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Neighborhood Solar Bulk Purchase FAQs
What is a solar bulk purchase?
A bulk purchase is when a group of neighbors work with DC SUN to go solar together.
By going solar as a group, each participant saves 20% or more off the cost of their
system. It’s the same principle as buying in bulk at Costco.
The group will go through the process of purchasing solar systems together. The group
will select a single contractor to install systems on all of the homes, but each participant
owns their own system and will sign their own contract with the installer.
What is DC SUN?
DC SUN is an umbrella organization for 11 solar coops throughout D.C.. We are
dedicated to cultivating a greater solar presence in the city. DC SUN strives to make
rooftop solar power convenient and affordable for everyone by providing communities
with the information, connections and opportunities they need to move efficiently
through the “solarization” process.
We are 100% volunteer and not affiliated with any specific company or product. So, we
are uniquely positioned to give you unbiased, thoughtful advice based on our extensive
experience. We will be there to support you throughout the solarization process!
Why should we participate in a neighborhood solar bulk purchase?
Going solar as a group has many advantages:
1) By grouping participants in a particular area together, the installers will have less
travel time and costs, resulting in a better price for the group.
2) Coming together as a group means we have more negotiating power with
installers and can get a better price for the group.
3) Understanding all of the details of solar and solar financing can be confusing. By
going through the process as a group you can get your questions answered and
feel confident that you’re getting a good deal and a quality solar system.
4) DC SUN has a lot of experience helping people in DC go solar. We also aren’t
affiliated with any specific installers. Our role is to serve as a consumer advocate,
so we make sure that you get the best deal possible.
How do bulk purchases work?
Step 1: Outreach and sign ups
The first part is outreach and getting the word out, with the goal of turning people out to
an info meeting. This involves hanging fliers, advertising via neighborhood listserves,
and telling your neighbors about the info meeting. At the meetings DC SUN will explains
the bulk purchase process and answer any questions people have about solar.
The next step is then for people who are interested in moving forward to sign up via an
online form. This signals your interest in going solar, but is not a binding commitment to
participate in the bulk purchase.
Step 2: Pre-Assessment
Once you sign up via the online form, DC SUN does a preliminary screening of your
roof via Google Earth. This is to see about how big your roof is, how much shading you
have and what size system you could potentially install. If your home isn’t a good fit for
solar, DC SUN will let you know.
Step 3: Request for Proposals and Bid Selection
Once at least 20 people have signed up and passed the roof screening, DC SUN will
issue a Request for Proposals (RFP) from area installers. This RFP asks local installers
to provide a single price that they will offer to the entire group of bulk purchase
participants.
Once DC SUN has received bids from installers, they will convene a selection
committee for the group. The selection committee made up of members of the bulk
purchase group that are interested in selecting an installer for the group. The group will
review each of the bids and select ONE installer to complete all of the solar projects for
the group.
Step 4: Individualized Proposals and Signing Contracts
Once the selection committee selects a single installer to complete all of the solar
projects for the group, that installer will meet with each participant. They will then
provide an individualized proposal that lists the size and cost of a solar system for your
specific house (the cost will reflect the group discount). If you decide to move forward
you then sign an individual contract with the installer to have the system installed.
How many people do we need for a bulk purchase?
We need about 20-30 households signed up in order to get a bulk discount.
What are the available incentives for solar?
Besides the environmental incentive of owning your own renewable energy system
there are a number of financial incentives that make solar PV affordable.
1) Electricity savings: Over its 25-30 year lifetime, a system will generate tens of
thousands of dollars worth of electricity. You will be connected to the grid and
NETMETERING will allow you to seamlessly use your own power or grid power
whenever your own is not available. NETMETERING allows you to “rollover” any
excess value you produce. The value of the electricity you produce depends on
the size of your system and the price of electricity you are replacing not how
much you use.
2) Federal Tax Credit. You get back 30% of the total cost of the system BEFORE
other incentives. You still have to pay up front for the system but when you file
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Neighborhood Solar Bulk Purchase FAQs
your taxes you will receive a 30% CREDIT (not a deduction) from the federal
government.
3) Solar Renewable Energy Credits (SRECs). The easiest way of thinking about
this is whenever you generate solar electricity from your system, you are also
generating an abstract “green value” of your electricity. Through law and
regulation, this abstract concept becomes worth something called an SREC.
You can either sign your rights away to all the SRECs your system will ever
generate and get a cash payment from your installer (which ends up being a
discount applied against the cost of your system). Right now that up-front onetime cash payment is $1250/kW installed. Or, you can keep your SRECs and sell
them as they accrue through brokers like SRECtrade.com or solsystems.com.
In the long run it is generally believed that this will get you more money, but is
riskier than just taking an up front payment. Every time your system produces
1,000 kWH of electricity, you get one SREC.
The reason that SRECs exist is that PEPCO is required to put a certain amount
of solar PV production on the grid. To comply with the law they buy SRECs as
well as energy. Due to the current laws/regulations, the value of an SREC
should hold steady until 2016, after which it will drop in value somewhat.
4) Bulk purchase discount. Participating in the bulk purchase lets you save 20%
or more off the total cost of the project. The installer gives you this discount
upfront just for participating in the group.
What exactly is the cost of going solar?
Here is a breakdown of the cost of a solar system, using an example 3kW system. Your
price may be different depending on the size of your solar system.
Cost to Go Solar (EXAMPLE, NOT ACTUAL BID)
Cost to install 3.0 kW system before incentives1
$13,500
[-3,750]
Solar Renewable Energy Credit Upfront Payment
[-2,700]
Bulk Purchase Discount (~20% of system cost)
Initial Upfront Cost
$7,050
2
[-3,240]
Federal tax credit (30% of system cost)
[ -480]
Estimated energy savings in one year
Total Cost (after one year)
$3,330
Is there a cost to participate in the bulk purchase program?
There is not an additional cost to participate in the bulk purchase program beyond the
cost of purchasing your solar system. DC SUN charges the final installer a $500
development fee per complete project, but this fee is paid by the installer, not the
homeowner. DC SUN is 100% installer neutral and our role is as a consumer advocate,
so we do not give preferential treatment to any specific company.
What's the life expectancy of this system?
The life expectancy of the systems tend to be 25 years or more.
There is very little that can go wrong with a solar panel short of physical damage. In
fact, all panels pass Jet Propulsion Labs Block V tests, which are:
• Withstanding 125 m.p.h. wind loading;
• Surviving one inch hail at terminal velocity (52 m.p.h.);
• Thermal cycling at temperatures beyond what you will find here on Earth (short of
tossing them into molten lava!!).
There are no moving parts to wear out and solar panels don't consume any fuel. As long
as there is enough light to cast a shadow on the ground, they will produce electricity.
They are so reliable that almost all panels come with 20 to 25 year warranties.
What annual maintenance is needed on the system?
There is no maintenance on the system. We generally do not recommend that you even
wash the panels, since DC's rain is enough to keep them clean. Inverters may break
down after 15 years and would need to be replaced, but they are generally under
warranty for at least ten years.
How large should the system be to power a typical house?
It depends on how much energy you use and how big of a system you end up buying.
Most people in DC are limited by the size of their roof. Generally, a system on a typical
row house will produce about 30-60% of your electric needs (average DC house
1
2
Actual cost will depend on specific system; some homes may require roof work prior to installation.
Tax savings/credits estimates should be discussed with your individual tax advisor.
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Neighborhood Solar Bulk Purchase FAQs
850kwh/month). When you get your customized proposal at the end of this process, you
will get a bid that maximizes the amount of solar that fits on your roof and supplies up to
–but not more than 100% of your average use. Your proposal will also include a
projection of the amount of electricity your system will produce. Although it varies from
year to year, we have found these projections very accurate.
What are the current expiration dates for the Federal and DC Solar Credits?
DC's SREC program is legislated to last until 2022. The Federal Tax Credit is scheduled
to expire 2016. For more information on all incentives the website DSIRE.org is
exhaustive and has links to the IRS code etc.
What can I do if I live in a condo?
Right now, your options are limited. If you have a single boiler in your condo for hot
water, your condo association can install a solar thermal system. This is probably the
easiest thing to do, there is a company called Skyline Innovations that will install a
system at no cost and then charge you for the heat the system generates. This cost is
purported to be less than gas/electricity.
If you have a common area that is on its own meter, you could install a solar system just
for the common area.
The DC Community Renewable Energy Act is likely to pass in September. Once it
does, anyone in DC, regardless of whether they have an appropriate roof, will be able to
buy into a solar project anywhere in the district. They will then receive net metering
credits from PEPCO even if the solar panels are not on their house. This is not possible
now.
What are my financing options?
The prevailing opinion is that in the long run, it’s financially better to pay for your system
up front and reap the benefits over the long term. However, if you’re not able to do that,
there is another option. It’s commonly called leasing but what it really is is a power
purchase agreement (PPA).
With a PPA, a solar company will install a solar system on your house. You do not
receive any of the incentives described above. No grant, no tax credit, no SRECs. But,
you also don’t pay anything for the system and it will be owned by the company that
installed it. You then sign a 15-20 year contract with the company agreeing to buy the
energy that the solar panels produce. You buy whatever your system generates and
whatever else you need you buy from PEPCO (you get a split bill). For example, right
now PEPCO charges about 14 cents/kWh for electricity, while a PPA company will
charge you about 9 cents/kWh. But, that 9 cents/kWh will likely increase over time
depending on the escalator that is included in your PPA contract. Typically the price
increases at about 2-3% per year. One major advantage of a PPA is that the company
is 100% responsible for the equipment. Depending on how you think energy prices will
go and whether you have any savings the economics of a PPA sketch out a little bit
different for each individual. If you can’t take advantage of the tax credit the PPA could
be the perfect option for you.
Overall, it’s is usually a better rate of return to purchase a system if you have the upfront
cash available, but going solar via a PPA is not a bad decision.
I have more questions!
Check out www.dcsun.org and join our Google group. Chances are someone on the
google group has already had your question so you might already find the answer by
searching. If not, you can pose it and within minutes a member of the group will
probably reply.