In the continuing spirit of permanently changing my energy consumption patterns to reflect the new reality of our “here-to-stay” twin energy and climate change crises, I am converting my house to solar power. I was referred to SolarCity by my friend John Fisher of DFJ, an investor and a director of the company, as a one-stop shop to get this conversion done. We are at the front end of the process, and I will report further on my experience with the transition as it occurs. John recently converted his San Francisco home to solar and is very happy so far (it’s good to be a satisfied user of your company’s products/services).
Why am I doing this? Very simple– it’s a win/win. With my new 11.400kW DC (STC) 9,672kW AC(CEC) solar power system — yes, you must convert from DC to AC — I will immediately save almost $4,000 in utility bills in Year 1, which also means an 85% reduction in my electricity bill. Because I am actually buying the equipment myself, the cash flow break even runs about 6 years, depending on what your assumption is for the future annual escalation rate of electricity prices– historically it has averaged 5% per year, and many expect this to accelerate.
So depending on how bearish you are about the world energy consumption situation (or how bullish you are on the price of oil) the break even may be sooner. In any event, I am reducing my fossil fuel consumption (lots of cute statistics available to make you feel good about yourself) and paying far less money to PG&E.
SolarCity is a very interesting venture, but it is not a technology company. This is a construction services company (procurement, construction, installation, and monitoring of solar panel arrays and meters) and, most interesting, a financial services company.
If you cannot afford the capital cost of owning your own solar array, SolarCity will do this for you NO MONEY DOWN. The difference between self financing and ‘going all the way’ with SolarCity is that you will pay about 15% lower monthly electricity bills, not 85% lower, while you pay off the system over 15 years. SolarCity will also cap your annual rate increases at 3.5%– which is well below what you would experience with PG&E. You get to feel good, SolarCIty makes a lot more money, and I hear that some financial organizations in New York may be interested in aggregating these solar system financing costs and securitizing them– no surprise.
The SolarLease vs. Buy Option
So here are some cute statistics:
Over the next 30 years, my system will offset:
588,706 lbs of CO2;
404 lbs of NOx;
101lbs of SO2; and
117lbs of particulates.
This amount of CO2 is equivalent to the amount absorbed by 1.27 acres of trees over their lifetime and the amount emitted by driving an average car 758,642 miles.
Are you feeling good yet? I am. Seriously, check out SolarCity. Make a difference!
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