CARBONDALE - A Roaring Fork Valley entrepreneur is working on a plan he predicts will revolutionize the local renewable energy movement by making solar power more affordable for thousands of property owners.
Paul Spencer is heading a small group of investors in the Clean Energy Collective, a for-profit organization that wants to develop up to six solar farms in the region, then sell ownership of panels within the arrays to customers of Holy Cross Energy.
The plan is intended to attract customers who support the concept of solar power but cannot install solar panels on their homes or businesses, Spencer said. Some property owners face political hurdles, such as hostile homeowners associations. Others face physical hurdles, like inefficient orientation or mature trees that provide too much shading.
The Clean Energy Collective, or CEC, wants to build centralized solar farms ranging from 80-kilowatt to 2-megawatt systems in Eagle and Garfield counties. A 2-megawatt array would place roughly 10,000 solar panels on 7 acres. It would be about 13 1/2 times larger than the valley's largest solar farm, a 150-kilowatt system at the Colorado Rocky Mountain School campus in Carbondale.
"This is a significant evolution in solar energy production originating right here in Carbondale," Spencer said.
He wouldn't disclose exact sites for the proposed solar farms because CEC hasn't closed on purchases or received governmental approvals yet. He expects purchases and approvals to occur later this spring and summer.
CEC's plan is to sell interests to property owners who want to offset some or all of their electricity consumption. A property owner would currently pay about $12,250 for 5 kilowatts of production ownership at the solar farm, Spencer said. That's the cost after applying all available rebates and tax credits currently available.
Steve Casey, who heads renewable energy projects at Holy Cross Energy, confirmed that the utility is working with Spencer on the CEC plan. "It's a very unique and promising relationship between the utility and CEC," Casey said.
Holy Cross Energy has agreed to credit the customer's account for that production - essentially striking it from the monthly electricity bill.
"You get credited on your utility bill just like it was sitting on your house," Spencer said.
CEC can provide solar power to its buyers for less than they would spend to install a solar photovoltaic system on their home, simply because of economies of scale. "We're aggregating everybody's efforts," he said.
A 5-kilowatt home solar-electric system, which is a typical size, would cost about $22,500 to install after all available rebates and tax credits, by Spencer's calculations.
Spencer said he isn't trying to talk homeowners out of installing individual solar-electric systems. Some people want solar panels on their homes "as a badge of courage," and he understands that. If they can make it work financially and physically, he is all for it. But for the majority of property owners, it makes more sense to buy into the collective, he said.
Spencer said the CEC model will spur a "quantum leap" in participation in solar electric. Spencer estimates it could increase the region's solar adoption by 67 percent in the next five years, based on assumptions on interest and demand.
While there are a minute number of people who want solar power to help save the world, most people need a proposal to make "cents sense," Spencer said. "Money is always the bottom line."
He believes his model makes sense for people. They purchase their solar system for a fixed rate. Their initial purchase also covers operations and maintenance of the solar farms, which CEC will tackle. Escrow funds will be handled by a third party.
If a buyer moves, they can sell their interest back to CEC at the current market rate, sell it to the next buyer of the property or move it with them to their new property if it's within Holy Cross territory.
Holy Cross and CEC are "well under way to complete negotiations on a power purchase agreement," Casey said. The agreement will provide a guarantee for Holy Cross customers that they will get credited for their power purchases from CEC. Holy Cross would buy electricity from the solar farms, then individual owners would get a credit from Holy Cross for their share on their monthly bills.
The advantage of the partnership for Holy Cross is it would boost its renewable energy portfolio. The utility is required by Colorado law to have 10 percent of its power mix from renewable sources by the year 2020, Casey said. Its internal goal is to have 20 percent renewable energy in its mix by 2015.
Casey also believes CEC provides a great opportunity for individual consumers who support renewable energy.
Spencer said his research indicates the energy collective is the first of its kind - where property owners buy an ownership interest rather than power produced. Even though it's a good idea, the legal hurdles presented by state and federal tax laws and technical issues in coordinating with the utility were formidable, he said.
Spencer, a former software developer, said he worked with former colleagues to create the software needed to help Holy Cross credit its customers for their solar-farm interests.
CEC hopes to be in position to start collecting refundable down payments for ownership interests in its solar farms by next month. Sales of a certain percentage of interests will allow it to start construction. It could be producing power for its initial round of members by the end of summer, Spencer said.
More details on the CEC model are available at the company's website: www.easycleanenergy.com.