During these challenging economic times companies need an edge to survive. A pro-active approach to gaining new business is critical. It is not enough to sit back and wait for the orders to come in, especially if your business is related to construction or non-essential improvements.
Successful PV companies actively search out new opportunities and are creative to ensure that the sale closes. Roofing companies comb the streets looking for visible signs of needed repair or replacement work and then offer an attractive deal. Usually the prospect of long-term savings is not enough to insure the purchase of costly home-improvement work.
PV developers and installers in the US have addressed this dilemma by matching the desire for solar power with offers that do not require high up-front costs. Many installations within the US during 2012 have been accomplished at no cost to the building owner and include roof work, earthquake retro-fits and other repairs. The principle is based on an old-fashioned system of exchange.
A favored approach in Arizona uses incentives from the utility to pay for the installation in exchange for a power purchase agreement (PPA). The school district will then purchase the energy that it produces for the next 20 years based on the PPA rate. This approach has many benefits for school district. They save on their electricity costs immediately, may receive shade cover or carports as well as roof arrays, educational kiosks and monitoring. Also, any excess electricity produced above what the school consumes, can be sold back to the utility.
In contrast, PV installations have cost California school districts millions of dollars, and even though they were financed using low-interest Federal loans, the payback will take a decade. This has been highly controversial. The energy savings are used to pay back the loan instead of enhancing education and services for the district.
People prefer to immediately save money with no initial outlay. Small companies, municipalities and school districts are in agreement that this is a viable way to adopt renewable energy and lower electricity costs for the foreseeable future.
These new leasing and PPA business models create attractive opportunities for schools and other commercial property owners. Companies that explore PV have tremendous bargaining power and PV installers need to find creative ways to avoid the up-front cost hurdle to succeed. These increasingly popular business models gain importance in the next phase of PV adoption.