The electricity they generate may be free, but most home- and business-owners can’t justify the upfront cost of solar
panels. A price tag of $25,000 to $50,000 for a modest system puts the cost close to luxury car territory.
So, like car dealers needing to move metal, the principals at Sestertii Solar want to move the panels using a page out of the car salesman’s handbook: Encourage customers to lease them.
The initial focus will be on small businesses, municipalities, not-for-profits and universities. The locally based company will pursue homeowners once the leasing program is refined.
“This will be a wholly new perspective on making solar scalable and sensible in Indiana,” said Antony Rhine, a principal of Sestertii, which was formed earlier this year out of a utility consulting firm operated by Rhine and Richard Witka.
The leasing of photovoltaic solar panels has taken off in California and Oregon. Companies such as Foster City, Calif.-based Solar City lease panels to home-owners for as little as $110 a month.
In some West Coast cities, that’s a deal. A monthly bill of $200 a month at current utility rates can be shaved to $60 a month, saving consumers $30 a month when the lease cost is taken into account.
Rhine and Witka face more of a challenge here. Midwest electricity is cheaper, and there isn’t much to speak of in the way of state or local incentives to go solar.
But Sestertii might be getting some help. Democrats in control of Congress are bent on passing a cap-and-trade scheme that detractors say will drive up the cost of electricity in the coal-powered Midwest.
Meanwhile, utilities such as Indianapolis Power & Light Co. are making at least token moves toward a so-called “feed-in-tariff,” which would pay an above-market rate to those who sell their excess solar-generated electricity back to the utility.
An IPL proposal pending before state regulators would offer to buy excess power at 24 cents a kilowatt hour. The rub is that the offer would apply only to those with solar systems with a capacity of at least 20 kilowatts, which is higher than what most modest systems would generate.
But “it is a good step in a direction Indiana needs to be moving,” Rhine said.
As for details such as monthly payment and cash down, Rhine doesn’t yet have them quite nailed down. He’ll provide the leasing through a program offered by a consortium of lenders and The Green Panel, a Brighton, Mich., firm that provides much of his hardware.
Rhine said two leasing scenarios have been determined. One will be akin to leasing a car, with the option for the customer to purchase the system at lease-end.
The other approach will involve the customer’s and Sestertii’s forming a limited liability corporation, in which they mutually reap federal tax incentives and depreciation benefits. That program might be more appropriate for universities, municipalities and not-for-profits.
Either way, “we are essentially striving to eliminate the upfront financial hurdles hindering our prospects from going truly green and building their own renewable/sustainable energy portfolio,” Rhine said.
Laura Arnold, executive director of the Indiana Renewable Energy Association, said she wasn’t aware of such a solar leasing program offered in the state.
While Indiana is a fast-growing state for wind generation, it is lagging in solar power.
Indiana comes up in the category of “less than 100 kilowatts or no data” in the latest solar trends report of the Interstate Renewable Energy Council.
One of the biggest applications of solar power here is at the Hilton Garden Inn at 10 E. Market St., which has solar panels on its roof. Though they provide only about 3 percent of the hotel’s power, the panels shave the hotel’s bill at peak times—hot, sunny days when air conditioners are cranking.•