Rebates - Financing

There are certain tax incentives and low-interest loans for both residential and commercial. You can find out if you qualify before we visit and confirm the facts by visiting the Database of State Incentives for Renewable Energy at: www.dsireusa.org.

The State of California does not offer any tax incentives or low interest loans for installing solar panels. All incentives for the State of California are on an individual city-by-city basis or through your public utility, with the exception of the Palm Desert-Sponsored Assembly Bill 811 recently signed into law by Governor Schwarzenegger.

AB-811

What Does AB 811 Mean for You?

With the passage of AB 811 (The Energy Independence Act / Loan Program), residents of Palm Desert are the first in the nation to be able to install energy efficiencies with low interest loans which can be repaid in up to 20 years through their property tax bill.

What’s In It for You?

• As the owner of residential or commercial real property, you immediately enjoy a greatly reduced electric bill with no out-of-pocket expense to you
• If you sell your home or business, the new buyer can assume the payments, as you benefit from the increased equity at sale
• Loans have a minimum of $5,000 and no maximum limits
• Loans are not subject to credit ratings or credit checks
• The interest rate is fixed at or near 7% and paid bi-annually through your property tax
• Loans can be used on a variety of energy efficiency improvements and the materials and labor required to install them properly.  Efficiencies now include:
• air conditioning and ventilation systems
• pool pumps
• energy efficient windows, doors and skylights
• window films
• tankless water heating equipment
• white roofs and coatings
• Renewable energy sources now include:
• natural gas fuel cells
• solar systems

How you can participate in AB 811:

• Decide what type of efficiency improvement and/or renewable energy conversion you would like to add to your home or commercial property
• Request and receive by e-mail, fax, regular mail or in person the AB 811 application and simply fill in the personal and pertinent information
• Allow the City of Palm Desert Office of Energy Management (OEM) fifteen (15) days after receipt of the application to evaluate criteria and await the green light to move ahead
• With a signed contract, the OEM liens the property and you now have six (6) months to complete the project
• Your contract price is now funded directly to your account.  You only pay on the funded amount of the contract on a bi-annual basis.

For more information and updates, please visit www.ab811.org or call our Palm Desert corporate office at (760) 568-3413.

Self Financing

The best way to self finance energy efficiency home improvements or solar system conversions for homes is through a mortage loan which includes a primary mortage, second mortage or home equity oan (HELOC) that is secured by your property.

Solar systems purchased for businesses are probably best financed through a company's existing sources of funds for capital purchases -- usually Small Business Administration loans or conventional bank loans.

How Much Does it Cost?

These numbers are ballpark costs from our experience.

Photovoltaics (PV): Equipment and installation costs are based on the number of watts in the PV array…the larger the system, the less per watt (in the PV array). Assuming an uncomplicated installation:

Grid-tied, no battery backup $7.50 - $9.50/watt installed
Grid-tied, with battery backup $10.50 - $20.50/watt installed
Stand Alone (off grid) $12.00 - $22.00/watt installed

Equipment and installation costs are based on the expected average monthly kWh output (in Southern California): this is a good way of estimating the cost of a system if you don't know how many watts you need in your PV array, because you can get an idea of cost based on the average monthly output of the system. The larger the system, the lower the equipment costs per monthly output. Assuming an uncomplicated installation:

Grid-tied, no battery backup $60 - $90 kWh output in an average month
Grid-tied, with battery backup $80 - $150 kWh output in an average month
Stand Alone (off grid) $95 - $285 kWh output in an average month

Return on Investment (ROI)

Off-grid applications of photovoltaics that are a mile or more from the nearest utility tie-in pay for themselves instantly because of the savings from not tying into the grid.

On-grid applications are dependent upon the local utility rates and areas.

Remember also that aside from the monetary return on investment there are the enormous benefits of lessening our impact on the earth, making way for cleaner air and cleaner living, and enjoying the personal satisfaction that comes with your installation.

For Commercial Building Owners, Non-Profits and Municipalities

We want to present visitors to our site with an overview of the four (4) possible financing tools ways currently available in the marketplace finishing up with Power Purchase Agreements which we at Renova feel will become the most effective, most used method of financing in the solar future.

In the Coachella Valley we live within the perfect storm when determining if there is clear benefit to installing a solar system on a commercial structure(s) as the alternative to using for it for common area electric or for providing utility generated energy to the building's tenants:

• Established State rebates;
• State and local policy supporting the installation of alternative electric energy generators;
• Utilities that allow grid connection (net metering);
• High (and climbing) energy costs.

In our opinion there are four (4) realistic methods for commercial building owners, non-profits and municipalities alike to add the benefit of solar investment to their property while taking advantage of ALL incentives available to mitigate prohibitive upfront costs.

• Self Financing;
• Lease Agreement;
• Local Municipal Bond Loan (Assembly Bill 811);
• Power Purchase Agreements.

Self Financing will, of course, give you the best return on your investment because IF you can afford the capital expense then combining the strength of State rebates and Federal tax incentives and accelerated depreciation can cause that advanced capital paid to be bought down by nearly 60% of the original cost and thereby bringing the payback to within the magic 5 year mark. That is a big IF for most owners, non-profits and public companies.

Lease Agreements have been used to fund commercial projects and are now being rolled out in the residential installation market. With a down-payment and monthly payments a home-owner can enter into the world of solar and take advantage of the benefits of immediate utility savings but do not get the rebate, tax incentives, and are personally responsible to guarantee monthly payments on the system. In the event that you sell your property the new owner must also have an ample credit rating to assume your Lease Agreement or you may have to continue making payments until the term (usually 15 years) is paid up. And at the end of fifteen (15) years you will not even have ownership and will have to buy the system out at more than 10% of its original value. Also, no maintenance is included in the current leasing programs available.

Local Municipal Bond Loan (Assembly Bill 811) With the passage of AB 811 property owners within a municipalities borders are able to finance the installation of distributed generation, renewable energy sources that are permanently fixed to their real property with market rate loans which can be repaid in up to 20 years through their property taxes. All rebates and tax incentives remain with the property owner though because of the fixed interest rate and amortization term offered by the municipality most property owners can obtain better financing. Thus far only property owners within the City of Palm Desert are the first to be offered this program with multiple California cities following suit to spur both residential and commercial installations within their city limits.

Power Purchase Agreements, easily defined, are relationships where one party lends its roof-space to an investor for a term where there is mutual benefit during a term to both parties. Essentially you, the building owner, agree to allow Renova to install a system on your property designed with the intent to power only that properties energy needs. Renova, through its relationship with various financiers interested in renewable energy investment, then takes on all upfront costs including design, materials and labor, permitting, utility agreements and installation and interconnection within the grid.

You then enter into a term agreement to purchase the resulting electricity from the Renova partnership at an agreed-upon rate for a period of time. The rate (cost per kilowatt hour) will increase at between 1% & 4% annually. This is a full 2%-5% less than historical annual average utility increases. You will cut more than a few cents per kilowatt hour off of your consumption cost and hedge against the probability of far greater annual increases.

In addition you are not responsible for the monitoring and maintenance of the solar power system. As the installer, owner partner and manager of the system Renova assumes all risk and responsibility including the 24/7 monitoring for system efficiency, cleaning of the modules and any risk of theft or vandalism. The incentive is Renova's for keeping the system in tip top shape throughout the term of the Agreement.

At the end of the term you decide to take one of three (3) roads:

• Renew the term Agreement with Renova;
• Dissolve the Agreement and Renova will remove the system from the site;
• Purchase the system outright for fair market value (usually estimated at 10% of original value)

As property owner, non-profit or municipality the option is yours. Even in situations where you are leasing and don't own the structure, have Tenants with terms longer than five (5) years in your building or are seeking to entice a Tenant to sign a multi-year Lease, a PPA offers fiscal logic that the other financing options lack.

We offer the Renova PPA option for solar systems of 200 kilowatts or greater ($1.5 million and up in cost) and size. And the area for the array is not an issue if a parking field is available at the building site. Also, we can intuitively propose a "Solar Assemblage" where multiple properties under one owner (private, non-profit, municipal or otherwise) can be bundled for a single PPA within the Renova program.