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Distributed Energy Resources

Four misconceptions about large-scale solar

When it comes to large-scale solar for utilities and municipalities, the Solar Energy Industries Association reports that there are 37,000 MW in operation, with a whopping 74,000 MW additional in development. With such widespread solar adoption, it’s clear that many believe in the power of solar. However, there’s also a lot to understand behind the scenes, which can sometimes lead to misconceptions. Here, we’ll address and correct some of the more common ones.

 

Misconception 1: Tax credits aren’t applicable and are therefore not valuable to public power

It is important to note that for-profit utilities and organizations can take advantage of the investment tax credit (ITC), while municipalities, cooperatives, and nonprofits cannot.  However, the story doesn’t end there.

When utilities that cannot take advantage of the ITC enlist a third-party solar provider or solar financier to install the system, the third party provider is often able to monetize the incentive for the utility’s benefit. Through the end of 2019, the tax credit value is 30% and declines to 10% by 2022. In addition, solar owners can deduct the depreciation of the solar array from the taxable income, further improving the project economics. These tax credits don’t serve as a “windfall” to the owner—they can help to dramatically lower the energy rate the utility pays for the solar output. So, instead of paying for the system on your own and missing out on the benefit, consider other avenues by partnering with a provider.     

 

Misconception 2: System maintenance doesn’t require a professional

Solar energy systems require regular maintenance to ensure they’re functioning appropriately. Dirt, dust, and pollen can accrue and ultimately affect a system’s efficiency. Maintaining the system yourself can end up being both a distraction to your normal operations and more expensive than you had planned. This can contribute to a decrease in your expected cost savings. Some systems require specific solutions to clean the panels and there are best practices to avoid scratches and cracks. This is where having an experienced solar partner on your side is key. They’re experienced with all aspects of maintenance  to keep your system working efficiently, including running diagnostics to ensure wiring is functioning.   

 

Misconception 3: All solar developers and partners are basically the same, so it is best to just choose the lowest price option  

On the surface, it may seem that all developers are created equal, but there are several factors that set partners apart. For starters, take a look at their experience. They should be well-versed at serving your geographic area and have experience with utility-scale installations. Also important is their focus on customer care. A quality developer will emphasize the value of building a long-term relationship with you, while also taking the time to tailor a solar solution to fit your unique needs. Finally, evaluate if they offer a turnkey approach to developing large-scale solar projects. There are a lot of details and ongoing needs that need to be addressed with projects of this size, so working with an experienced partner that can manage the risk is critical.  

 

Misconception 4: All developers are owners of solar arrays

Not all solar developers have the balance sheet necessary to construct a project, nor are they aligned with an experienced, strong financing partner to support long-term ownership of an array. This reality can present a risk when it comes to signing an agreement for an extended time. If the developer’s strategy is to sell off projects for a profit, effectively ‘flipping’ them like a house, you could potentially be left in a difficult position when it comes to ownership and maintenance requirements.

When choosing a solar partner, consider their book of business and strength of capital to determine how they typically approach long-term ownership and maintenance of their projects.

 

Partner with an experienced solar provider for your large-scale solar project.

Experience really is everything when it comes to enlisting a trusted solar provider. Partnering with a company that understands your unique needs and can customize the right large-scale solar solution can help ensure lasting value.

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