Wednesday, April 16, 2014
Today's business page features a story from Tux Turkel about how Maine environmental groups would like to install more solar power across the state, with a goal of 200 megawatts of solar power capacity by the end of the decade.
If that sounds ambitious, bear in mind that the Wyman Unit No. 4 oil-burning power plant in Yarmouth can generate up to 610 megawatts of power. And in California, where incentives for solar power are much more generous, the solar industry installed 333 megawatts' worth of solar-electric capacity in 2013 alone.
So Maine won't be a leader anytime soon, but its nascent solar industry might benefit from some of California's pioneering spirit.
Solar panels can generate electricity at a price that's quite competitive with the rates you'd pay Central Maine Power (local architect Jesse Thompson runs the numbers in this post on GreenBuildingAdvisor), but most homeowners can't afford to pay, out of pocket, the $25,000 up-front price tag of a typical rooftop system.
SolarCity of San Mateo, Calif. has gotten around this problem by inviting big institutional investors to finance the installation of small-scale solar installations on tens of thousands of rooftops. These solar installations generate profit for SolarCity and its investors with fixed-rate lease payments from homeowners (who get to use the electricity) and from selling the panels' surplus electricity back into the grid.
In essence, the company gives homeowners the opportunity to save on their utility bills and help meet California's growing energy needs by hosting SolarCity's small-scale, environmentally-friendly power plants on their rooftops. It's a more democratic vision of how electricity gets made and sold: instead of massive, monopolistic power stations linked by massive power lines, SolarCity is building thousands of tiny power generators right where the electricity gets used.
And this week, the company announced that it planned to take the democratic approach one step further, by bypassing its big institutional investors and appealing for cash directly from small-scale retail investors.
This from an AP story published earlier today:
Rive says that he hopes to invest "billions" for solar projects through this new platform. Financial advisors caution that there are risks that small-scale investors need to bear in mind – for instance, if homeowners stop paying their bills, or if manufacturing flaws in installed solar panels degrades performance.
Bearing those risks in mind, though, green-minded Mainers might find it a better deal to sock away a modest sum in some sunny Californian solar panels instead of plunking down thousands for a solar installation at home.
Commercial Confidential tracks Maine's business leaders and economic indicators.
I'm an economics wonk and an online content producer for the Portland Press Herald.
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