down their electricity usage than the couple living in Home A.  Even if the households were identical in electric consumption, one home may have better solar exposure or less shade than another, which can mean more or fewer panels.

Electricity usage is also important because most utility companies in Los Angeles and Orange County limit the size of your solar system based on the amount of energy you currently use. This number is usually determined by looking at how much electricity you have used in the last 12 months.

Just Moved or Building Your Home? Here’s How it Works

Of course, there are always some exceptions to the rule. If you have only lived in your home for a few months or want to install solar panels on a home in construction, then most utility companies let us estimate usage based on your home’s square footage.

As an example, LADWP calculates this type of average at 2 watts for every square foot. So, a 2,000 square foot home would be allowed a solar array of 4,000 watts.  Depending on the type of panel that you choose, a system of this size would be anywhere from 12-18 solar panels.  Keep in mind, this formula to estimate consumption varies depending on who provides your electricity.

Another exception is sometimes made for people who are anticipating that their electricity usage will go up. If you are planning to buy an EV (electric vehicle) or install central air, for example, we can estimate the additional usage and factor it into the solar panel design and cost. But, the utilities are sticklers! They will make us submit proof of purchase along with the solar system application.

Find out How Much Solar Panels Cost

Interested in how many solar panels you will need for your roof and energy situation? Call us at (888) 595-9570 or email gosolar@th2.e81.myftpupload.com, and have your electricity bills handy. We can typically provide a rough estimate based on your usage and a quick glance at your home on Google Earth. For those who would like a more specific price, we can schedule a solar evaluation where we meet at your home and evaluate your roof in person.

For years, those against the widespread adoption of solar power for homes have argued that solar photovoltaic (PV) panels are too expensive for the majority of homeowners.  They claim that the only families who can take advantage of the cost savings from solar energy are those with high incomes.

Not so, says the Center for American Progress (CAP), a think tank based in Washington, D.C. By analyzing data about solar electric system installations across the country, they found that in many areas, including California, the distribution of rooftop PV mirrored the population in terms of income distribution.

Relying on Solar Data from Reputable Sources

The study used information from three principal sources:

The study evaluated the median household income of each zip code where solar panel systems were installed and compared the distribution of the installations to the way income is spread over the population. They found that there was a significant overlap between the two.

In other words, those communities that make up the largest portion of the state’s population, the middle class, accounted for the largest percentage of PV installations.

Solar Panel Facts and California’s Middle Class

In California specifically, the think tank found that 67.16 percent of the systems installed under the program were within communities with median household incomes between $40,000 and $90,000. Communities exceeding $90,000 in median household income accounted for only 28.63 percent of the installations, while areas with median incomes under $40,000 made up about 4 percent of those receiving rebates under CSI.

Similar results were found in Arizona and New Jersey.

CAP also determined that the percentage of solar panel installations for middle class households under the California rebate program has grown from 65 percent of installations in 2009 to 70 percent in 2013.

Solar Energy Benefits All Communities

Solar energy provides benefits for customers on both a micro and macro scale. Of course, individual families and businesses can enjoy lower electricity costs by switching to solar power. On a greater scale, the advantages of solar power can benefit our communities as a whole with improved air quality, local job growth and lowered carbon emissions.

However, this will only be realized when as many people as possible invest in solar panels for their rooftops. As solar power becomes even more accessible to the middle and lower classes, achieving these economic and environmental goals will become more of a reality.

Orange County and Los Angeles solar energy shouldn’t simply be a luxury that only high-income Californians can afford. In order for renewable energy to make a significant impact on the state economy and greenhouse gas emissions, it needs to be accessible to the majority of residents.

Due to the fact that solar panel prices have come down so steeply in the last decade, as well as federal, state and local government incentives, more families have been able to switch to solar and save on their electricity bills.

Solar Energy is Accessible to All in California

Low-income earners still struggle to gain access to this technology. That is why Governor Jerry Brown recently signed Assembly Bill 217 (AB 217). This law directs the California Public Utilities Commission to extend two measures that have been crucial to providing low-income families with the opportunity to adopt solar energy solutions for their homes and apartments.

Those two measures consist of the Single-family Affordable Solar Homes (SASH) and Multifamily Affordable Solar Homes (MASH) programs. Managed by nonprofit Grid Alternatives, the goal of each program was to set aside funding from the California Solar Initiative (CSI) funding to be used for low-income families.

In total, these communities would receive $108 million in rebates for the purchase of solar panel systems, facilitating the installation of 50 megawatts of solar generating capacity.

Solar Programs for Low-Income Residents Extended

The initial time frame for the SASH and MASH programs was set to expire on December 31, 2016, at which point funding would no longer be distributed. AB 217 extends that date by five years to 2021.

Additionally, the law makes provisions to provide job training and education for low-income workers who would like to pursue a career in the solar installation field.

How Solar Benefits Californian Communities

The benefits of a solar electric system for low-income families are clear, as these citizens have the most to gain from saving money on energy consumption. By deriving their energy needs from sunlight and selling excess power back to the grid, they’ll be able to effectively run their meter backwards while also claiming federal and state tax credits and rebates, including the California Solar Initiative incentives described above.

It should also be noted that low-income communities are often disproportionately affected by the public health issues that arise from burning fossil fuels to produce electricity. Los Angeles and Orange County solar are the best ways to mitigate and eventually eliminate such externalities.