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As the price of solar has plummeted and leases have become more widespread, many more Americans have been able to go solar. But what about the 75% who can’t?

More options are emerging for solar for the rest of us — including Mosaic’s new online marketplace, which is making it possible for people to invest in community solar projects and earn solid returns.

This three-part series profiles some other startups that are paving the way to spread solar to all.

Just across the bay from Mosaic in San Francisco, three young entrepreneurs are finding new ways to crowdfund solar projects — and include the 75%. Not content to wait for someone else to do something, they’re taking matters into their own hands, rolling up their sleeves, and making projects happen.

A revolving fund that grows quickly

Andreas Karelas founded RE-volv in 2011. He started the organization, he says, “out of a sense of frustration felt by many of us working for clean energy. The change isn’t happening fast enough and if it’s going to happen now, we’ll have to do it ourselves. There’s a huge opportunity here to mobilize people who care about renewable energy to take meaningful action that will help deliver renewables to more and more communities.” RE-volv’s mission is to empower people and communities to invest collectively in renewable energy.

What makes RE-volv unique is that they’re using crowdfunding to create a revolving fund for community solar installations. This fund is crucial in supporting the organization’s mission.

RE-volv uses a solar lease model for their community solar projects, and they get revenue from the lease payments. Because they fund projects through donations, rather than financing, RE-volv doesn’t have to pay back lenders. And being a nonprofit, they can invest their lease earnings in the next project. So the fund for their projects can keep growing.

RE-volv is currently crowdfunding for the final $10,000 needed to pay for their first solar project, thus launching the revolving fund. The campaign, which will run through January 20th, is being hosted on Indiegogo and can be accessed at www.solarseedfund.org.

Based on current numbers, once 14 systems are in place, the annual revenues from those will generate a new system of the same size and cost. At some point that will equal two more systems a year, then three, and so on. The potential for the fund to grow is huge.

Empowering the 75%

RE-volv will take tax-deductible donations from anyone but is focusing in particular on people who care about renewable energy, who want to see more solar but can’t get it themselves. These people want to help start tangible projects that they can see in their community. And donations can be of any amount, which allows even those on a budget to participate.

Although donors don’t get a return on investment in the usual sense, Karelas likes to think they get a different kind of return. And it’s a substantial one: “If you donate $10, through the revolving fund that becomes $30 to invest in the next project. So you’re looking at a 300% return on money invested — not for yourself, but for more solar projects. If you donate $25 now, over the 20-year lease period that turns into $100 that you’ve invested in solar.” This can be especially empowering for those who can’t afford more than a small donation.

Empowering communities

RE-volv hopes to put solar on community centers that have a reach, in order to educate as many people as possible in the area about solar. In addition to nonprofits, Karelas is looking at coops that own their own space and serve as a community center — and even condo complexes. For the most part, RE-volv is working with a niche market that’s neither residential nor commercial. These organizations may have a hard time finding a solar lease partner, and RE-volv can provide the solution for them.

Because many nonprofits and community-serving organizations don’t own their building, Karelas is exploring the possibility of a lease agreement with landlords, where the the landlord and tenant would have a separate agreement to cover paying the bills. He realizes that to work, this has to be made easy for both landlords and tenants.

The typical model for their projects is that a community center leases the system from RE-volv, who owns it and maintains it. The community center pays for the lease with a small escalator, and saves money from year 1. And what’s more, at the end of the lease term, RE-volv hands over the system to them, at no cost.

RE-volv is currently working with a number of community centers on project proposals. The first project will pay for three more of a similar cost and size in the 20-year lease period.

Planting a solar seed in the community

RE-volv is not content with just making projects happen. They also want to use those projects to help reverse misconceptions about solar. Karelas notes, “I tell people how great solar is, and how there are solar leases and PPAs that allow people to go solar and save money, and people say, ‘Wait a minute, if this is the case why isn’t everybody doing it?’”

Demonstration projects in communities can help show that solar is affordable and provide a way to educate community members. Events during fundraising and at installations will also help involve the community and get the message across.

This kind of outreach and education will help make it  easier to replicate the RE-volv model — and that’s an important goal. While there are other startups working on similar initiatives, Karelas is confident that RE-volv will succeed and doesn’t see these organizations as being in competition. Instead, he shares information with them in service of his larger mission: to show that solar works and pave the way to spread solar everywhere.

How you can get involved

You can contribute to RE-volv on their website, where you can also sign up for their mailing list. They also have volunteer opportunities, another great way to contribute.

This post is part 1 in a 3-part series on solar crowdfunding models in California and was originally published at Mosaic.

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As part of my research on getting a solar PV system for my San Francisco condo complex, I thought I’d look around and see what other condos have done. (I’m especially interested in condos that share roof space, which presents extra challenges.) With the whole Internet at my disposal, I expected to encounter the usual information overload. Instead, I found that very few condos have managed to go solar.

Existing solar condos

Of the few condos in the U.S. that have incorporated solar PV (a handful of others use solar thermal), many are new developments rather than existing ones, and they’ve emerged only recently. Some examples:

  • In 2010, a small set of 8 luxury condos with solar went on the market in San Francisco.
  • A 21-unit complex in Austin built in 2009 incorporated solar for the common areas as well as many other green features.
  • Also in 2009, a 60-unit LEED-certified complex in Denver offered “solar mortgages” to those who chose to power their new condo with solar—and the condos sold like hotcakes, even in a bad market.
  • In 2008, 3 renovated condos for sale in Washington, D.C., were said to be that city’s first solar condos.

As sparse as the examples are of new condos with solar, I had to dig even more to find existing condos that have gone solar. Some condos and co-ops in New York have used creative budgeting to purchase solar systems that would eventually save money. A large California development added solar for their common electricity, funded in part by money they raised recycling paper and cans. And a few condo owners have managed to purchase solar panels for their own units: one couple in Chicago funded their system by asking for donations as wedding gifts, with the balance offset by rebates and tax credits. They had a surprisingly easy time dealing with their condo homeowners’ association. But many others have been unable to do what they did; success with this option depends not only on affordability but also on a cooperative HOA board and adequate and available roof space.

Challenges and options for condos

Condos face unique challenges in going solar. Taller buildings may not have enough roof area to provide solar for the common electricity, let alone all the units. If space is not an issue, financing generally is. A system for a condo complex can be prohibitively expensive, and most HOAs don’t have the extra cash to invest (or to pay for a loan, if they can get one), even if the system will eventually pay off. Taking advantage of rebates and incentives is complicated, since multiple owners are involved. Legal issues and condo regulations can also get in the way.

Using a PACE program, something we considered, adds even more complications. These programs allow homeowners to finance solar and other energy-efficiency improvements through loans that are paid back as part of owners’ property taxes, making them tax-deductible and therefore more affordable. But in a condo development there are multiple owners, and they can’t all be forced to opt in to the program. Condo HOA boards, like ours, are likely to find the situation too complicated legally—no condo has yet used a PACE program in San Francisco, and I don’t know of any in other parts of the country. For now, the issue is moot since the programs are on hold indefinitely.

An option for homeowners without enough cash for a system, and one that we considered since our relatively new HOA doesn’t have extra cash, is a lease. Though we’d be committed to a 25-year contract, this option comes with no upfront costs and very quick savings: as energy costs rise every year, the cost for 50 – 60% of our common electricity would be controlled. And after 25 years, we’d own the system. But leases are hard to come by, since solar companies need investors to finance them. And it’s only worth it for the investors if certain incentives are in place. In our case, because those incentives end this year, we don’t have enough time to thoroughly review and approve a contract for a lease.

The future of solar condos

Even as we consider a lease, we need to think ahead to future possibilities. A solar system will likely last over 25 years, so would we be better off waiting for improvements in the technology than being stuck with a system for that long? More efficient panels and solar film are already available, but for now not readily available or affordable. Current technology has been in place since the 1960s, and systems installed then are still producing energy. So waiting doesn’t seem productive — while we wait we wouldn’t realize any savings, and more important, climate change won’t wait for better technology.

One emerging trend for condo and apartment dwellers (as well as homeowners with roofs not suitable for solar panels) is the solar garden or solar farm, a community-owned solar installation in a location other than the owners’ homes. The gardens can be on the roofs of nearby schools or other public buildings that have sufficient space and sunlight for a solar array, or even on otherwise “unusable” land. Not only does this allow many people to get solar who otherwise could not, but it lowers costs because the panels are bought and installed in bulk. Many solar gardens claim to be the first, which points to the fact that the installations haven’t received much press. But they’ve been around for at least a few years in the U.S. and longer in Europe.

For solar gardens and other solar options for condos to work, it’s key for both federal and state legislation to support them. Some states already have favorable legislation in place, and more is on the horizon. Laws are changing to help promote solar for multi-unit dwellings. There’s a shift from requiring that each solar system use only one meter to the idea of virtual net metering, where multiple homes use power from a single installation and are charged according to varying formulas.

In the course of my research I’ve not only scoured the Internet but also consulted with groups and individuals who work in solar or are experts on condos. I’ve been surprised at the scarcity of information and options for condos. With growing numbers of Americans living in multi-unit buildings, many of them in condos, it’s crucial to make solar available to them as well as everyone else. While I’ve been disappointed by the dearth of information and examples on solar for condos, I’m encouraged that more people are asking about solar for condos and finding creative, innovative solutions. And more laws are facilitating these solutions. I hope this will be a growing trend and that soon, anyone wanting solar for their condo will have a clear, easy path to achieve that goal.

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The White House is finally installing solar panels! President Carter put panels on the White House in 1979—but like many of the positive changes Carter made, this one was reversed by Ronald Reagan, who had the panels removed. The Obama administration may prefer to avoid comparisons with Carter, but let’s hope any negative connotations are overridden by the positive aspects of this symbolic gesture. By promoting solar power and other types of renewable energy, Obama can help create jobs, protect the environment, and decrease our dependence on foreign oil—all in one blow! A true strategic initiative.

In typical fashion for the federal government, it will take a while to get the panels installed; they’re expected to be in place by late spring. I’m dealing with a government of my own, though on a smaller scale, at my HOA. We have budget issues and processes we must follow, and unlike the federal government, we’re run by volunteers who have full-time jobs. But it would be great if we, too, could have a system in place by late spring. The race is on! And even if we don’t beat the White House, I’ll be glad to get to the finish line.

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As I noted in previous entries, getting a solar system for my condo complex will be a long process. I’ve had representatives from four solar companies assess our site, and they all said we have enough roof space for a system that would provide energy for the common electricity—on which we spend about $2000 a month. Three of the companies have submitted preliminary proposals for systems that would cost between $74,000 and $450,000, before incentives and rebates. We’ll have to decide how big we want our system to be and what we can afford.

The remaining challenges are a) determining which incentives we qualify for, as a condo, and b) determining how to finance the system. The HOA just doesn’t have the money to put into such improvements. Our answer to that may be a program sponsored by the San Francisco Mayor’s Office, GreenFinanceSF. They’re providing a way to finance sustainable building improvements with 20-year loans that are paid back as part of property taxes, which are tax-deductible. That makes payments affordable.

The Mayor’s Office has not yet applied this program to condominiums, and they’re eager to work with us to help encourage others to follow suit. There’s still a lot to work out. We can’t force all residents to opt in to the program, so the HOA board is researching our options. Are we allowed to lower HOA dues for those who do opt in and raise them for those who don’t? That would be necessary for this program to be financially feasible. The good thing is that this would cover more than solar panels; we’re also looking into electric-car plug-ins, tankless water heaters, LED lights, and energy-efficient windows.

But a recent development puts a wrinkle in this plan: Fannie Mae, Freddie Mac, and the lenders they work with have said that they will not support loans under the GreenFinanceSF or PACE programs. Because of that, GreenFinanceSF and many similar programs have been suspended. The Mayor’s Office and other local governments around the country are working with Fannie Mae and Freddie Mac to encourage them to reconsider their position. In the meantime, we’re faced with more waiting, during which we have time to ponder the benefits of patience. At least the sun isn’t going anywhere!

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Partial view of the Sierra Heights roofs. The block to the north has four houses with solar panels.

As I stood on the roof of our condo complex on a recent sunny day, I could see the roofs of several blocks to the north and east of our three buildings. We live in one of the sunnier areas in San Francisco, so perhaps it shouldn’t have surprised me to see four roofs with solar panels on one block, three on another, and three on the third. But San Francisco is unusual this way; according to the representative from a Fremont-based solar company who stood with me on the roof, more people in San Francisco than in Fremont choose solar, though Fremont is sunnier.

Why isn’t solar more widespread? For many, it’s just not affordable; for others, it’s not worth it. A friend living in a small house in Berkeley tells me her total monthly PG&E bill is under $20, so she wouldn’t be able to realize any savings or even break even in the foreseeable future. But for anyone with an electric bill of a certain size (roughly about $75 a month or more), solar is becoming more attractive. Federal, state, and city incentives can cut installation costs by a third in San Francisco, and most systems pay for themselves and start saving money for their owners long before the 25 years they’re generally guaranteed to last. (Keep in mind that the systems are expected to to outlive that guarantee, and most last quite a bit longer even if they start to lose a bit of efficiency.) You can use this solar power calculator to get a quick general idea of how much you might save.

Some time ago I saw a show on TV about a Napa winery that was installing solar to cut costs. Their challenge was keeping the wine barrels cool in the summer, and while they liked the idea of going green, their motivation was cost savings. This was at least a few years ago, before many of the current incentives. It struck me that we need more news about this kind of project. If more people knew that solar could save them money, more individuals and companies would turn to it.

View to the east, and more solar panels.

So now I’ve started a Green Committee at my condo complex, and I’m researching whether we can get solar panels installed. We have three large buildings with plenty of roof area, though it’s probably not enough for both the individual units and the common electricity. But we spend about $1500 a month on the common electricity, so even if we concentrate on that, depending on the system, we could save an estimated $500 – $1000 a month over 25 years—that’s $150,000 – $450,000 total.

Our main challenge will be financing. Since our HOA is a nonprofit, we may not qualify for some tax incentives. If the upfront costs are too high for our 4-year-old complex, which doesn’t have large reserves built up yet, we might be able to get some kind of financing. Another option is to lease the panels; that could allow us to get the system installed, but it wouldn’t give us the advantage of ownership and increased property values. A lease-to-own option would be even more attractive.

We’ll need to do further research to see what might be feasible. Another Green Committee member is looking into green financing programs in San Francisco. And I’m in touch with several solar companies who are helping us determine what our options are. Stay tuned for more on this blog!

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