To the Editor:

I was delighted to hear that Princeton is considering installation of a PV (photovoltaic) array on the municipal garage near the library [“Bridge Closing, Solar Array Among Council Topics,” Town Topics, March 2, page one], and thought that my recent experience putting an array on my own roof might be helpful. Much to my surprise (why should I be surprised?) I discovered that Wall Street has found a way to turn my roof into their gold mine. Had I accepted their proposal I would be able to buy somewhat cheaper renewable electricity while Wall Street collected the 30 percent federal tax rebate and New Jersey state incentives (Solar Renewable Energy Credits, or SRECs) which currently are worth about 29 cents/kWh for electricity generated by the array. (For comparison, the PSE&G generation plus distribution charge is currently about 17cents/kWh.)

The key to the Wall Street financial engineering approach is that these extremely generous incentives are collected by the owner of the array, not the customer, and are never mentioned in the contract proposal.

I discovered what might be termed “a walk down the garden path” when I tried to obtain a quote for my own solar array, saying that I was interested in ownership, not leasing or any other arrangement. After much searching, one of the large national solar installers sent me a very professional, detailed proposal, but for a 20-year power purchase agreement, not ownership. In this case the homeowner pays nothing and the installer owns and maintains the array and sells the homeowner electricity at a rate below that of the local utility but with an escalation clause (2.9 percent per year in my case). Tax credits and SRECs were never mentioned.

I did some rapid calculations of my own based on the Installer’s power production projections and a reasonable array cost and found that over the lifetime of the agreement I was over $50,000 better off owning the array. This is somewhat astonishing as the array is relatively modest: 21 panels, 340 square foot, 5.67 kW ($15,050 installed cost after the Federal income tax credit). I am sure the array on the garage roof would be many times larger and thus much more profitable.

Princeton should carefully examine different contractual arrangements (one possibility: a short term, 5 year, lease-purchase agreement) for its solar arrays with the objective of capturing as much of the incentive payments as possible. An array with excellent solar exposure, such as on the top of a parking garage, may have a payback period for the installed cost of less than four years, after which SREC sales and avoided power savings would provide a steady and substantial income stream.

All such income should be dedicated to funding additional energy efficiency and fossil fuel reduction projects such as electric and hybrid vehicle purchases, EV charger deployment, and geothermal heat pumps for heating and cooling municipal buildings and schools.

For homeowners, the “Go Solar for $0 Down” plans and derivatives, including unsecured “Solar Loans,” should be avoided. If one cannot afford the installed array cost with available funds, one might take out a home equity loan. Otherwise, save your money for a few years until you can pay for the array yourself.

Alfred Cavallo

Western Way