Orange Button, a program launched by the U.S. Department of Energy this past April, seeks to standardize the way that solar data is collected and exchanged.
The program is just one of many under the umbrella of the D.O.E’s SunShot Initiative, launched in 2011. This particular one is key in reducing costs associated with developing finance programs for solar.
As the solar power industry is relatively new, it is not surprising that the industry has yet to develop a set standard to deal with the various data sets that exist. The extra hours spent working with data easily adds significant extra costs in developing solar loans. “When you look at the cost of financing for these solar projects, it’s artificially high. Solar is a long-term asset that has pretty well-known characteristics, but it’s treated as a higher-risk asset because there isn’t sufficient data available to help folks in the financial industry to know how to assess the risk of a portfolio of assets.” – Elaine Ulrich – the D.O.E.’s project manager.
“Soft Costs” – non hardware costs – represent a significant portion of the total cost of solar installations. Orange Button will go a long way in reducing these soft costs by reducing solar financing costs and other bureaucratic fees.
Four organizations have been awarded funds by SunShot to begin work to streamline how data is collected and used across the solar industry. These organizations are the Smart Grid Interoperability Panel 2.0, SunSpec Alliance, kWh Analytics, and the National Renewable Energy Laboratory. This work is primarily to be done over the next 2 years.
A reasonable expectation for results from Orange Button are solar finance rates that are comparable with mortgage rates. If anything, rates for solar could be even lower considering terms are typically 10 years or less compared to the much longer traditional 30 year mortgage. Shorter terms equals less risk for lenders.
Unfortunately, quite a few homeowners are under the impression that the only way to go solar is have a full cash payment ready for a solar panel system. This is not true. The current reality is that, here in 2016, there are already quite a few ways to get a solar installation financed. While rates will become lower in time with help from Orange Button, they’re actually quite reasonable right now. Check out the solar financing page for more information.
In the meantime, the overall cost of solar will drop incrementally in the coming years. A very high percentage of the savings in solar have already occurred, so going solar now and beginning to save is likely a better choice than waiting a few years for future decreases and paying too much in the meantime.