Energy Service Companies (ESCOs) in the U.S. endeavor to save customers money by guaranteeing lower pricing structures over a set period. These companies do not produce energy themselves; they install and pay for energy saving equipment and processes for their customers then pay the monthly utility bills for them, at a rate that should be lower than they would have been without the improvements. Their customers then pay them a monthly rate that is derived from taking an average of what their energy bill would have been without the improvements. The ESCO then makes a profit on the difference and the customer gets a fixed energy price and free improvements to their systems. Since ESCOs were introduced into the U.S. market, there has been plenty of debate over whether or not they indeed offer significant savings.
In other parts of the world, ESCOs are starting to develop models that include generating energy through solar thermal. The question we are looking to answer is how the ESCO model can best take advantage of the fuel savings realized by installing solar thermal systems for their customers. We think it can be significant and, in fact, we are working with our first ESCO project now and they are monitoring the results. We are confident that this test will open many future commercial applications for ESCOs that utilize our SunQuest 250 evacuated tube solar thermal panels for their business model.
What They Are Doing
Spain offers an excellent example of how ESCOs in other countries are using solar thermal to generate energy. Rather than just purchasing energy from utility companies, ESCOs are building their own solar thermal installations, metering the energy they produce, and then selling the energy to customers for the purposes of providing space heat and hot water. It is a very popular option in Spain for hotels and nursing homes. Some ESCOs are also deploying solar thermal for large, multi-unit residential buildings.
Making it all possible is a government program that provides low-interest loans to ESCOs. To date, the program has loaned some €2 million to ESCOs willing to install solar thermal systems. The funding has provided for 42 registered companies that have thus far completed 18 projects. The Spanish government says there is still €3 million available under the program. It is possible the program could be extended if all of the money is used in the future.
Bringing the Model Here
Solar America Solutions believes the model being used in Spain and elsewhere is very workable in the U.S. The biggest hindrance seems to be financing and consumer buy-in. While solar thermal installations are not excessively expensive, they are not yet mainstream enough to be an obvious consumer choice. However, we believe the benefits of new and efficient solar thermal panels will gain public interest and will become a key component to ESCO’s energy saving options.
Once a solar thermal system is paid for, it becomes a pure profit generator year after year. The amount of energy that could be saved would more than pay for future equipment upgrades while still generating significant profits for the ESCO.
At the customer level, greater savings could be realized through static energy costs. ESCOs are already built on the model of providing improved energy-saving systems at no charge and assuring their customers that their energy costs will remain stable for the next 20+ years. Customers would pay less be able to budget their energy costs without having to hedge against unanticipated energy cost increases.
Solar America Solutions could be a huge part of this model if ESCOs could be convinced to take a serious look at it. Our SunQuest 250 evacuated tube solar panel provides a very powerful base on which to build an efficient and cost-effective thermal energy system. Just a single SunQuest 250 is capable of producing over 30,000 BTUs per hour and stagnation temperatures as high as 490°F. Even more important is the fact that the panel does not require direct sunlight. It utilizes ultraviolet rays instead, so it performs quite well even on cold, cloudy and overcast days.
We believe solar thermal can be a viable platform for ESCOs to produce energy. Let us hope the model catches on here in the United States.
- Solar Thermal World – http://www.solarthermalworld.org/content/spain-eur-2-million-subsidies-solar-heat-providers