Solar on Someone Else's Land, pt.2: Solar Farm Investment
Image credit: Convergence Energy
The other day, I posted on the spread of community solar gardens that offer everyone a chance to invest in solar panels, whether they have a suitable roof or not, and to have the energy they produce credited to their electric bill. With community solar now viable in Colorado, and possibly coming to California, it will be interesting to see how many people are willing to invest in solar on other people's land. One Wisconsin company is offering a similar idea, but a different approach—allowing individuals to funnel their money into solar farms, a few panels at a time. Would you buy panels on someone else's solar farm?Convergence Energy of Lake Geneva, Wisconsin, is offering tracker-mounted solar arrays to investors looking to buy a few panels—as opposed to the usual approach that seeks major investors only. True, buyers will not see energy credited to their bill, and the cost of entry is still significant. A minimum purchase of 3 hosted "solar towers" is required, setting you back $160,000 before government and utility incentives. The final cost to the investor comes to $79,000, after rebates, and Convergence then designs, installs and maintains the system—providing the investor with income from the sale of electricity. Assuming a 5% annual rise in electricity rates, Convergence is projecting a total return of $264,000 over 25 years, coming out at about 8% ROI according to the company's own website*.
As I argued in my post on community gardens, installing solar on someone else's land will mean missing out on many of the benefits associated with solar—most notably the sense of ownership over the power you produce, coupled with an added incentive to conserve. But there are also distinct advantages. From enabling ideal site placement, to utilizing economies of scale, to making the deployment of advanced technology like tracking systems viable, this type of arrangement makes the cheapest possible path to solar available to more people. And that can only be a good thing.
And while the math clearly shows that incentives and subsidies are central to making this a winning proposition right now financially speaking, even if you do have the money to invest, with grid parity for solar creeping ever closer, the development of diverse, innovative business models will be key to making solar accessible to the masses.
*As with any big financial decision, I would not take the company's word for it. Check with your own financial professional.
More on Community-Owned Solar and Renewables
Would You Pay for Solar on Someone Else's Land? Community Solar Gardens
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Community Solar Gardens Let Condo Owners Go Solar