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New Solar Power Business Model (Feel free to steal)

I've been thinking about a new business model involving
residential solar power generation which would serve as a legitimate use for CDO's.

The plan would involve outfitting single residence homes (or any power consuming building for that matter) with solar panels.  The twist is as follows. Instead of the homeowner paying for the cost of the panels and installation in the traditional manner, the homeowner would sign a contract placing a lien against their home (similar to a 2nd mortgage or equity line of credit) equal to the value of the system. Part of the contract would be that the homeowner would agree to continue to pay his current per KWH rate for any electricity produced by the system for some to be determined period of time (say 20 years for instance). A financial instrument (similar to a bond or annuity) would then be created and sold in the financial markets (like mortgages are today) with the cashflow derived from the sale of electricity to the homeowner used to pay the bondholder.

The profit from the business model described above would come from the difference between the cost to install/maintain a system and the amount the financial instrument could be sold for based on the cash flow generated. The key would be to lobby state legislatures for credits/tax breaks, negotiate with utility companies for partial payment of cost avoidance savings, and to utilize economies of scale with regard to the purchase of solar panels and related equipment from manufacturers in order to bring the cost of the system down.

The benefit to the homeowner would be that he would be guaranteed a fixed electricity cost for XX years. After that time the system would belong to the homeowner and the lien would be removed from the mortgage.

Comments?

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