Renewable Tax Credit / Utility Commission Whining

The renewable energy tax credit is set to expire at the end of 2016. It is an amazingly successful program, of which many households took advantage. Some statistics from SEPA:

"In the United States, there were at least 302,000 "distributed" solar installations—essentially, systems on rooftops, not at power plants—installed across the United States in 2012, and the number could grow by a third in 2013, according to the Solar Electric Power Association (SEPA). More than 99.5 percent of those installations were net metered. Those solar systems add up to 3,440 megawatts of capacity, nearly as much as the largest nuclear power plant in the United States, Arizona's Palo Verde."

I'm amazed that the Utilities commissions continue to whine about solar PV installations, with Netmetering. Their arguments are unfounded, and put forth by pressure from the fossil fuel industry. Basically it goes like this - other customer's bills will increase, due to renewable customers using the grid at no cost. In theory, this sounds like a plausible argument. In actuality, the exact opposite is true. But they stick to it, because it serves to anger customers without renewable installations. Basically, sic the majority onto the minority.

I have first-hand experience with renewables. I installed a solar PV system, and a wind turbine, with my new home. See picture.

When I installed my system, the monthly fixed fee, the fee everybody pays, prior to usage fees, was $9.95 per month. A year or two later, this fee increased to $19.95 per month. A year later, it increased to $29.95 per month. All of these increases were accompanied by USAGE FEE REDUCTIONS. So Utilities have already figured out a back door around the mandatory Netmetering. And yet, they continue to whine. It's nothing more than pressure from the coal industry. Solar installations have become a threat to their status quo.

The other factor that the Utility Commission argument fails to mention is that solar PVs produce at their peak, on sunny summer afternoons and early evenings. This is exactly when the Peak Load of Utilities is the highest. Power companies size their power production for peak loads. As such, solar installations, financed by the home-owner, curtail the need for construction of new power plants. Who would have paid for these new power plants? The consumer - that's who. In reality, renewable customers, are paying more than their fair share. It's hogwash, if anybody tells you otherwise.

It is a FED tax credit of 30% in the year the equipment is purchased in and the equipment has to qualify, no biggie! Can also depreciate it over 5 years, do the math no biggie! The net metering does little too to justify installing PV. Now by law in most states they do not have to let you store for the winter, you loose what you do not use or sell back each month. The buy back rate is usually their cost not retail and they do not have to buy back from clients to meet their FED renewable quotas they can use other sources. 2016 probably will not change the FED laws it is more the states that is the problems removing incentives depending. Each state has different laws on what Utilities have to provide such as buy back meters, there may be codes that cost more. Like my state a licensed pro has to install if connected to the meter, so add that to your total cost than take the incentives. I'll guess alot of the percentage of people that installed never ran the NREL SAM simulation model to see their pay back period. It also does a very complete cost study, but the learning curve is steep and for pros. Most PV sales do not want people to see those results. If one is paying .10-.15 kwh and not in a sunshine state it's probably a loss until the cost gets down to $1-2 KW which it may never. Might make more sense when.if homes are all DC. Better yet the cost of a Telsa or other battery may be a better path than grid tied but, probably not for a ten year battery life... run the model, now pay back is real far out there. It's solar craze most do not understand. Wind is less efficient than PV if all losses vs cost is considered, run SAM in your area unless you have high wind 24/7.

Also, if you can dump half the money into the envelope to lower utility loads real low it makes less sense. Some buildings can last weeks no HVAC in freezing temps. Now the building is not only energy efficient but comfortable (no drafts) and healthy PV does not provide. If you have an old building PV cost may make sense than a deep energy retro-fit depending on how drafty and unhealthy the building is. Health and comfort should be the determining factor not energy bills.

I ran SAM is KS my existing home it made no sense when we pay .10 KWH and it cost $3.00 KW to install. I'm going to run it again now home build once I buy a lot and set my design on it.

DSIRE: http://www.dsireusa.org/

I suggest running PV Watts or SAM(2015 version best with the right weather pattern) w/0 incentives. If it makes no sense and the pay back is too long (5 years +), add a 30 year Energy Efficiency Mortgage 100% financing at the rate you qualify, private or FHA Power Saver loans, to the model and look at the outputs. Try a lease and cash. If it still makes no sense plan on selling less than 5 years or put the money in the envelope, efficient domestic hot water and low plug loads (lighting etc)...or install and metering device to see where the highest loads are.

Assuming an average USAGE electric bill of $100 per month (all-electric home), here's my calculations, with all interest set aside. I'm in a sun-heavy state, Colorado, with 320 sun-days per year, so the payback isn't too bad.

$1200 per year.

Cost of systems (wind and solar) after state rebates and federal tax credit: $19K

I get a check back each year for around $250, however I pay $29.99 per month for fixed fees (per original note, this was $9.99).

I estimate my payback to be about 15 years. Had the Fixed Fee stayed at $9.99, it would have been better.

Again, anyone wanting to know how to calculate pay-back period properly take some time to read NRELs PVWatts and SAM and run the simulation model. I did not mean to mislead, this includes sunshine states and wind states...... How effect they are depends on alot of technical factors not just cash flow and tax benefits.

I recommend that if an installer has not presented these reports and can not explain or has no idea what is in them in detail find another. Also, it is best to find a qualified Energy Auditor that can present all options as suggested above. PV and/or wind may not be the best option.

Terry Ruth wrote:Again, anyone wanting to know how to calculate pay-back period properly take some time to read NRELs PVWatts and SAM and run the simulation model. I did not mean to mislead, this includes sunshine states and wind states...... How effect they are depends on alot of technical factors not just cash flow and tax benefits.

I recommend that if an installer has not presented these reports and can not explain or has no idea what is in them in detail find another. Also, it is best to find a qualified Energy Auditor that can present all options as suggested above. PV and/or wind may not be the best option.

If my calculations are off either way, by a year or two or more, I'm not worried about it. For one thing, it all depends on future costs of electricity. Which is my original point. If Utilities low their usage rate and raise their fixed rate, as a political weapon against home renewables, then the calculated ROI is negated. Nonetheless, I would never want anything but renewable energy. Most owners of renewable systems (especially netmetered systems) are not doing it for the money.