The Maryland, D.C., Virginia Solar Energy Industry Association (MDV-SEIA) held its 2014 Annual Conference November 17th-18th in Washington, D.C. Among many successful breakout sessions regarding the state of solar throughout the Mid-Atlantic – including innovative financing methods and post ITC predictions – MDV-SEIA held its first ever Solar Awards – “recognizing people and organizations engaged in solar project development, advocacy, or innovation”.
We were very excited and pleased to learn that Secure Futures, LLC won the award for Solar Innovation of the Year – awarded to the business or individual that has brought to market a new concept, innovation, or product that promises to help advance the solar industry – for its development of a new business model to help overcome the barriers to third-party owned solar generation.
Developed in consultation with GreeneHurlocker PLC and our tax attorneys in Richmond, VA, the Solar Customer Self Generation Agreement (Solar CSGA™) has enabled a number of tax exempt institutions to enter into third-party service agreements without the regulatory or utility barriers that prevail in Virginia. Currently, the Solar CSGA is deployed in Dominion Virginia Power territory, and in multiple electric municipalities in Virginia.
Why is this important? Today, 30 states disallow or impose limits on a familiar third-party service arrangement, known as Power Purchase Agreements (PPAs) – PPAs provide opportunities for customers to go solar with no money down, and purchase solar electricity at competitive rates to grid parity. Under a PPA, the third party owner finances, builds, owns, operates and maintains the system – taking advantage of the federal tax credits and passing these savings along to the customer.
Virginia permits third-party owned (TPO) PPAs in Dominion Virginia Power (DVP) service territory, leaving customers in APCo or Coop territories without any options to pursue solar at reasonable and economical costs.
This is a fundamental problem in the debate on solar energy for non-profits throughout the nation. TPO PPAs offer a way for non-profits to capture cost savings, which ultimately result in discounted solar electricity rates. Under a PPA a customer:
- Has no upfront cost/investment requirements
- Does not need system, or maintenance expertise
- Utilizes solar generation behind its meter, purchasing solar at competitive rates
- Experiences the savings resulting from the Federal Investment Tax Credit and Rapid Depreciation
The Solar CSGA accomplishes the same benefits of a PPA – drawing on a longstanding statute regarding a customer’s right to self-generate his or her own electricity. The Solar CSGA allows customers to go solar with no initial investment requirements and to self-generate their own electricity. Secure Futures finances the project, owns and installs the system, guaranteeing its performance based on equipment specifications. The customer self-generates its electricity output from the system, purchasing a service from Secure Futures.
The Solar CSGA could potentially remove barriers to third-party ownership in 30 states across the United States that currently disallow PPAs, providing opportunities for customers to enter into solar service agreements at competitive rates.
Today, consumers are ahead of policy, demanding new avenues to access the environmental and economic benefits of solar energy. We look forward to continuing to develop innovative business and policy mechanisms to reduce the barriers to solar and to advance our industry.