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Solar installer rents rooftops to make megawatts

Recurrent Energy signs deal to rent space on commercial rooftops in Spain to install 4.8 megawatts worth of solar panels, a new business model for distributed energy.

A photo illustration of a solar installation planned in Spain. ProLogis

Recurrent Energy announced on Tuesday a deal in Spain to install 4.8 megawatts worth of solar panels on several rooftops leased from distribution company ProLogis.

In this model, Recurrent owns and operates the panels and sells the electricity the panels generate. ProLogis gets a one-time construction management fee and an annual rental payment.

This distributed solar model, where an outside company rents rooftop space and sells the panels' electricity, is being pursued in the U.S. as well by a handful of utilities. Southern California Edison, for example, said it plans to install as much as 250 megawatts worth of solar energy capacity on hundreds of commercial rooftops.

There's been a sharp uptick in interest in centralized solar power plants over the past five years. But financing those large plants and finding sites for them, often in environmentally sensitive protected land in the southwest U.S., has slowed deployment of those large-scale systems.

The combined output of Recurrent's installations in Spain, which are set to go online in 2010, is enough to power well over 1,000 homes. By contrast, a centralized solar plant would be built with enough capacity to power hundreds of thousands of homes.

Still, the model can be expanded, Recurrent Energy CEO Arno Harris said in a statement.

"We have over 500 MW of distributed-scale projects in development across North America and Europe, and what this project successfully demonstrates is the sizable role commercial and industrial rooftops can play in large-scale solar deployment," Harris said.

Spain is a hotbed for solar energy because it has a good sun resources and because it has a feed-in tariff for renewable energy production, as does Germany. With a feed-in tariff, project developers are ensured that electricity will be purchased at a certain rate over a fixed term, such as 20 years, which many experts say creates a predictable financial incentive.