One of the nation’s largest installers of residential solar panels has begun offering solar units to homeowners in North Carolina, saying it has figured out a way to circumvent the state’s longstanding restrictions on renewable energy production.
Oakland, Calif.-based Sungevity specializes in financing arrangements that are illegal in North Carolina. In other states, Sungevity typically owns the solar panels on a homeowner’s roof. Here, however, solar installers are prohibited from owning solar panels on a private home and selling the output back to the homeowner.
Sungevity said it has created a workaround that will have the financial benefits of its leasing programs in other states, except that North Carolina homeowners will own the solar panels.
“The solution we have for North Carolina is unique in North Carolina,” said Sungevity co-founder Alec Guettel. “This is a brand new invention for the market.”
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Sungevity’s services are sold through Lowe’s hardware stores, and Lowe’s is a financial investor in Sungevity. In March and April about a dozen Lowe’s stores in the Triangle will have Sungevity reps promoting residential solar panels.
Sungevity’s online calculator, called iQuote, will show customers if Sungevity can underprice Duke Energy or another utility. The calculator will compare the homeowner’s average monthly utility power bill with the best flat monthly rate Sungevity can offer.
North Carolina is a ready market for residential solar developers because it offers a 35 percent state renewable energy tax credit on top of the 30 percent federal tax credit to offset the cost of solar panels. North Carolina is ranked fourth nationally for solar farm development but has lagged in residential solar adoption.
North Carolina’s utility law is frequently cited by solar advocates as an example of a public policy that serves the interests of the state’s utility monopoly. The law restricts ownership of power-generating equipment to licensed utilities and to wholesalers that sell power to the utilities.
Private citizens and businesses can own solar panels and wind turbines, too, as long as they sell the power output to their utility or generate electricity for personal use.
Solar advocates have been trying for years to get around North Carolina’s restriction with innovative financing proposals that essentially dress up a loan as a lease. Not a single proposal has been tried here after facing questions in an informal review by regulators, said Gisele Rankin, a lawyer with the N.C. Public Staff, the state’s consumer advocacy agency on utility matters.
“People try real hard to get around the limitations,” Rankin said. “You wouldn’t believe the ideas run past us where they look like it’s OK and it isn’t.”
Sungevity has not submitted its financing model for review by the Public Staff. It won’t be clear whether the company’s approach is legal until the first Sungevity customer files notice with the N.C. Utilities Commission.
“You can call it a loan but it depends where the risk of loss is, whether you’re getting paid based on power output,” Rankin said, citing red flags for dubious schemes.
Sungevity’s Guettel said in North Carolina the homeowner will own solar panels through a 20-year loan. The loan will be arranged by Sungevity through its partner Mosaic, also in Oakland.
“No one yet has cracked the code on solar financing for customers so that they can pay as they go and start saving money immediately,” Guettel said.