Blog : Local Solar expert sees promise in PPAs

By Sam | Mar 21, 2014 | in

By Jim Cavan

Though the cost of solar technology has been on a gradual decline for years, the size of the investment, coupled with a stalled economy, has kept the calculus constrictive—particularly for small businesses.

Jack Bingham, owner of SEA Solar Store in Barrington, thinks he might have a solution.

It’s called a power purchase agreement (PPA), and it’s slowly changing the way businesses are approaching the prospect of going green by virtually eliminating the up-front cost.

Here’s how it works: Rather than pay for the system outright and recoup the savings over time—typically from seven to 10 years—purchasers instead pay the equivalent of a monthly mortgage, while saving on the cost of their utility, be it hot water or electricity, in real time.

Bingham intends to use Barrington Power, a new venture committed exclusively to PPAs for small businesses, to trumpet the merits of small and medium-sized systems—essentially, those fewer than 100 kilowatts—to local and regional customers.

Over the years, Bingham has found that, while homeowners understand the straightforward value of reducing energy costs, business owners have to take myriad other factors into account when weighing the bottom line.

“Last year it became apparent that, while the numbers for solar were better than ever, even when you factor in government credits and rebates, businesses still didn’t think it was as good as other investments they could make for their business,” Bingham says. “They tend to be a bit more cautious, and understandably so.”

Take White Mountain Pool & Spa, a full-service retailer located in Dover. For a business like theirs, investing in green technology has to be considered in the context of other possible investments—like, say, bringing in a new line of hot tubs.

But, as Bingham noted, “If someone else is making a reasonable capital investment in that solar system, a business tends to be much more receptive.”

That’s exactly what happened with White Mountain Pool, Bingham’s long-time neighbor when the two businesses shared a building. Bingham’s promise: Save money on your electricity bill every month for the next 25 years, with the sole up-front cost being little more than a sliver of space on the roof.

Needless to say, co-owner Mike Clark was sold.

“Any time you can save money on a fixed cost item without having any out-front investment—I don’t know how you can say no to that,” says Clark, who along with Dave MacGregor purchased the now nearly 60-year-old White Mountain Pool in 2002. “Everyone knows and believes solar is the right thing to do, but when you own a business you have all sorts of capital restrictions. Having a PPA made that an easy decision to make.”

Completed last November, the system has performed exceptionally well despite a bitterly cold, cloud-covered winter.

How do Clark and MacGregor know? They have an app on their phones that monitors the system’s production in real-time, of course.

“You don’t expect that kind of production this time of year, so we’re ready to blow the doors off the place come summer time,” Clark exclaims.

Rochester Truck Repair carries millions of dollars of inventory in trucks and parts for their customers. For Don “Hulk” Gagnon, the PPA offered a chance to use green technology and not tie up capital. Rochester Truck pays a fixed amount per month for electricity to Barrington Power, based on an annual production estimate. At the end of the year the revenue grade meter is used to determine whether he used more or less power and a payment is made to one party or the other, so there’s no risk. Much of this winter his system was buried under substantial snow cover but Barrington Power will either catch up or owe him some money at the end of the year.

According to Bingham, getting White Mountain Pool and Rochester Truck on board is part of a broader strategy of reaching out to businesses he knows well, and especially the ones who might be more sustainability-oriented.

Like, say, the 100-plus members of Green Alliance, a Portsmouth-based “green business union” that certifies and promotes green-driven companies throughout the region, while giving its 3,000 consumer members exclusive discounts to all partnering firms. Bingham’s Seacoast Energy Alternatives is a flagship GA Business Partner having been one of the first ten businesses to join the unique consumer co-op and green business union when it started 4 years ago.

Make no mistake: Bingham remains fully committed to touting the merits of solar energy regardless of the financial structure. Heck, he’s even slated to give a comprehensive talk on the subject during the Seacoast Home and Garden Show, to be held at the Whittemore Center on the campus of UNH on March 29.

Still, you can’t blame him for feeling like—after years of fighting the good fight and evangelizing on behalf of the green gospel—the combination of industry growth and more dynamic financial models are finally beginning to ring righteous.

“It’s about being able to say, ‘We’re making electricity in a better way,’” says Bingham. “Once businesses see how much of a no-brainer this is—the idea that you can go green while saving money every month—I think a lot of them will hop on board and we’ll have a real critical mass in the region.”