Hundreds of Douglas County homes a year may have a new incentive to add solar panels to their roofs under a plan crafted by a local solar panel company and an area bank.
On Tuesday, Lawrence city commissioners got their first look at the idea, and agreed to study whether to provide an incentive to increase solar panel installations as well.
Aron Cromwell, a former Lawrence city commissioner and the CEO of Lawrence-based Cromwell Environmental, and Baldwin City-based Mid America Bank have created a partnership to provide leases to homeowners and small businesses that want to begin producing solar energy.
"We have been talking about ways to get solar to take off here, and we think we have one," Cromwell said.
City commissioners at their weekly meeting were asked to consider a change in city code that would reduce the building permit fees required to install solar panels on homes and businesses. Commissioners referred the request, which would be likely to reduce fees by about $500 on average, to the city's Building Code Board of Appeals for further review.
Cromwell said the proposed building permit fee reduction is part of an effort to lower the amount of upfront costs a homeowner has to pay to undertake a solar project. Currently, he said a typical residential solar project may cost $20,000 to $30,000.
"A lot of people in Lawrence want to do solar," said Cromwell, who has been installing units since 2000. "If they had a choice to pay $100 per month to Westar or pay $100 per month to have solar, they would choose solar. But they don't always have the money to meet the upfront costs."
Cromwell earlier this year approached Mid America Bank about creating a leasing program that allows all the purchase and installation costs of a solar project to be spread over a 15-year lease period.
Cromwell said the goal is to create leases that result in a monthly payment that is less than the average amount of money a house or business saves in energy usage from solar panels. For example, if a home installs a solar system that results in an average savings of $100 per month in energy costs, Cromwell is expecting average lease payments to be about $80 to $90 per month.
"This is how most residential solar is sold across the country, but it is the first time that it is being done here," Cromwell said. "It also is the first time I'm aware of that it is being done in a state that doesn't have a big statewide solar incentive program."
Mid America Bank leaders said they became interested in the program after they had solar panels installed at their main bank in Baldwin City. The panels have cut the bank's electricity usage by about $400 a month during the summers, said Jeff Hill, bank vice president.
"In Douglas County, I think the potential for the program is pretty high," Hill said. "Environmental awareness is pretty high here. Plus, a majority of our neighborhoods don't have covenant restrictions on what you can do with your roof."
With the leasing program, Mid America Bank actually would own the solar panel equipment and be responsible for installing it. Home or business owners would make monthly lease payments over 15 years. At the end of the 15-year period, the homeowner could choose to keep the system by paying for the fair market value of the system at the time.
"A 15-year old system is not going to have a very high value," said Hill, who estimated that a system worth $30,000 today would be likely to have a buyout cost of less than $3,000 after 15 years.
Cromwell said the program likely will go forward regardless of whether the city agrees to reduce its fees. He said the city in past years had charged an inspection fee that averaged about $50 for solar panel projects, which mainly encompassed the inspection of work done by an electrician to connect the panels to the house's power supply. But now the fee is based on the total value of the solar panel project, which has pushed fees above $500 in many cases. He's asking the city to return to the previous fee system.
Cromwell said the fee reduction would help make more projects economically feasible for homeowners. He also said it would be a good way for the city show support for a green initiative.
"Part of this is an image thing," Cromwell said. "We talk a lot about being a green community. This would be a visible sign of that."
Cromwell said his company currently is doing about $2 million a year in solar installations, but most of that work is done out of state. Cromwell is estimating that the program, if it takes off as he anticipates, will allow his company to add about 10 new employees in the next couple of years.