Colorado Solar Panel Residential vs Commercial

http://www.solardave.com/index.php/commercial-solar-slow-to-take-hold-in-colo...
SolarDave: How much of your business is residential verses commercial?

Cary Hayes: Colorado about 70 to 80 percent is residential and another 20 or so % would be small commercial and medium commercial.

The commercial program in Colorado has been slow to take hold for a variety of reasons. One has been some uncertainties with the rebate program there.

Xcel rebate program is divided in to three catagories: 1. 0-10KW residential program $4.50 watt
2. 10KW to 100KW is that medium commercial level, $2 watt up front rebate, but then pays 11.5 cent per kilo watt hour for the production of the system for 20 years. That is pretty interesting. We are excited to be doing a couple of products in that category right now.
3. 100KW to 2 Mega Watts (SolarDave - "power station") large commercial. This is done by RFI (request for proposal) basically come out twice a year, such as the Colorado Convention Center downtown, 1.8MW facility in Belmar neighborhood in Denver with a carport thing. Also 1-2MW at DIA (Denver International Airport) that is going in.

The medium to large system are financed through what is called a PPA (Power Purchase Agreement) which is basically a financing mechanism to pay for the system without the host customer paying anything.

For example one of the projects that we are involved in has a PPA and the host customer pays nothing up front for the system at all. Except they pay for the Kilo Watt hours that the system produces. So a large financing bank such as Morgan Stanley, Merrel Lynch, Citi Group, Goldman Sachs comes in and funds the project and the host customer pays up front costs, they just put solar panels on the building and then they pay that 3rd party that financed the system a flat rate of electricity the building generated for the system.

The benefits of the host customer are that it fixes the cost of power. So they now know what they are going to pay for power this year for the next 20 years with a built in escalator typically.

So CPA love that so they are given the visibility of what their costs are going to be when the energy costs are so uncertain, so it is a good win for them.

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