BRIGHTON: Solar power’s affordability makes strides

February 24, 2013 by  
Filed under Green Energy News

A new deal on solar financing for homes, being offered by American Honda Motor Co. Inc., came like a break in the clouds when it was announced this week.

The carmarker is teaming up with an American service provider, SolarCity, to lease rooftop solar systems in long-term contracts for less than the cost of conventional electricity taken from the grid.

Honda gets to firm up its relationship with clients by offering a new suite of energy products and SolarCity gets a new stream of customers. It’s good cross-marketing for them, mutual customers stand to get a break on power bills, and the environment gets a break, too.

No such offers are being made in Nova Scotia, where the energy forecast is for rising rates, followed by further rate hikes. But the news coincides with events in the solar energy industry that are bringing forward the day when subsidy-free photovoltaic solar systems may compete with conventional power.

Cheap solar panels and related components from China have been flooding into Europe and the United States, triggering trade disputes and retaliations while lowering the cost of harnessing solar energy.

In January, the Swiss multinational banking group UBS predicted rooftop solar power could soon reach “socket parity” or “grid parity” with conventional electricity in some European countries, making it comparable in terms of relative costs.

The convergence in costs, say energy analysts, is being driven by declining prices for solar equipment and cheaper battery systems to store solar power, at a time when rates for grid-based power are trending up. UBS suggested that investing in photovoltaic systems could ease the upward trend in power rates for households, and adding battery storage into the mix could drive down electricity costs.

Commercial enterprises with rooftop real estate also stand to benefit from this cost convergence between solar and conventional power.

While that scenario plays out in Europe, investors in the United States are experimenting with the idea of folding solar assets into traditional real estate portfolios.

In Ontario this month, three photovoltaic solar projects in Sault Ste. Marie, considered together to be the largest solar generation project in North America, swapped hands. The developer, an affiliate of Starwood Energy Group Global in Connecticut, sold them to a fund led by a U.S. investment firm, Kohlberg Kravis Roberts Co.

Ontario continues its experiment with small-scale subsidized solar power for homes and community organizations.

The installed cost of photovoltaic systems remains out of reach for most homeowners in Nova Scotia. As well, the lifetime savings, if any, relative to energy conservation measures, will need to be demonstrated and accepted if solar power is to break into the mainstream for residential and commercial use as a hedge against rising power bills.

Taken together, though, these signs point to alternative ways for homeowners to one day break free of the centralized, monopolized power industry in this province, which combines capitalism and bureaucracy in equal measure.

Rachel Brighton, a freelance journalist and former magazine publisher, writes on industry, ethics, economics and the environment.

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