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An Inside Look at the Benefits of Solar Power from #SolarFocus2019, hosted by MDV-SEIA in Baltimore, Maryland

James Koehler, Chief Strategist – Utilities, Energy Markets & Grid Parity at Palmetto. James is responsible for ensuring Palmetto’s successful expansion into new markets and residential cleantech products, including financial, strategic, economic and policy analysis and underwriting of clean energy markets throughout the US.

Having spent the last ten years as an energy-sector economist, financial analyst, forecaster and university instructor, I can safely say that the last decade has yielded more change in the energy sector than the previous 50 years!

It was an honor to be asked to moderate a panel on innovations in solar finance on behalf of Palmetto at the Maryland-DC-Delaware-Virginia Solar Energy Industries Association conference (MDV-SEIA), the largest and oldest solar conference covering the mid-Atlantic! I appreciate the opportunity to learn from other experts about new and exciting financing innovations for residential, community, commercial and industrial (C&I) and utility-scale solar projects.

I recall a time when the goal was to drive the cost of utility-scale solar to $1.00/watt.  Now some projects are penciling at $0.80…or less ! These types of cost reductions have been dramatic across all types of projects, as well as newly popular community solar.  Both centralized and distributed solar projects are displacing legacy fossil fuel assets throughout the country based on better pricing and value alone. Solar is not subject to the kinds of fuel price swings that coal, nuclear and natural gas power plants experience. After all, the sun is a natural entity and therefore not subject to fuel-price volatility!

From a financial innovation perspective, each of the solar types (small, medium and large)  have benefited from increased involvement from institutional investors and lenders entering into the sector.  By aggregating and securitizing these assets, this type of security has broader appeal in the market because it provides long-lived, lower risk yields. Decreasing the risk of these cash flows provides greater amounts of capital, as well as lower cost capital, to increase the availability and drive down the cost of solar!

Financing options in residential solar have expanded from PPAs  to leases to increasingly homeowner driven ownership through loan and cash purchases. A number of originators and lenders have sprung up to meet this demand.  Not only has this driven down overall costs, but the number of financial products has more than tripled to provide accessibility to larger swaths of homeowners.

For residential homeowners, there are three primary benefits of going solar. These benefits have remained constant over-time.

  • Savings on your utility bill
  • Decreased carbon footprint
  • When coupled with battery storage, the ability to keep the lights on even during a power outage

As utility prices continue to increase (up nearly 65% in the last 16 years – see graph below), the savings from your solar system will increase with every passing year.  It works like this:

Say a utility company is charging 12¢ for each kilowatt-hour (kWh) you purchase right now.  For each kilowatt hour (kWh) produced by your rooftop solar system, you offset (and save) that 12¢.  Fast forward to the next year. The utility company is charging 13¢ per kWh.  Now you’re saving 13¢ from each kWh produced by your system.  Over a 30-year (or more) lifetime of a system, this can add up to $10,000 or more in savings.

Figure 1: US Electricity Price Increases (1915-2019)

We take pride in the knowledge that Palmetto contributes to new innovations – both financial and commercial – for homeowners looking to save money through clean-energy products like solar.

As one of the largest and fastest growing independent distribution and sales networks in residential clean energy, we are proving that our approach to the three key elements of residential solar project development – sales, financing, and operations/construction – reduces the cost of solar and other clean energy products for homeowners.

It also provides the foundation to scale our business. Palmetto has a presence in 11 states now, with another 10-state expansion planned in the next six months.  We execute the following to ensure that homeowners continue to choose renewable energy: educate them on the benefits and savings, deliver exemplary customer service, provide the lowest cost, highest quality cleantech products and deliver and install them without delay.

For more information on how Palmetto can help you save money on your utility bill, please visit our website, palmetto.com

Panelists from “Expanding Solar to Small and Midsize Businesses” (from L-R): Aaron Kraus, Greenworks Lending; Shelley Cohen, DCSEU; Jim Spano, RadiantREIT, James Koehler, Palmetto (Moderator)