As Safe As Houses

March 26, 2009

Sky Harvest
Remember when we had the idea that investing in real estate was a safe bet? It was such a commonplace idea that this would generate a return on the investment, that it became a cliche: “As safe as houses”.

Now, despite our real estate values dropping like a stone, there is still part of your building that you can use to generate a certain return yearly.

That is that abundant farmland that you have on your roof.

You didn’t know you have farmland on the roof? Northern California’s PG&E thinks so. If you have solar potential (a flat roof or 20 degree slope to the South, Southwest or Southeast with no shade) you could actually generate a decent return on investment, regardless of your declining property value, from your sunshine harvest.

You could earn 8% a year on an investment in a solar roof. How?
There is a little known Feed in Tariff in Northern California. PG&E offers a contract for solar power that they will buy from you, paying a set amount per kilowatthour for 20 years. Until I started working in the solar industry a few months ago I had no idea that PG&E will buy on a Feed in Tariff from anyone who can produce it.  While it is far from a get rich quick scheme, it is definitely a way to earn money doing the right thing.

You don’t have to be some giant business selling megawatts of electricity to PG&E  like those huge solar farms out in the Mojave.

I just calculated two spaces here in the Bay Area, one where a landlord owned a group of buildings in one neighborhood, and one on a house of worship with enough square footage to make a community center using 10,000 kwh a month completely carbon neutral. Making a building like that net zero takes a huge system; 80KW in this case. It had enough square feet available for an 80KW system; which could earn $36,000 a year, with the income repaying the system in just 11 years.

This Feed in Tariff is different from the rebate program whereby the California Solar Initiative pays an upfront payment for your solar system, at $1,550 a kilowatt ($1.55 a watt) for homeowner systems or now down to $1,100 a kilowatt for commercial buildings, and then additionally credits you back (monthly) for any excess electrons you produce thereafter, giving rise to the often-described joy of watching the meter running backwards.

This is different. PG&E’s Feed in Tariff is a straightforward sale of electrons produced. While it is far from the generous Feed in Tariff that propelled Germany’s cloudy rooftops to #1 in solar production in Europe and caused Spain to drain world silicon supplies a few years back, this is a surprisingly solid return on investment in a market where real estate is by no means a safe investment any more.

I will be describing how to use the Feed in Tariff at the Interfaith Power Information Night in the East Bay in mid April if any groups, coop members or building owners have any questions about how to get started.

(These inspiring and exuberant images of the infinite potential of the sky always make me think of a really sustainable future for us humans; that it’s possible.)  They are by Flikr User fjny