Plainfield-based Duke Energy is launching a new pilot program intended to improve small businesses, schools and nonprofits’ access to solar energy through a monthly lease.
The Indiana Utility Regulatory Commission approved the program earlier this month. Through the pilot, eligible customers can lease a solar energy facility from Duke Energy for a period of up to 20 years. Duke Energy will install, operate, own and maintain the facility for the duration of the lease.
The program is limited to Indiana small businesses, schools and nonprofits as a test to see if this is something Duke Energy would want to pursue in the future.
Duke Energy spokesperson Lew Middleton said the idea behind the program is to provide smaller entities with the opportunity to incorporate some solar energy into their energy mix at a lower cost.
“Instead of the company, organization or business having to buy all the solar equipment, which can be pretty pricey, we’re offering to lease it to them for “X”-number of dollars a month depending on who the customer is because the charges won’t all be uniform,” Middleton said.
Duke will provide equipment and maintenance for the life of the lease, Middleton said. The business gets to use the energy from that solar power plant. Initial energy capacity is limited to a total of 10 megawatts for eligible customers with the Duke Energy Indiana service territory. Middleton said only participating customers will be charged for the voluntary program.
The type of solar energy facility will be customized for each applicant depending on their preferred location. For example, some may wish to install a rooftop solar energy facility while others may prefer to build a solar facility on an area of land.
The pilot program is a new step for Duke Energy as renewable energy sources such as solar and wind power become less expensive to incorporate into an energy mix.
Middleton said as the landscape for renewable energy changes, companies such as Duke Energy are challenged to transform their own energy landscape and find ways to best help customers incorporate renewable energy as effectively and efficiently as possible.
“It represents quite a large change from what conditions were even five or 10 years ago when prices for renewables were much higher than they are now.” Middleton said.
But one local proponent of solar energy thinks the energy giant could do better.
“Wherever and whenever clean renewable power can be deployed, that’s a good thing,” said Barry Kastner, a founding member of the Columbus Energy Matters Community Coalition.
“Duke Energy Indiana’s solar leasing pilot program is welcome, as far as it goes. As a pilot not to exceed 10 megawatts, compared to around 6,100 megawatts of coal-fired and coal-gasification capacity owned by Duke in Indiana, this is a very small action by the largest greenhouse gas emitting utility in our state and nation.”
Kastner said Duke is not really investing or building solar capacity in its own system, but instead is seeking to control some of the solar installation businesses that entrepreneur solar vendors have developed.
“Duke here is offering to provide the financing through a lease arrangement for its customers who want to go solar,” he said. “If the solar customer does not have a solar vendor already, Duke will hire a solar vendor to install the system.”
The question Kastner is asking is whether a solar customer can do better with lease financing with Duke versus owning the system outright and self-financing it or financing it through a bank.
“Each contract with Duke is negotiated,” Kastner said. “Until you see the service agreement and leasing terms, it is hard to tell. Most customers will probably want to get multiple quotes and compare cash flows closely.”
Through the program, the electricity from the solar power plant will offset a portion of the electricity that a customer purchases from Duke Energy. In other words, Middleton said, a participant will receive some power from the solar facility and some power from Duke Energy, ultimately reducing the amount of money paid per month to Duke Energy.
This is not the company’s first effort toward the promotion of clean, renewable energy such as solar power.
In a June 6 press release, Duke Energy touted its recent construction and operation of a 17-megawatt solar plant at a southern Indiana naval base, along with the purchase of up to 20 megawatts of solar power from four solar sites.
Because the pilot program is limited to just 10 megawatts in the Indiana service area, Middleton said he could not speak to the overall impact the pilot program would have on the state.
“I do hope the leasing makes sense for a lot of customers to go solar but Duke and Indiana can do better,” Kastner said.
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Duke Energy Indiana, a subsidiary of Duke Energy, provides about 6,600 megawatts of owned electric capacity to approximately 840,000 customers in a 23,000-square-mile service area. The company is Indiana’s largest electric supplier.
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To participate in the solar energy leasing pilot program, call Duke Energy Indiana at 800-521-2232.
For more information, visit duke-energy.com.
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