2014 has been a year of solar innovation
Thanks to creative financing programs, federal tax credits and an overall reduction in product prices, solar power usage continues to accelerate at an increasing rate. Since 2010, the number of U.S. homes with solar power rooftops has nearly tripled. From homeowners and American businesses, to the U.S. government and education system, the solar industry keeps growing. According to data from the Solar Energy Industries Association (SEIA), more than a half-million U.S homes and businesses now utilize solar power. Furthermore, over fifty percent of all new electric capacity came from solar power during the first half of 2014.
Along with efficiency improvements and a rise in solar panel production overseas, experts credit the boom to new financing opportunities for homeowners looking to purchase their own solar panels. For example, SolarCity, the nation’s largest installer of rooftop solar systems, recently launched a “power purchase agreement,” which allows customers to lease rooftop solar panels from the company for a defined number of years. Customers then agree to buy the electricity generated by the panels from SolarCity, which is often cheaper than local utility costs. The leasing agreements also ease the financial burden for homeowners who don’t want to pay big upfront costs for solar panels, which can sometimes run upwards of $30,000. It’s also a better option for people who may not be able to take full advantage of the 30 percent federal tax credit. SolarCity also offers a loan program for homeowners who have heavy tax burdens or want to purchase their own solar panels, giving homeowners the option to pay the company back over time. As the use of rooftop solar power expands, these kinds of creative financing programs have become increasingly popular – roughly 2/3 of all solar installations in 2013 were made through leasing agreements.
Even the White House has gone solar. In addition to hosting a solar power summit back in May, White House officials completed a much-anticipated solar installation project on the President’s roof last spring. The Obama Administration has also announced several initiatives designed to improve energy efficiency and increase solar power usage in homes and businesses. The Department of Agriculture says it will spend $68 million on 540 renewable energy and energy efficiency products in rural areas, half of which will be used for solar power. These efforts will help reduce carbon dioxide emissions by nearly 300 million metric tons by 2030, which is equivalent to removing 60 million cars from the road. It also saves the U.S. about $10 billion in energy costs.
Finally, America’s schools, including several in Massachusetts are among the leaders in solar panel usage in the U.S. Between 2008-2012, nearly 3,000 schools became solar-equipped, a fivefold increase, according to the SEIA. The electricity generated from these schools is about 490 MW, which is enough to power thousands of classrooms and offset nearly 500,000 metric tons of carbon dioxide emissions each year. Utilizing cheaper solar power helps these schools to save on electricity costs and reinvest the savings on textbooks, teachers and educational programming.
From financial incentives, geopolitical benefits, job growth, and a cleaner energy source, American homeowners and businesses are benefiting from the advantages of solar power. Like most new innovations, there is risk involved, and customers need protection to reduce their exposure to loss. Solar power customers should be sure to include the value of the solar panels on their insurance policies to ensure that they’re covered in the event of property damage to the panels. They should also carefully review any insurance provisions in power purchase or financing agreements to confirm that their insurance policies can comply.
About the Author
Molly Lovelette is an Assistant Vice President at WGA in the Property and Casualty Group, with a specialized focus in energy and construction policies. She serves the day-to-day needs of numerous energy clients, including independent power producers, owner-operators and manufacturers in the wind, solar, landfill gas, waste-to-energy and fossil fuel industries.