'Solar group buy' program launched in California

Apr 19, 2011 By Tracy Seipel

For the past few years, Dennis Korabiak had been considering installing a solar panel system on his 2,300-square-foot San Jose, Calif., home. But the cost never penciled out.

All that changed last year when the city of San Jose developed a pilot program with a $100,000 grant from the federal government that encouraged city workers to band together to increase their buying power and simplify the sometimes confusing process of going solar.

Along with 38 others, Korabiak, a program manager at the city's redevelopment agency, took advantage of the offer. The result: His 3-kilowatt solar panel system cost $11,000 - about $4,000 less than when he had priced it individually three years ago.

Hoping to accelerate the adoption of by a wider audience, the city of San Jose, together with the Bay Area Climate Collaborative, recently launched a new program that will allow businesses and governments throughout the region to take advantage of similar "solar group buys."

"It's an opportunity to bring the cost down and demonstrate how easy it is to get solar," said Mayor Chuck Reed, whose goals for the city include getting 100 percent of the city's electricity from clean sources and creating 25,000 cleantech jobs by 2022.

Speaking at a City Hall presentation of the program, dubbed SunShares, Reed said he hoped San Jose's successful would eventually become a template for California.

Neighborhoods around the country have done these kinds of deals before. But until last year, according to Hannah Muller, program leader of the Solar America Cities program for the U.S. Department of Energy, no local government in the country had offered such a plan.

SunShares also is supported by the Energy Department and the Technology Credit Union, which includes employees of more than 1,200 San Francisco Bay Area companies, most of them tech firms.

"It's the Groupon of solar," said Rafael Reyes, director of the Bay Area Climate Collaborative, comparing SunShares to the wildly popular online coupon site that offers hundreds of daily discounts from local businesses to its members. The collaborative is a public-private initiative developed by the Silicon Valley Leadership Group to encourage a clean-energy economy.

"Our challenge is to take a good model like San Jose's and replicate it throughout the region," said Reyes, who cited a UC Berkeley study that concluded that every megawatt of residential solar installed creates 100 jobs or more. One megawatt of solar energy is enough to power roughly 200 California homes.

Korabiak said he has seen his monthly electricity bill plummet from about $70 to $12.87 this month. But SunShares doesn't just reduce costs.

Another key element is that "through a group buy, you're able to remove the complexities of going solar on your own," said Jessie Denver, San Jose's community solar program coordinator who helped implement the city's pilot project.

The SunShares program also helps homeowners choose the best vendor and most reputable contractor, as well as get the best price. The San Jose employees, for example, were able to get 40 percent off the current market price for installation costs with solar providers SunPower and SunWater Solar, Denver said.

And through the help of the San Jose Credit Union, those employee members who opted to borrow money to go solar got a competitive annual percentage rate of 3.99 percent.

"What gave me confidence was that the city had done some prescreening of both the product and the people we would be working with," Korabiak said.

Among the several dozen people who attended the SunShares presentation was George Purnell of GridIron Systems, a Sunnyvale, Calif., startup that focuses on generating better performance of existing software applications. He said he was impressed with the SunShares program.

"Most of us believe that whatever we can do for the environment is a good thing," Purnell said. "We should be able to walk the talk."

Explore further: Intel wireless charging in a bowl coming sooner than later

More information: For more information about the SunShares program, go to www.sunshares.org

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k_m
1 / 5 (1) Apr 19, 2011
So $11,000 spent and around $60 saved monthly means it'll take 183 months or just over 15 years to recoup the investment purely from savings off the electric bill. Was the $11,000 paid for out of the gentleman's pocket or part of the $100,000 grant? If out of the grant, is he paying that back or did the city just "gift" it to him and the others?

What is the cost of periodic maintenance on the storage batteries and such?

What does the house appraise for now, with the system? Did it's value increase $11,000? ... more than that? If the same or more, why? If I remodel my house it's value won't increase in accordance with the cost of the work. Does the city or installer get paid off from the proceeds from the sale of the house should it sell before being paid off?

Shouldn't the grant have been used on improving "city" properties and not the properties of its employees? ... or developed into a program to be offered to general residents of the city.

So many questions....
PinkElephant
not rated yet Apr 19, 2011
Was the $11,000 paid for out of the gentleman's pocket or part of the $100,000 grant?
Yes, out of his pocket, unless he borrowed it:

"those employee members who opted to borrow money to go solar got a competitive annual percentage rate of 3.99 percent"

$11,000 financed at 3.99% over 30 years, gives a monthly payment of $52.45 -- which is about equivalent to the gentleman's monthly electric bill savings.

Basically, under these terms you get to go "green" for free, while keeping your current household budget unchanged. Of course, if electricity becomes more expensive over the next 30 years, you benefit even more. At a minimum, inflation will likely continue and dollar will keep losing value, while the terms of the loan remain fixed -- so it's a winning deal, on the whole.
What is the cost of periodic maintenance on the storage batteries and such?
Sounds like these are grid-integrated systems, so no storage batteries involved.