Wednesday, September 21, 2011
Clever solar power project
One of my friends bought the units outright (After the 70% rebate) and expects to pay it off within seven years.
But look at this new project being financed by the likes of Richard Branson. It was detailed in this recent article in the Times. The process is complicated: read below for how it works. Essentially, the owner of the old building gets a loan for upgrades that result in energy savings. The building is worth more so property taxes are raised. The interest in the loan plus the additional property taxes are less than the savings he recoups. Pretty simple, huh?
Ygrene and its partners will gain exclusive rights for five years to offer this type of energy upgrade to businesses in a particular community. They will market the plan aggressively, helping property owners figure out what kinds of upgrades make sense for them. Lockheed Martin is expected to do the engineering work on many larger projects.
The retrofits might include new windows and doors, insulation, and more efficient lights and mechanical systems. In some cases, solar panels or other renewable power might be included. For factories, the retrofits might include new motors or other gear.
Short-term loans provided by Barclays Capital will be used to pay for the upgrades. Contractors will offer a warranty that the utility savings they have promised will actually materialize, and an insurance underwriter, Energi, of Peabody, Mass., will back up that warranty. Those insurance contracts, in turn, will be backed by Hannover Re, one of the world’s largest reinsurance companies.
As projects are completed, the upgrade loans, typically carrying interest rates of 7 percent, will be bundled into long-term bonds resembling those routinely issued by governmental taxing districts. Barclays will market the bonds. Retirement funds have expressed interest in buying these bonds, which will be repaid by tax surcharges on each property that undergoes a retrofit.