San Fran Finds Novel, and Cheaper, Way for Businesses to Go Solar

California Gov. Jerry Brown set a lofty new target this week: to generate enough clean green energy from rooftop solar panels and small wind turbines to power 3 million homes statewide by 2020.

Speaking at a UCLA clean energy conference on Monday, the governor said that 12 gigawatts, more than half of California's 20-gigawatt renewables goal, should come from local, distributed generation — namely, small-scale clean energy projects on homes and businesses. The goal, he said, is to skirt the high costs and extensive review periods of utility-scale installations.

Now, a new initiative in San Francisco could at least begin to help turn Brown's big idea into reality.

Earlier this month, the city kicked off its three-month-long Solar@Work program that allows smaller businesses in the Bay Area to collectively purchase solar systems.

Jenna Goodward, an associate at the World Resources Institute (WRI), said the city approached her organization with the idea after she co-authored an April report highlighting cooperative solar purchasing.

The study found that banding businesses together to buy solar panels could shrink upfront installation costs by up to 15 percent and cut by three-quarters the time spent on processing permits and fees.

"San Francisco was working with its commercial residents and local businesses on solar [installations]," she told SolveClimate News. "But even though it was helping them with feasibility studies, there wasn't a lot of uptake. It found that one of the ... barriers was upfront costs and the lack of access to affordable financing."

Currently, most government incentives are geared toward larger businesses.

For instance, only big box stores like Walmart and warehouses with massive rooftops are eligible for the federal 1603 treasury cash grant, which covers 30 percent of renewable energy project costs. Big corporations, meanwhile, often see returns from the long-term power purchase agreements that come with installations.

But for property owners with limited roof space and smaller businesses, decades-long agreements "don't always create the sort of payback that the particular market segment really needs to get excited," Goodward said.

"That led us to realize that there needed to be a new program that brought in both the best pricing available — making use of a group model to get a discount — and combined that with financing options that would really make [solar] affordable," she said. "Aggregating their demand was a way to get returns to scale."

WRI teamed up with Optony, a Silicon Valley-based solar consultancy, and the National Renewable Energy Laboratory (NREL) to scout out a solar provider to carry out its collaborative purchasing project.

San Mateo, Calif.-based SolarCity will offer financing options to at least 20 property owners in three Bay Area counties and the cities of Richmond, El Cerrito and Albany, including solar leasing, capital loans and loan guarantees.

The solar firm will also offer custom design and installation for all solar arrays, and, in some cases, monitoring, performance guarantee and insurance.

"Traditionally it has been possible to make solar affordable for large businesses, and it has been possible to make it affordable for homeowners," said Jonathan Bass, SolarCity's director of communications. "But it has been harder to make it affordable for small- and medium-sized businesses. This program allows us to do that."

SolarCity, which has more than 15,000 customers in 11 states plus the District of Columbia, works mainly with homeowners, government and big commercial enterprises like eBay.