The following is a blog written by Kacie Peters, Sales Director- Mountain Region at Microgrid Energy:
When I entered the solar market in 2010, the world was my PV oyster. My markets in Pennsylvania and Delaware just instated generous rebates and REC prices were north of $300. Sure, solar was at $7/W, but with high electricity prices and 5% estimates on energy price jumps, who wouldn’t want to put $40,000 into their rooftop with a 20% return?!
I remember the day the PA market crashed like it was yesterday. I got a call that the rebate was oversubscribed and a waitlist was instituted. Then the RECs crashed– a $350 commodity was suddenly worth $20. I was working for a large resi company and 1/2 of our business was gone overnight. We never really recovered. When Delaware started to restructure its REC program, we once again braced for the worst.
In 2012 I moved from the profitable East Coast market to Illinois. The highs and lows there were even more erratic: Every year the rebates were available but limited, and the broken RPS created a hopeful future for RECs but there was a limited platform for trading them. When I moved into the C&I space, I would land larger commercial projects only to find out the next month that the grant award couldn’t be honored from the state because of the serious budget crisis.
Everyone who has visited a Six Flags knows sharp turns, peaks, and valleys on a roller coaster are the best way to lose your valuables, and the Solar Coaster is no different. So in September 2015 I decided to step off the solar coaster. I’m no longer content to have momentary highs with steep drops– it’s more nauseating than fun after 5 years.
….But I’m not leaving the solar industry, that ride is still too much fun. The best ticket to quitting the loop-de-loops and crushing lows is PACE. Property Assessed Clean Energy is financing that allows us to bundle the long term stable financials of solar with the quick payoffs of efficiency. Commercial projects are assessed and paid down over 10-20 years. Ownership (and tax credits) stay with the building owner and can be passed on once the property is sold. Assessments are cashflow positive Day 1 if structured correctly, even in low price markets. Commercial PACE loans are more flexible and credit-forgiving than PPA’s, and they don’t require an unsustainable REC price to make a project pencil. PACE costs the state nothing, meaning we can finally stop fighting state budget shortfalls for incentives.
Now thanks to PACE, I’m not even scared of the impending ITC cliff, which may turn out to be the Solar Coaster’s biggest drop.
Thirty-one states now have legislation that enables PACE, but only a fraction of those have programs that can work. I had to leave Illinois for Colorado to pursue PACE projects. As an industry, our policy focus should be on expanding PACE into every market. Commercial PACE is the easiest first step, as it doesn’t have the regulatory hurdles that come with the Fannie and Freddie resi sales– but we shouldn’t count out the residential market in the future either.
So I encourage you to step out of line for the Solar Coaster. Let’s stop arguing about the merits of incentives and start looking more long term. I believe PACE is our ticket off the crazy ride and into a more stable– and less nauseating– market for solar.
See the original article here.