Arizona Public Service Co. is introducing a new loan program that would
allow customers to install solar panels on their houses at virtually no
up-front charge.
It could be a good deal for some customers, and it could help the utility,
as well.
The loans are designed to help customers begin making their own electricity
without shouldering the big expenses for installation, which have put off many
potential buyers.
Because the systems will mean lower monthly electric bills, they can
actually be bought for less than what some people pay for power now.
APS has had a tough time persuading customers to install solar panels on
their roofs or wind turbines in their yards. It needs that renewable power to
meet its state-mandated goals.
"What we have put together is a kind of one-stop shopping opportunity
for customers to install solar systems with no out-of-pocket expenses,"
said Eran Mahrer, leader of renewable planning for APS.
The GEOSmart loan program will allow APS customers to get loans for as much
as $50,000 with interest rates as low as 7.99 percent through the
Sacramento-based non-profit Electric and Gas Industries Association.
GE Money, a subsidiary of General Electric Capital Corp., will finance the
loans, which do not require a home lien.
The EGIA promotes household energy efficiency and alternative energy and has
managed rebates and loan programs with several utilities, mostly in California.
The loan will require a monthly payment, of course. But customers' power
bills are expected to fall as well because APS credits customers for
electricity they make beyond what their home uses.
"Certainly with this interest rate, there will be opportunities for
customers to save money on a monthly basis," Mahrer said.
The alternative-energy program can use some promoting if APS is to meet
state requirements.
The Arizona Corporation Commission requires utilities to get 15 percent of
their energy from renewable sources by 2025, and 30 percent of that must come
from "distributed" sources such as solar panels on roofs, rather than
from renewable-power plants.
With big power plants like one burning scrap wood in Snowflake, the utility
is on track to meet the overall goal, but with only 2,000 customers using
household-energy systems generating about one-tenth of 1 percent of APS' energy
a year, the utility is missing the distributed-generation goal.
"Our goal is to achieve or exceed compliance with the
requirement," Mahrer said.
APS will pay EGIA $50 for each customer using the program, utility officials
said. The number of people who can participate will be limited by the amount of
money APS collects in renewable tariffs on customer bills, which it uses for
customer incentives.
Calculating payments
The loan program has an online calculator at www.egia.com/aps to help
prospective customers estimate what their monthly payments will be on
solar-panel or hot-water systems of various sizes.
Contractors in Arizona who are certified to use the program said that
working through the sometimes-complex finances with their customers will be
much easier with the loans and could be exactly what many customers need to
make investing in such a system attractive.
"It's a level above what we've offered before," said Sean Seitz,
president and co-owner of American Solar Electric Inc. in Scottsdale. "In
the past, we've had finance entities we've worked with, but we have referred
customers to those entities, and they would negotiate rates."
Now, installers will be able to better estimate if a solar system's loan
payments and lower electric bills will equate to annual savings compared with
what people pay for electricity without the systems.
"That will be the big trigger point if this thing is going to be a
success," Seitz said.
To make such calculations, everything from the size of a home's roof, its
pitch and direction it faces, average electricity use from the home, size of
the system and financing available needs to be added up, Seitz said.
Dan Modisette, owner of Efficient Energy in Flagstaff, hopes the program
will help convince some of the potential customers he has spoken with about
installing wind turbines in their yards to buy systems.
"APS is doing what I as an installer think should be done to get things
moving forward," he said.
It also is important that APS has included wind power in the program, with
that being more appropriate than solar in some parts of the state, he said.
"APS has gone from being not very progressive in their rebates to being
one of the best in the country in the last six months," he said.
American Solar Electric and Efficient Energy were among five contractors
qualified to use the program as of Thursday. APS officials said that more
contractors are getting the proper training and that the Web site will list
them as they become certified.
Financial decision
Deciding to add alternative energy to a house has become much more of a
financial decision for people than an environmental decision, said David
Warren, a director for the EGIA in California.
"Do you feel good going green? Sure," he said. "But do most
people do it for that reason? No."
His group also advocates the rationale that paying off a loan for a solar
installation gives people a stable expense, compared with fluctuating utility
bills, he said.
"What you can do is lock your utility rate in for the next 30 years or
so," Warren said. "Utility rates have a tendency to go up."
One of the regulators who imposed the renewable-energy requirement on APS
and other utilities said he was happy to hear of the loan program.
"Obviously, we want to look at the interest rates and fine print in the
contracts," Corporation Commissioner Jeff Hatch-Miller said. "Assuming
it's reasonable, this opens the door to a lot of people. Without a program
where this can be financed, you're leaving it to just the most wealthy people
to take advantage."
APS could face penalties from the Corporation Commission for missing the renewable-energy
requirement for distributed energy, but Hatch-Miller said efforts such as the
loan program show the utility is making a good-faith effort to meet the
requirement.
"We wanted to get people to step up to the plate and start doing some
things," he said. "We are seeing that."
Source: The
Arizona Republic, Randy Randazzo
