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Solar FAQ’s

Brightergy Financing

What is BrighterFinance?

BrighterFinance is Brightergy’s financing option that allows for customer ownership. For example, we will sell you a solar system (you own it) while financing a portion of the purchase price for you.

What interest rate do you charge?

Like any lender we prefer to loan money to customers with good credit that are likely to pay us back. We typically offer very competitive interest rates. Right now our rates range from 3-6%.

How much are the monthly payments?

The monthly payments depend on how much you finance, the interest rate, and term of the amount financed. We typically structure BrighterFinance plans so your monthly payment is less than what you would be paying the utility company for the amount of electricity generated.

30-Percent Solar Investment Tax Credit (ITC)

How do you determine the amount eligible for the ITC?

The entire cost of your solar system is typically eligible for the 30-percent tax credit. You can typically include other construction related costs necessary to install your solar system(i.e., structural support).

Who is and is not eligible for the 30-percent ITC?

Owners of a “solar property” are eligible to apply. An owner may be an individual, household, partnership, and/or business entity that owns the solar-power system. The following are not eligible: governments, counties and municipalities, public schools, 501(c) non-profits, and other tax-exempt entities.  We have developed the BrighterLease™ as an alternative to help these entities adopt solar energy with little to no upfront costs.

What is the 30-percent Solar ITC?

In the United States federal tax code, the Solar Investment Tax Credit (ITC) is a 30-percent tax credit available for businesses who install solar-energy systems, thereby reducing tax liabilities for commercial companies making a solar-power investment. Under the current law, the ITC remains in effect through December 31, 2016.

BrighterLease™

What is the BrighterLease™?

BrighterLease™ is our solar leasing program for non-profits and government entities. With a BrighterLease™ we maintain ownership of the solar panel system and lease it to you for a fixed monthly payment. We typically structure the lease for a term of 15-20 years and come up with a monthly payment that is less than what you would be paying the utility company for the same amount of electricity.

What happens at the end of the lease term?

You have a few options: Brightergy can remove your equipment, purchase your solar system at fair market value, or extend your lease.

What happens if we move?

Your lease will transfer to the new owner or you have the option to buy out the lease.

What are the ongoing responsibilities for a solar lease?

There are no maintenance obligations – all you are obligated to do is continue to pay your monthly lease payment.

How much will my lease payments be?

Monthly lease payments depend on the solar system size, but will typically be more than 15 percent below what you would be paying the utility company for the same amount of electricity.

Solar Economics

What is an SREC?

Renewable Portfolio Standards require electricity suppliers to procure a certain portion of their energy from solar power producers. An SREC is a solar renewable energy credit that is created when you generate solar power, ie. for every megawatt-hour of solar electricity that is created, 1 SREC is created. SRECs can be sold to electricity suppliers who need to meet solar requirements for Renewable Energy Standards.

What is bonus depreciation for solar property?

Depreciation is defined as, “the reduction in the value of an asset with the passage of time.” Businesses can deduct the cost of a capital investment over a certain period of time, known as a depreciable life.

In 2008, Congress made the decision to further incentivize capital investment by accelerating the Modified Accelerated Cost-Recovery System (MACRS) depreciation schedule economy-wide, qualifying solar-panel system owners for a 100-percent depreciation bonus on systems placed in service by December 31, 2011.

Under current law,  qualifying solar-energy systems placed in service by January 1, 2014 are eligible for 50-percent bonus depreciation. Essentially, this allows taxpayers to claim an immediate deduction against income of all of the cost of the solar property. In the case of property on which the solar tax credit has been claimed, the deduction is eligible to be claimed against 85% of the cost of the property.

This means that during the first year of a solar system’s service, businesses can choose to depreciate 50-percent of the tax basis while the remaining 50-percent is depreciated under the normal MACRS schedule.

This applies only to new property, not to used equipment. Solar property qualifies for the bonus depreciation if it is purchased and placed in service before January 1, 2014. Bonus depreciation can create a net operating loss (NOL) that may be carried back to the two tax years prior and provide an immediate tax refund. A NOL may also be carried forward for twenty years.

More information can be found in the official IRS guide to bonus depreciation and on the Solar Energy Industry Association (SEIA)’s website.

What is the payback period for solar?

The three primary variables that determine your payback period are utility prices, cost of system, and available incentives.

For commercial solar-power systems, customers typically realize a payback within 3 years with our BrighterAsset™*.
*Assumes customer can take advantage of the depreciation benefits.

What incentives are available?

The incentives depend on your local market: check out our solar incentives page where we break it down by the areas we serve.

Most solar-energy incentive programs have limited funds or an expiration date, so if you are comfortable with the current economic case for solar, you should act now.

How much paperwork is involved with all the incentives?

No need to worry about the paperwork – Brightergy will take care of it for you.

What are the options to finance my system?

You have a few options, depending on where you live:
1. BrighterAsset™: You own the system, flat-out. Available for all our clients.
2. BrighterLease™: We own the system and lease it to you for a fixed monthly payment. Available for all clients, but typically makes the most sense for our non-profit and government clients.
3. BrighterPPA™: We own the system and sell you the electricity produced by the solar system. Only available for our Massachusetts clients.

Will solar increase the value of my property?

Absolutely – it’s one of the financial benefits of owning a solar-power system. The value of your solar-energy system is in the energy it produces, resulting in your reduced electricity costs. In fact, as more businesses turn to solar power for their energy source, the real estate industry has seen the need to develop a reliable and credible way to determine the value of solar installations and the solar power they generate. In January 2012, Sandia National Laboratories and Solar Power Electric™ released a spreadsheet tool they developed with the intention to set a standard methodology for valuing new or existing solar photovoltaic (PV) systems installed on commercial properties. This tool has been supported by The Appraisal Institute, the nation’s largest professional association of real-estate appraisers, who also provides classroom courses on green and energy-efficient valuation.

BrighterPPA™

Will the PPA cover any additional property taxes and insurance costs?

Typically, PPA system owners will want to make sure the solar panel system is properly insured, so they will pay for that. However, property tax increases – if any – need to be negotiated.

What are Solar PPA’s?

Solar PPA’s – or Power Purchase Agreements – are a long-term agreement to buy solar power from a third party that owns the solar panel system producing the electricity. Solar PPA’s serve as an attractive alternative to purchasing a system because there is no upfront investment or ongoing maintenance required. In essence, a user (tenant or building occupant) agrees to pay a set rate for a set term for the electricity generated by the solar energy system.

The solar energy system is owned by a third party who takes advantage of the solar tax credits and other state or federal solar-energy government incentives. A well-structured PPA allows you to reduce your electricity costs immediately and realize increased solar-energy savings over time as electricity rates rise.

Where can I participate in a Solar PPA?

Renewable-energy laws vary by state. For example, in Missouri where utility companies are regulated, anyone who wants to sell power must be a regulated utility, effectively making solar PPA’s impractical. As such, PPA’s are not common. We currently offer the BrighterPPA™ in our Massachusetts market only.

 

How are the PPA’s financed?

Solar PPA’s are financed through normal bank debt and “tax equity” investors who benefit from various federal and state incentives. By bringing together multiple banks and tax equity investors, we are able to obtain a lower cost of capital and translate that into lower PPA rates for our customers.

 

What kind or organizations are PPA’s best for?

Typically, PPA’s are best for someone who plans to occupy their building for an extended period of time. The most common PPA customers are municipalities, REIT’s, utilities, and larger building owners.

How will I know how much energy the solar system produces?

We use very reliable solar monitoring software and will give you real-time access to solar-energy production information.

Do we have to own the building?

No, you can be a tenant, preferably under a long term lease.

What is the minimum size system for a solar PPA?

Typically, the minimum size for a commercial solar-energy PPA is a 100-kilowatt system, which would require approximately 10,000 sq. ft. of rooftop space and annual usage of at least 125,000 kilowatt hours.

What if I want to purchase the system?

You can purchase the system at the end of Year 6 for a pre-determined price; you can also purchase the system at fair market value at the end of the PPA term.

What if I want to install a new roof when the solar panels are on my roof?

Each PPA typically contains language that allows the building owner to do a re-roof during the term of the PPA. Each contract is different and will need to be negotiated.

Who maintains the system?

Brightergy handles 100% of the ongoing maintenance and monitoring. All we need from PPA clients is the monthly solar-energy bill payments.

Can I get a annual payment for letting you use my roof?

Possibly; each situation is different, so please contact us to discuss.

What happens if the system gets damaged or stops producing electricity?

In the unlikely event that this happens, you would not be liable for any of the loss since you only pay for the electricity that your solar system produces.

What are typical terms for a PPA?

Most terms can typically be negotiated and range from 15 – 20 years. The rates vary based on state but are typically less than what you would otherwise pay the traditional utility company. For example, a PPA in Massachusetts might only cost 10 cents per kilowatt hour, when the retail price of electricity is closer to 20 cents per kilowatt hour. Each PPA typically has a 1-2% annual escalator to keep up with inflation.

What type of credit is required for a PPA?

Typically, PPA customers need to be able to provide audited financial statements or have a debt rating of BBB or better. The solar system owner will want to be confident you are going to continue to make energy payments for the term of the PPA.

General

What is net-metering?

Almost all utilities are required by law to offer net-metering, which effectively allows you to bank your solar energy until you need it. Net-metering allows you to send back any excess generation you do not use onto the grid. Net metering continues throughout the year and seasons, so you can build credit in the summer for darker winter days. It measures the difference between the electricity you buy from the utility and the electricity you generate with your solar electric system.

When you are making more electricity than you are using, your extra electricity automatically gets metered back to the utility grid for use at a later date. Essentially, net-metering allows you to use the electric utility grid like a bank account. You can put electricity into it that you don’t use immediately, and you can withdraw the same amount later on at no net cost to you.

How much energy will my system produce?

Your kilowatt-hour production will depend on several variables: amount of sunlight, size of system, and panel efficiency. A good rule of thumb for the Midwest is 1,350 kwh/year for each kilowatt. In other words, a 25-kW system will produce approximately 33,750 kWh/yr or 2,813 kWh/month.

What if my roof gets a lot of shade?

Shade reduces the amount of sunlight your solar panels receive and consequently reduces the electricity your system will produce. Our solar-design team will conduct a shade analysis and work to position your panels where they can get maximum sun exposure. However, on occasion, a roof may be too shady to make solar feasible.

What happens when it is cloudy or at night when there is no sun?

The amount of energy your solar system generates is directly attributed to the amount of sunlight it gets. As a result, it will produce slightly less electricity when it is cloudy. Surprisingly, the sun shines through the clouds and still produces electricity though.

Your solar-panel system will be connected to the utility grid, so you can draw energy from the grid when your solar system is not producing solar energy. You will never experience any power interruptions because of solar.

What size system do I need?

The size of your solar-energy system will depend on several variables: utility usage, size of roof, shading, budget, and your local market. We typically install solar-power systems between 20- and 100-kilowatts for our commercial clients. Many times, the system size is dictated by the state incentives. For example, in Missouri, solar-power rebates are capped at 25 kilowatts per account. As a result, most commercial systems are 25 kilowatts. In our East Coast markets, commercial systems are usually much larger as the cap is typically greater than 1-megawatt.

What about my flat commercial rooftop – how do you attach the panels?

Most of our commercial installations are self-ballasted, meaning they are weighted using no attachments. We engineer the tilt to be slightly lower so there is no lift-off in the wind, and of course ensure your roof is structurally sound enough to handle it.

Do I need batteries?

99% of the time, the answer is no. Battery systems are typically expensive and only make sense for buildings in very remote locations, far from the utility grid. Our systems are typically connected to the grid. In Missouri, in order to qualify for your utility’s solar-energy rebates, you must be connected to grid.

What percentage of my energy usage will solar panels provide?

That depends on how much energy you use, your project budget, and the available roof or ground space. In general, you can expect to offset 10 – 30% or more of your energy bill. If your business is very energy efficient, you can expect more. Our solar specialists will provide a complete analysis of your particular situation.

Will my Homeowner’s Association allow solar panels?

Usually it is fine, but you’ll need to check.  Sometimes there are restrictions on what can be placed on the street facing side of the home.  We are happy to help educate your HOA about solar.  Most restrictions do not hold up in court.

What direction should solar panels face?

Solar panels are most efficient when they are perpendicular to the sun’s rays. The best angle would be about your latitude (plus or minus a few degrees) and the panels would follow (track) the sun during the day for the most efficiency. For practical purposes, we usually recommend fixed tilt arrays pointed as close to true south as possible. Tracking the sun adds up-front cost and maintenance later on. Efficiency gains are usually not great enough to make up for these extra costs.

Should I install a wind turbine or solar panels?

After many years of experience, we at Brightergy have come to the conclusion that in most cases solar is the best solution. Solar panels provide more power at a lower price in almost every state. They have no moving parts and 25-year power production warranties vs. 5-year warranties for most wind turbines. Many of our utilities also offer extra financial incentives for solar-energy installations, but not for wind-energy systems.

Will a solar array increase my insurance rates?

It depends on the size; larger commercial solar-energy installations may see an increase, therefore, it’s best to check with your carrier.

Can my commercial solar panels be damaged by hail storms?

Solar panels are tested and certified to withstand hail using tempered glass. If a panel is ever damaged, it is covered by your commercial insurance, and we will replace it.

How does solar energy benefit the environment?

Solar-photovoltaic systems reduce the demand for fossil fuels, thereby reducing pollutants and carbon-dioxide emissions.

Is solar electricity really a good investment?

Yes, solar energy provides excellent ROI and is eligible for tax rebates. Over the lifetime of the system, you will realize significant energy savings. After incentives, most systems pay for themselves within ten years. After that, you produce free energy for the life of the system.

Do I need a new roof before solar panels can be installed?

No, most solar-panel systems do not require a new roof prior to installation. However, because solar panels have an expected life in excess of thirty years, roofs need to be in decent condition; it does not make sense to remove and reinstall solar panels after only a few years.

After your panels are in place, they will greatly reduce the wear on the roof by blocking ultraviolet (UV) rays, snow, and ice from striking the roof.

Some solar systems have received IRS rulings that allow you to receive a 30% Treasury Grant for the portion of a roof where solar panels are installed. In other words, if you install an eligible solar system over 50% of your roof, you will qualify to receive a 30% Treasury Grant on half of the cost of your new roof.

What happens if solar panels get covered by snow?

Solar-electric panels need sunshine to generate power. While some sun does make it through several inches of snow, little electricity is generated when the panels are covered with anything. However, because solar panels operate at a much warmer temperature than the outside air, the snow will melt off of your solar panels and your system can continue generating electricity.

How much weight does a solar-photovoltaic system add to the roof?

A system typically adds 3 – 4 lbs per sq. ft., so 95% of roofs are able to support solar panels. We have our structural engineer evaluate each roof before we will install solar-panel systems.

What kind of maintenance is required?

Luckily, solar-energy systems require very little maintenance since they have no moving parts. Rainfall typically keeps solar panels clean, but you should rinse them off with a hose in case of drought. A good rule of thumb for cleaning your solar panels is to do so if you notice a good deal of dust or pollen on your car.

How long do solar panel systems last?

Most solar panel manufacturers have a 25-year warranty. Most inverters carry a 10-year warranty. There are solar-photovoltaic (PV) systems that were installed in the 1970’s that are still around today.

How does solar energy work?

Solar-photovoltaic panels convert sunlight directly into direct current (DC) power. An inverter converts this DC power into alternating current (AC) power that can be used in your building. The solar-panel system is interconnected with your utility provider; during the day, if your solar-energy system produces more electricity than your building is using, your utility will allow net-metering, or the crediting of your utility account for returning the excess power to the grid.

The utility provides power as usual at night, and during the day when your electricity demand exceeds that produced by your solar-energy system.