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Financing 101-How to Pay for a Renewable Power System
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As renewable energy edges to new heights in the United States more people are looking at ways to personally contribute. Beyond the purchase of Renewable Energy Credits (RECs), recycling, and energy efficiency people are looking to take their action even further with the installation of Distributed Power systems such as wind turbines and solar panes for their homes, businesses, schools, farms, or facility. Distributed Power systems provide a big statement regarding commitment to clean, renewable resources at the individual level while also significantly reducing energy bills. However, these systems are not free. While they will provide you with a Return on Investment (ROI) there is usually an upfront cost or payment associated with a Distributed Power System.
As Federal and State governments realize the importance of Distributed Power systems in meeting Renewable Portfolio Standards (RPS) , they also realize that these upfront costs can prohibit installation and are taking action to help. Currently, the Federal government is offering a 30% Federal Tax Credit for small to mid size Distributed Power systems. According to an article written by Lee Devlin, of The Solar Authority a 5kW solar system would cost between $35,000-$45,000. 30% off this could mean a tax credit of $10,500-$13,500!
In addition to Federal incentives, in many states there are local state incentives. Colorado is currently working on programs to make incentives like those in Wisconsin available in the state. At present the Governor's Energy Office (GEO) is working with funds from the American Reinvestment and Recovery Act to create more robust incentive programs for solar and wind. In 2008, the GEO offered small wind incentives for those wishing to install a small wind turbine. The program was so popular in 2009 that funding was exhausted.
In addition to Federal and State monies, local utilities often offer a rebate for those wishing to install Distributed Power systems. For example, Southeast Colorado Power offers incentives up to $3,000 for solar and up to $6,000 for wind. Estes Park Light & Power offers similar rebates up to $9,000 for solar (PV'S) and up to $5,000 for small wind systems.
Another way that Colorado cities are making renewable energy systems possible at the residential and commercial level is through special assessment on property tax. In April 2009, Boulder county launched the Climate Smart Loan Program. The Climate Smart Loan Program allows residential and consumer customers to obtain low-interest loans for renewable Distributed Power systems and repay these loans via a special assessment on their property tax. Loans can be made for $3,000 minimum and up to 20% of the property value or $50,000, whichever is less. Loans like the Climate Smart Loan program mitigate these costs and often make the integration of renewable systems more feasible. This November Pitkn county, Eagle county, and several others are taking initiative 1A to voters.
In addition to municipal loans many banks are now offering "green loans" to finance programs with Distributed Power. Some companies like WYCO Energy offer financing through their parent company, Colorado Equipment and John Deere. Most financing will want to see the ROI statement for the purchase and evaluate credit history, repayment, etc before approving the loan status.
There are a number of ways to finance a Distributed Power system and the timing has never been better to take action.
Endurance S343 in Motion
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