Renewable energy dividends promote investment in solar

How much do businesses pay for power every month? $1,000? $5,000? $10,000? Imagine the impact if commercial real estate owners installed solar panels on their roofs and could sell the power they generate back to the utility for a profit.

That is exactly what Gainesville’s new Renewable Energy Dividends program makes possible in their service area. It is also exactly the kind of policy we need statewide to provide additional income to business owners and investors, increase jobs, reduce our dependence on foreign oil, help the environment and directly increase the value of both residential and commercial buildings.

Renewable Energy Dividends, also known as Feed-in Tariffs in Europe, are an incentive that allows businesses, homeowners, farmers, churches, schools and others to become profitable producers of renewable energy.

Under a REDs policy, businesses can install solar, wind and other renewable energy sources on their rooftops or land and then produce electricity, which is sold to the utilities for a profit. It has been implemented in countries such as Germany, Spain and Denmark to promote what has been the fastest, cheapest and widest growth of renewable energy the world has seen.

The beauty of Renewable Energy Dividends is that it enables commercial property owners, or anybody with a roof or a piece of open land, to invest capital into solar with a predictable return. With Renewable Energy Dividends, solar enhances the value of a property with minimum risk, and the extra income can be used to offset rising expenses. A referendum passed by the state last November guarantees no increased tax assessment on the property.

Renewable Energy Dividends work by providing a guarantee to anyone who produces renewable energy that they can connect to the power grid and sell their power to the utility company at a far higher rate than the utility sells power for. The contract is a straightforward agreement stating that the utility will buy the power produced at a long-term agreed upon price.

In Gainesville’s case, the program guarantees that the utility will buy all of the electricity produced by solar electric systems at a fixed rate for 20 years. This rate has initially been set to $0.32 per kilowatt. Gainesville Regional Utilities intends to pay for the higher prices of renewable energy by spreading the cost among all their customers, with an estimated cost of 40 to 90 cents per month to their rate-payers. They have implemented a four megawatt cap per year to keep the costs down for their customers.

The Gainesville REDs program is so widely successful that they reached the four-megawatt first-year target on its first day. Such success should send a loud and clear message to the Florida Legislature that this is the kind of innovative solution Floridians want.

Given the current economic and political climate, innovative solutions are what the state legislature is looking for. While Gov. Charlie Crist’s mandate would require state utilities to get 20% of their power from renewables by 2020, there is currently a deficit in the state budget. A statewide Renewable Energy Dividends policy, however, would help achieve the governor’s goal without using any tax dollars. The market would determine where and how much renewable energy is produced - and would determine how to finance it using private funds.

As the state’s legislature meets this year, Renewable Energy Dividends will be on the table as the most cost-effective way to increase solar energy and other renewables as viable sources of energy in the Sunshine State. The program’s success in Germany and most recently in Gainesville speaks to the great opportunities it presents.

Local solar system integrators, like QuickBeam Energy, have seen great interest on the part of commercial real estate owners, farmers and even homeowners in the REDs program. While solar power systems can have attractive returns on investment with the current state grant program, which grants commercial property owners a rebate of $4 per watt up to $100,000, businesses still assume the risk of the state program not being fully funded, combined with the uncertainty of future energy prices.

Financing solar systems under such circumstances can be a challenge. Renewable Energy Dividends completely remove those risks by fixing the rate paid for energy produced. It also makes financing the systems quite attractive, by providing a guaranteed revenue stream that can be borrowed against easily.

The Florida Alliance for Renewable Energy is a group of business owners, organizations, individuals and policy makers committed to giving Renewable Energy Dividends a fair shot by educating policy makers and organizing Floridians into taking action. You can learn more about REDs by visiting FARE’s Web site at www.floridaallianceforrenewableenergy.org.

Lynnette Acosta (lynnette.acosta@QuickBeamEnergy.com) is director of marketing for QuickBeam Energy LLC, a solar system integrator based in Winter Haven.