For much of the past year, clean energy advocates, solar industry executives and utility officials have been at an impasse over how best to promote community-wide solar projects under a bill pending in the legislature.
While they have been debating the bill’s fine points, a Rumson-based solar firm has figured out how to do it, albeit on a smaller scale.
GeoGenix is celebrating today the completion of a 10-home “community solar” project in an adult 55-and-over community in Franklin Township in Somerset County. It’s the third so-called community solar project completed by GeoGenix in the past couple of years.
Return on Investment
Convincing seniors to invest long term in the benefits of a solar system, which could take years to earn its return on investment, seemed a tough proposition when GeoGenix got involved with trying to sell systems in adult communities, said Pete Ramsey, manager of business development for the firm. “What we found out was quite the contrary,” he said.
“While helping the environment was a major consideration in deciding to go solar, the return on our investment was really the deciding factor,” said Allen Delevett, a 68-year-old homeowner at Somerset Run. He was the first to install the system at the adult community, but once he did, it sparked many questions from friends and neighbors.
“The systems installed in our community will each have a simple payback of less than five years, and, frankly, we see solar as a far more attractive, and safer, investment than the stock market or CDs,” said Delevett.
Developed in California and now being exploited by GeoGenix in New Jersey, the program allows residents of a community to band together to purchase solar for their individual homes at a discounted price. The discount is made possible by operational efficiencies, such as streamlining the permitting process and the deployment of installation crews.
But it wouldn’t work without state and federal incentives. Delevett’s system earned an $8,000 rebate from the state, thanks to a generous program that helped jumpstart the solar industry in New Jersey, but has been discontinued by the Christie administration.
Still, there are other financing options available that make community solar attractive. At Someset Run, for instance, some homeowners are taking advantage of a loan program offered by the state’s biggest electric utility, Public Service Electric & Gas (PSE&G), Ramsey said.
PSE&G offers a loan to cover 40 percent to 60 percent of the project. The loan is paid back by the solar renewable energy certificates (SRECs) the system earns for the electricity it generates. Homeowners also can take advantage of a federal tax credit, which can cover about 30 percent of the project cost, Ramsey said. With those incentives, GeoGenix typically asks the homeowner for a nominal downpayment, usually running about $500, he said.
“The typical payback is five years and the return on your investment is usually above 20 percent,” Ramsey said. “It’s attractive to homeowners because it eliminates the risk associated with the SRECs.”
Up On the Roof
Unlike the approach favored by the bill currently before the legislature, GeoGenix installs individual solar systems on each homeowner’s roof, giving the owner the flexibility to determine precisely how they want to finance the project.
The ten homes that make up the project represent 80 kilowatts of generating capacity and are expected to produce nearly 100,000 kilowatt-hours of electricity each year.
The community solar bill (A-915) pending in the legislature had much greater ambitions, being touted originally by advocates as helping New Jersey achieve very aggressive solar energy goals. But it has been in legislative limbo since last fall, having been amended so many times that even the people who pushed the bill from the beginning now oppose it.
They say the bill sets up an overly complex system to putting together community solar projects, making it likely the only ones who will benefit from it are larger solar companies and utilities, an outcome that would crowd out smaller solar firms in the market.