Y

ou are living in a high-rise condo and want to participate in a solar energy solution and a sustainable future. You’d also like to offset some of the cost of your ComEd bill. You slide open the door to your west-facing balcony and realize you are not allowed to place solar panels on your patio, according to your association’s declaration and bylaws. Another problem is a west side only gets partial sunlight during the day and the matching tower west of your building blocks the sun late in the afternoon. Then you read an article about solar installations and learn that even if you could put solar panels on your patio, the cost of running the wiring to the basement to do the interconnect at your meter would not make a solar installation cost-effective. So you resign yourself to not being able to join the solar revolution and put a check in the mail in the amount of your full electric bill.

COMMON AREAS

At the next monthly condo association meeting, you raise the question about your common areas using a solar installation, to reduce costs and make a statement about the association’s green and sustainability goals. This could actually be a big step for increasing the perceived values of the units and the building in general. Many condo associations don’t have the roof space, as the mechanicals for heating and cooling take up significant portions of some roofs. In addition, the ability to perform service on the equipment can’t be impaired. You need 110 clear square feet for each kilowatt (kW) generated, so a 100kW solar array will require 11,000 square feet that is not shaded, whether from your building or a neighboring structure. Unfortunately, our list of caveats doesn’t stop there. Ideally the roof should be new, or certainly not older than 5 years. The last thing you want to do is put up a solar panels, only to take them down and reinstall them again after redoing the roof. The labor cost would use up all of the savings from the solar installation.

TAX CREDITS OR DEPRECIATION

There is another issue that haunts condo associations; most condo associations are not-for-profit organizations

and can’t take advantage of the Investment Tax Credit or depreciation. Since condo associations are not for profits and most generally have no tax liability, they can’t gain any savings from the ITC or depreciation. However, these components currently represent 50% of the payback on solar installations. That means without an income tax liability (which no condo wants), solar arrays take much longer to start producing savings.

POWER PURCHASE AGREEMENTS

One solution to the solar energy conundrum is a Power Purchase Agreement or “PPA.” Under this agreement, the solar array is located on the condo association’s property, though the association contracts to only buy the electricity generated by the solar installation at a discounted rate, with no investment in the actual solar power equipment. A third-party investor owns and operates the solar array and monetizes the ITC and depreciation. Seventy percent of the growth in solar installations in the past few years has been driven by third-party ownership and the PPA transaction. The association recognizes an immediate savings on their electric bill, price stability for the generated electricity, and no cost for maintenance of the solar equipment. Hosting local “clean energy” helps many associations reach their sustainability goals. Typically, PPA’s are 20 year agreements that allow for extensions.

ANOTHER SOLAR OPTION

A progressive-thinking condo association in Weehawken, New Jersey is taking the PPA a step further by contracting the third-party ownership through a Community Virtual Solar Garden program. This platform allows the owners in the condo association to purchase the output of the solar panels (becoming a Subscriber) to offset their personal electric bill for their condo. As the condo association pays the PPA for the electricity, the payments become credits on the Subscribers’ personal electric bills; purchasing only enough solar generation to offset up to 100% of their condo’s electric bill. As an added bonus, the association receives a marketing incentive for every Subscriber purchasing panels to offset the cost of their new roof. The individual owners can even view their share of the panel’s electric generation on their mobile devices or desktop. The condo association’s portion can also be tracked and viewed in the same manner.

Structuring a solar solution for all stakeholders is achievable, but it is more complex than just getting a quote for some solar panels. No roof space? No problem! Associations and condo owners can still have the option of participating in a solar solution through a Community Virtual Solar Garden.

 |