A Solar Strategy for Cable

9/27/2010 12:14 AM Eastern

Suppose you opened
your electric bill and it read:
Amount due: $1,000,000,000.
That would get your attention.
$1 billion. Well, that’s the annual
electricity consumption
of the cable industry, and it’s
got the attention of operators.
What’s more, with new services
proliferating and electricity
rates rising, the tab could
double or triple in five to seven
years, according to the Society
of Cable Telecommunications

What to do about it? Energy
efficiency must always be the
first approach to cutting energy
bills. But in this column, I’ll
focus on how cable can employ
solar technology to generate
power without a big hit to capital
budgets and how that can be
the first step in a five-step solar
strategy for cable.

Photovoltaics, solar panels
that generate electricity from
sunlight, are a proven technology
in use for decades. I was involved
with a PV demonstration
at the 1980 Winter Olympics.
With panel prices declining,
plus federal and state incentives
for installing solar, PV power
is becoming cost-competitive
with utility electricity.

What really makes PV practical
is a financing mechanism
for solarizing a building with no
capital cost to its owner or occupant.
Under this arrangement,
the PV system is owned, installed
and maintained by an outsource
service provider, who sells power
generated by the system to
the building occupant on a payas-
you-go basis through a longterm
contract called a Power
Purchase Agreement.

Over 70% of commercial,
industrial and institutional
PV installations are now done
with PPAs, to cut electric bills
and protect against utility-rate
increases. So step one of the
strategy is for operators to use
PPAs to install solar panels
on their facilities, especially
headends, with their racks of
power-hungry equipment and
relentless need for air conditioning.

But cable has far more at
stake than just saving energy.
In today’s competitive marketplace,
it’s essential to project
a positive image to current
and prospective customers.
Ninety-two percent of Americans
believe we should be using
solar energy, according to
a recent survey done for the
Solar Energy Industries Association.
Step two, then, is for
cable to conduct communityrelations
initiatives around
its solar installations, both as
a public service and a competitive

Step three takes cable’s outreach
efforts even further, by
providing customers with information
on how they too can
use solar and conserve energy.
Consumer economics may
well be a factor in last quarter’s
first-ever decline in total
multichannel video households.
So helping cable customers
save money on energy
is not only good for cable’s
image, it’s good for cable’s
business. Informational programming
about solar and
energy conservation offered
via video on demand would
provide another opportunity
to underscore the value of
VOD and drive usage.

Step four gets cable even
more involved with energy.
Its broadband pipes can support
new home energy metering
and monitoring devices, as
part of upgrading our electrical
infrastructure to a smart grid.
There is potential business for
cable in deploying such devices.
There is also an opportunity
to partner with companies installing
PV systems on homes.
They want to sell their products
to the homeowners whom cable
serves and can target market.
And they need capital to
grow their businesses.

Step five actually puts cable
operators into the business of
owning and installing home PV
systems under PPAs. This is not
as far-fetched as it may seem.
Cable has the resources needed
for the business: field techs,
trucks, customer service and
sales reps, and billing systems.

True, it’s much more expensive
to provision a solar
customer than a cable one. A
home PV system can easily cost
$15,000 and up, but it throws
off a 30% federal tax credit and
accelerated depreciation, plus
additional financial incentives
in some states. Once installed
on a customer’s roof, the system
is a cash cow, with virtually
no churn and very minimal
operating costs. Unlike cable,
there is no rising cost for “content”
— the sun’s rays will always
be free.

Today, out of 70 million detached
single-family homes,
maybe 125,000 U.S. households
have PV systems. By first
taking steps one and two, using
solar on its facilities and promoting
that in the community,
a cable operator can save money,
improve its image, and gain
experience with a technology
business in which only the sky
is the limit.

Steve Nelson, former producer
of the Cable Channel,
is founder and CEO of Solar
Electric Service Corp.

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