In tune with ecological design, residents were very interested in adding PV systems to the townhouses when they were originally built. At that time, though, it was prohibitively expensive and there were few incentive programs to help out. For many years after, residents discussed adding solar-electric systems, but couldn’t find an approach that addressed all the challenges in a cost-effective way. In 2010, that changed, partly because we devised a new approach.
Revisiting our desire for solar electricity began with a bit of friendly conflict among neighbors. My wife Kristen and I, feeling frustrated by the lack of progress implementing renewable energy in our community, wanted to install a small solar heating system on the roof of our unit. When we asked for permission, several neighbors objected, citing the long-standing desire to use our shared roofs to implement a comprehensive PV strategy.
Feeling grumpy about the roadblock, I set out to demonstrate why such a PV system was impractical on our difficult roofs. As I was trying to prove this, it occurred to me that we didn’t need to use the roofs—we could ground-mount the PV system.
I quickly switched gears and roughed out a possible design for a 50 kW array located a few hundred feet from the neighborhood. Some initial calculations of costs and available rebates and tax credits, as well as some ideas about financing, made it seem feasible. So I started meeting with other residents to get their feedback. Enthusiasm for the idea ran high, and the group quickly agreed on some core goals:
We assembled a small project team, requested a small amount of seed money from the co-op board, and got busy.
We needed to get an accurate cost estimate, so I contacted my neighbor Tony Henderson, who has spent the last few years managing large PV projects around the Northeast. Tony was able to quickly validate and improve my design, and gave us an estimate of about $6 per watt, or $300,000, for the system. The DSIRE website (see Access) provided information on available rebates and tax credits, and we determined a final out-of-pocket cost of about $100,000.
With that estimate in hand, we started working out how to pay for it. We decided that it made sense for the co-op to own the system and that it should borrow the money. We doubted we would find a bank that would lend the co-op money for such a project, so we proposed borrowing it directly from individuals in the community.
With banks paying interest rates of 2% or less, some neighbors were open to lending if the co-op could pay a higher rate. We ran the numbers at an interest rate of 5% and a loan period of 20 years to calculate the monthly payment— the amount we would need to raise each month. To meet the goal of keeping monthly electricity costs similar to what residents were currently paying, that meant that the PV system would need to generate savings equal to the loan payment.
We used PVWatts to estimate the system’s annual output and gathered up a year’s worth of utility bills to estimate our neighborhood electricity usage in dollars and kWh. The PV system would generate about 55% of all the electricity used. By examining the average residential electricity rate, we determined the approximate dollar value of the PV-generated electricity. If residents continued to pay the same amount as their current monthly electricity bills, the PV system would generate enough income to pay the loans. In fact, the loan period was adjusted to 15 years, instead of 20.