Home
The City of Naperville, IL has put together a forward leaning Renewable Energy Program.
The program allows residents and business to voluntarily
purchase/support green energy via a $5 charge on their monthly electric
bills. You can buy extra 200kwh blocks for additional $5/mth. Over 9%
of eligible residents (~50k eligible) have signed on, including a
couple dozen individually listed businesses.
The result is a
$270,000/annual *war chest* to support renewable energy in IL via
purchase of renewable energy credits (RECs). Although only 1% of this
program is being used to support solar in IL (the rest supports wind
and small hydro), it still offers real benefits.
Naperville has offered to buy 35MWh of solar RECs for $65/MWh (a.k.a 6.5cents/kwh) which is being aggregated and administered by the Illinois Solar Energy Assn. and Community Energy Inc. Click on the ISEA link and scroll down a page to "read all about it".
This
program is intended to support small solar (<10kw) from IL residents
and businesses only. 6.5cents/kwh is significant, because it comes on
top of any net metered energy savings (9-12 cents/kwh depending on
utility in IL).
If a solar owner *knew* they could get this
amount for solar RECs, it would increase their "solar yield" by 50% or
more. Assuming a $9/watt installed price of solar (a.k.a $3.6/watt
after state and federal incentives) and 12cents/kwh net metering rate,
a 4.9% solar yield increases to 7.3%.
A solar yield is one divided by the simple payback (in years). The more standard way of thinking
about
a REC payment of 6.5cents/kwh is that it reduces the simple payback by
6 years (from just over 20 years to just under 14) given conditions in
IL.
I like the solar yield terminology because it allows a
person to think about investments in solar compared to other
"competing" investment options. Keep in mind that the risk of a solar
investment is much lower than most other investments. I'm willing to
bet that the sun will keep rising long after the US government has
defaulted on its "risk-free" debt (not that I think that will happen
anytime soon either).
I don't want to blow this small program
out of proportion...the offer only covers ~25kw worth of IL installed
solar, but then the program "cost" is less than $2,500. I assume this
is really a "pilot" program/offer which could in the future be adopted
statewide...IL has an RPS of 4% renewables in 2009 increasing to 5% in
2010 (mostly from wind).
And speaking of 2010...the IL senate passed a bill this year enabling what is known as PACE (property assessed clean energy ?) starting in 2010.
What
is PACE you ask? PACE allows property owners to borrow money from local
governments to pay for clean energy improvements, and then the property
owner repays the government through an increase in the property tax
assesment in future years. Basically instead of going to a bank to get
a loan to install your solar panels (which isn't really practical in
many cases) and then using your savings from reduced utility bills to
pay off the loan--local governments in Illinois can cut out the middle
man. In addition your local government can offer a lower interest rate
(than the bank which doesn't exist) because they are aggregating many
solar installs as well as their property taxing authority.
