I don’t write much anymore. Well, I write for a living now, so the idea of jumping on medium to belt out some lines hasn’t interested me for a while. I recently had what I think is a good idea for how solar energy works in America.
The world needs A LOT more clean energy if we’re to meet our goals. From my perspective, solar runs into two problems.
- There are utility companies out there that want to build more solar panels, but they need land local governments like to block them because “new stuff bad”. NIMBYs, those who ascribe to the idea that any construction in their backyard is bad, would prefer it if clean energy and housing were located somewhere else.
- The cost of rooftop solar falls mostly on the homeowner, rather than a utility company. On average, solar panel installation and the system together can run from $15,000 to $25,000. This generally requires a loan that is paid back with a profit over decades as people need cash to do it. The ROI averages around 10% of the investment.
Why not combine the two options? Look at rooftops as property in a field. When the field is purchased, the landowner gets a large sum of money. Why not pay homeowners for the right to build something on their roofs?
I work part-time as an insurance agent whose agency also sells annuity products. Simply put, annuities involve a large transfer of money to an insurance company and in exchange, the insurance company pays you a monthly check until you die regardless of how the stock market performs. There are ups and downs to this option of taking retirement benefits and annuities aren’t a good idea for everyone. They can work well for some customers in certain scenarios. The hidden side of annuities is that the commissions for them are quite large, usually 6% of the premium. So a $100k annuity results in the insurance company paying $6,000 to the agency. In exchange, the agent or financial advisor then takes care of the client’s annuity for the rest of their lives.
Utility companies should offer to give the customer a commission upfront for selling their rooftop for solar energy production under the condition that the customer takes on the minor responsibilities of keeping the company informed of any issue and leaving the panels up for 30+ years. The utility company would pay 100% of the cost of the system and a 10% commission on the cost. So a $15,000 system would result in a $1500 check written to the homeowner. Utility bills would not go down, but the homeowner would get cash (something many people want), wouldn’t have to deal with the hassle of loans or tax credits, and a massive amount of smaller solar panels would be harder to block by local governments.
If the panels are taken down, the utility company has a right to chargeback the commission, prorated based on the amount of time the solar panels were on the roof. If the home were sold, the new homeowner would take on any responsibilities of the solar panels.
