Financing

Broadly speaking, there are two paths to financing an installation for your street: Either you come up with the money yourselves, or you use your collective bargaining power to get low rate external financing for the project.

The first of these is nice and simple. However, in this economy we haven’t found many communities where half the residents are affluent enough to spare 6 to 10k each. We’ve left a few notes about self- financing at the end, but we’re concentrating on how to pull in financing on this page.

As a side note, our organisation is based in the UK where the government pays a Feed in Tariff (FiT) of 43p (roughly $.70) per kWh you generate. The resulting payments are enough to repay financing on the cost of your system – if installed efficiently. We realise that not not all of our worldwide readers will have access to a similar scheme, so apologise if the following section is not 100% relevant. There will certainly still be advantages to using collective bargaining power with a financial organisation, however it may be necessary for you to wholly or partly make the payments to the financer. These could be lower than your electricity bill at the moment, however in the UK we are starting from a baseline of free solar energy, and aiming to make homeowners a decent return from the FiT on top of this.

Bargaining Power

When ten homeowners approach a financial organisation to fund a solar street they can boast something that a single homeowner cannot – security. If one installation were to stop working for any reason, the other nine will still create enough government guaranteed income to continue to pay off the bank. Meanwhile, the single homeowner would firstly have to convince the bank that they are a minimal risk, but would still pay a “risk” interest rate – meaning there will be less money left over as income.

Now, you and I know that there is an extremely low rate of failure in PV systems. The hardware regularly comes with a manufacturer’s 20-year warranty, and almost all the systems installed 30 years ago are still in operation. However, it’s the bank’s job the take due precautions, so they want to be sure that if one house on the street did fail they’d still get paid their full amount.

In order to guarantee the bank this, you want to form an organisation which can contract with them, such as a Co-operative, an Industrial Provident Society or a Community Interest Company.

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