Everyone who goes solar takes risk. Depending on the market, there might be substantial risk. Nevada is a textbook example — thousands of homeowners invested in solar only to see the Nevada PUC repeal net metering without grandfathering (following Nevada’s encouragement of solar adoption via incentives). Overnight, seemingly sound financial investments were shattered. Other markets are more stable of course. The California PUC for example has proven their longstanding commitment to distributed solar. While utility rate structure changes may weaken the financials in California, solar customers can at least rest assured that annual net metering will stay in tact for 20 years from interconnection date (whether NEM 1.0 or NEM 2.0).
As with any investment, financial returns need to be considered against the assessed risk of that investment. I’d rather invest in an S&P 500 index than a Bay Area tech startup, even if the startup shows potential to return my money 10 times over. That’s because I prefer basic financial security over the chance of extravagant wealth.
Let’s say I want to go solar and I receive a few electric bill savings projections from local install companies. If I’m looking at this carefully, I’ll need to weigh the risks around equipment reliability and degradation, manufacturer warranties and solvency, install company warranties and solvency, solar production and monitoring, utility rate structure and solar compensation volatility, electric rate escalation vs. projected (this factor impacts the investment exponentially over time, so it’s especially important to consider), potential property insurance and property tax adjustments, potential roof and electrical issues, roof warranty coverage, problems leveraging tax benefits, etc. It gets murky.
Enter a financial insurance product for the solar investment. I could optionally pay a monthly premium to a trustworthy insurance provider, guaranteeing an electric bill savings floor over a selected term. The premium per solar owner would vary depending on the provider’s assessed risk given factors mentioned above and others. The provider would be in a much better position than each individual solar owner to analyze and quantify risks across the U.S. The provider’s overall risk would be mitigated by serving a wide variety of markets.
I think many people who want to go solar would be willing to pay a premium for this peace of mind. I know I would.
Note: OnGrid has no plans to offer this insurance product. Our priority is improving existing products for our users. Just putting an idea out there for consideration.
Michael Bishop, 9/12/16