On September 27, 2011, Google announced that it was putting $75 million into financing for solar rooftops on homes in California. It is great that Google made their second investment into solar. The first investment was $280 million for solar rooftops.
It is estimated that each solar roof will spend approximately $30K per solar installation. The homeowner will not own the system since it is being funded by Google but the homeowner will purchase the energy (kWh) produced from that solar system as if Google is the electric utility for that residential meter. This concept is also referred to as a power purchase agreement (PPA) and is very prevalent around the U.S. but specifically in California, which has driven the large uptake in solar installations across the country.
We still have many states that do not allow third parties to produce energy and sell it to a consumer of that power, which in reality monopolizes the electricity system. In order to increase the market rate of solar in the U.S., we have to embrace a new economy of energy policies. A company like Google should have the ability to take their investment dollars and leverage them in the energy economy. We are poised with an increasing demand of energy needs then why not invest funds locally that can transition our need for energy to renewable sources like solar.
The California market for solar can certainly be a model for success for this country, and yes many states like to wave off California as “that is just California”. But we cannot continue to write off a progressive state that understands the rising costs of energy and is seeking solutions so consumers have cost effective choices.
On a recent trip to Hawaii for a clean energy conference, I was struck by their pure dedication in both the political and private sectors to take the state off of foreign oil. A state of islands faced with global pressures of oil prices has to make hard decisions. One staggering quote from a mayor on the Big Island of Hawaii stated that just his county spends $750 million on energy costs per year. Think about that with the average U.S. resident in a single family home spending $1600 per year on electricity. A county spending almost a billion dollars! By following the realities of what that means for an economy, they are motivated to find clean energy sources to generate electricity. Large scale usage of solar, wind, and geothermal energy are in the near future to make this a reality.
We have options to strengthen our economy by looking locally at energy options. Whether we embrace solar energy like Google or favor other methods to achieve energy efficiency, we need to make the decisions that will drive our cost effective choices today and sustain a nation for tomorrow.
Written by Ben Taube, President, EnergyFool.