Written by: Guest | Best Company Editorial Team
Last Updated: July 4th, 2020
Guest post by Kyle Kroeger of Green Coast
Shifting to clean energy is one of the best ways of acting on climate change. There is a vast potential for universal clean energy access, which can result in human health and economic benefits. One of the biggest limiting factors in clean energy among consumers is the large upfront capital cost. There are several ways you can participate without having readily available cash.
With the recent solar breakthroughs and high efficiency appliances and lighting, clean energy is now a more affordable option. Clean energy is helping lower the costs of household electricity and power bills.
Do you want to adopt a clean source of energy but think it’s too costly? Here are five ways in which you can participate in renewable energy without a significant capital cost.
1. Shared/community solar
Community solar is one of the best ways people can go solar without a substantial capital cost. This is a suitable option for people who cannot install an entire solar system due to economic reasons, people living in rented houses, and those living in places with less sunlight.
Community solar is a program for the community that creates revenues by selling the energy to the utility. Usually, it involves having a bunch of solar panels in a large plot of land which has a consignment to offer electricity to the nearest regions. Residents and businesses purchase energy through subscription.
With this program, people subscribe to the energy, which helps offset the brown power they use at their homes. The utility identifies every subscriber as offering clean power to the grid and therefore rewards them by providing solar credit on their bills. These credits help zero out the already existing utility bill.
Community solar can significantly reduce electricity bills because people share the electricity generated. The program utilizes net metering, which is a billing mechanism that allows solar panel homeowners to feed electricity that they are not using and send it back into the grid. With this virtual net metering, you virtually own a portion of the solar power plant and share the generated electricity.
Use of community solar is not only eco-friendly, but also helps create employment, and supports low-income household financially. Also, this is a good investment and can help the electricity company achieve a renewable portfolio standard.
2. Rooftop solar leasing
If you are interested in a simple, low-maintenance option for installing a solar energy system on your home, leasing solar panels is a good option for you. In the past, if you wanted to get solar panels on your rooftop, then you had to invest a considerable amount of money.
But with the introduction of the solar leasing model, you can use this renewable energy at a lower cost. The solar leasing firms help their customers benefit from the rooftop solar systems without getting involved in installation, financing, permitting and operating the panels.
This solar leasing model usually comprises of four parties which include a creditworthy homeowner, the electric utility, a solar leasing company, and investors to finance the system.
Under this program, the leasing company installs and maintains the solar system on the rooftop of their customers. The leasing company then sells power to the homeowners who have an agreement to purchase it at a fixed or variable predetermined rate in about 20–25 years.
The homeowners must have the right kind of roof and must be in a favorable locality. When the lease period ends, the homeowner may get the panels removed, purchase the entire system, or renew the lease agreement.
With the leasing models, the homeowners can save up to 10 to 15 percent on their electricity bills per year. However, the homeowners’ savings depend on the price of grid electricity.
3. Third-Party Solar Financing
Third-party financing is another way of participating in affordable renewable energy. With third-party financing, you can lower the costs of solar panel system installation and maintenance. With this program, companies develop new products and services to cater to the growing demands for solar systems.
Third-party financing occurs in two models, which include power purchase agreements (PPA) and solar leases. A solar company installs a solar system on the customer’s property in both models.
Under the PPA model, the customer pays for the electricity at an agreed-upon rate. While power purchase agreement is very similar to a solar lease, there is a crucial difference in that you pay a predetermined monthly amount for every kWh the solar produces as opposed to paying a fee on a monthly basis regardless of power production. Here is how you can determine how much power solar panels produce.
4. Property Assessed Clean Energy (PACE) program
You can finance solar through PACE programs in some states in the United States. With this program, the homeowner loans money from specific states, town, counties, city, or municipality and repays in over 15 to 20 years through higher property taxes.
PACE programs help property owners finance energy efficiency improvements and renewable energy on commercial and residential properties. This way, the property owners can install clean energy without incurring the high upfront costs associated with the installation of energy-saving retrofits and solar panels.
With the PACE financing program, property owners can have access to low interest and long-term loans and, in turn, it helps reduce their energy bills. Again, the homeowners can pay for improvements over time through assessments on their property tax bills.
Once the property is put under the PACE arrangement, it remains there even if it is sold, foreclosed upon, or transferred.
5. Group purchasing
People can also participate in renewable energy by taking part in a group purchase. This is usually possible through a Groupon concept, an internet-based platform that helps people get group discounts. People sign up for offers together, and later they unlock group discounts.
One Block Off the Grid (1BOG) uses this concept to offer residential solar panels. Homeowners can save up to 10 to 20 percent with this financing program. Group purchase gives a solution to solar industry pain points, including substantial upfront costs.
Currently, 1BOG is only working with a variety of solar providers around some states in the United States. Also, it has plans of branching out into solar thermal installations as well as home energy conservation.
Today, you do not have to have a lot of money to use renewable energy. You can opt for some of these ways which are quite affordable.
If we go green and utilize clean energy, we can start reducing our reliance on fossil fuels. This will go a long way in reducing our impact on climate change and thus save our planet. Start living more sustainably by choosing one of these affordable renewable energy options.
Kyle Kroeger is a contributor for Green Coast and has a strong passion for sustainability. Green Coast is a renewable energy and green living community focused on helping others live a better, greener life. We believe that energy and green living has become far too complex, so we created a number of different guides to build a sustainable foundation. You can follow updates on Facebook and Twitter.