We are like tenant farmers chopping down the fence around our house for fuel when we should be using nature s inexhaustible sources of energy; sun, wind and tide... I d put my money on the sun and solar power. What a source of power! I hope we don t have to wait until oil and coal run out before we tackle that. Thomas Edison, U.S. inventor, in 1931 conversation with Henry Ford and Harvey Firestone
Rob Peck Design Consultant Design and Install Solar Electric Systems Throughout Wisconsin Since 2007 Residential, Commercial, Government Grid-Tied, Battery Backup, Off-Grid
Here s What I ll Cover The value of grid tied solar electric systems Where the industry is at today System Costs Incentives and Tax Credits Performance A look at where the industry may be headed
Solar Electric Systems Are just for hippies and tree huggers Image borrowed from Home Power Magazine
Solar Electric Systems.. Will never be mainstream 5.86mW on 16 Wisconsin stores in 2016 Installed by H&H Solar
Solar Electric Systems.. Don t work in Wisconsin 19mW to be commissioned in western Wisconsin by Dairyland Power Cooperative in 2017 Eau Claire WI Installed by SoCore Energy
Solar Electric Systems.. Never pay for themselves 100kW at Central Waters Brewery Investment pays for itself in 5 years Amherst, WI Installed by North Wind Renewable Energy
Solar Electric Systems.. Can t offset enough energy 100kW on Blenker Building Systems 2015 Amherst, WI Offsets 50% of annual electricity Installed by North Wind Renewable Energy
Solar Electric Systems.. Costs too much It Average takes 1.23# Wisconsin of coal to homeowner generate 1kWh pays of electricity. $120/month In WI, for coal is responsible for 68% their electric habit. of of all electricity generation. $ 65,232 229,170 lbs. of Coal Installed by North Wind Renewable Energy 217 Tons of CO 2
Solar Electric Systems.. Costs too much This 4 module 1.0kW grid tied solar electric system generates 1300kWh of electricity in a year and offsets 82% of the homeowners annual energy use. Installed by North Wind Renewable Energy Installed Cost: $ 7,400 Net Cost: $ 4,558
Solar Electric Systems.. Just don t make financial sense 38kW at Klismith Accounting and Tax Group Plover, WI Installed by North Wind Renewable Energy
A Pause For Information Absorption
Grid Tied Photovoltaic System
But what gives grid-tied solar electricity value? Net Metering The Public Service Commission of Wisconsin (PSC) issued an order on January 26, 1982, requiring all regulated utilities to file tariffs allowing net metering to customers that generate electricity with systems up to 20 kilowatts (kw) in capacity. Eligibility and Availability: The order applies to investor-owned utilities and municipal utilities, but not to electric cooperatives. There is no limit on total enrollment.
But what gives grid-tied solar electricity value? Net Metering Chart reprinted from SEIA
But what gives solar electricity value? Net Metering 1400 1200 1000 800 600 400 200 0
Wisconsin s Focus On Energy
Wisconsin s Focus On Energy Current Focus On Energy Incentives Residential: 12% of qualifying systems up to $2,000 Commercial: 12% of qualifying systems up to $4,000 RECIP (Renewable Energy Competitive Incentive Program) Successful applicants can receive cash incentive worth about 12% - 15% of the systems cost - $400,000 cap
Federal Investment Tax Credit 2005: Congress passes the renewable energy investment tax credit, which offers a 30% tax credit to residences and businesses with a tax appetite 2006: Congress extends the Renewable Energy ITC 2008: Congress renews and expands the ITC through the end of 2016 Chart reprinted from SEIA
Federal Investment Tax Credit December 2015 Congress extends the ITC for residential and commercial installations Residential: Commercial: 30% thru 2019 30% Thru 2019 26% 2020 26% 2020 22% 2021 22% 2021 0% Beyond 10% Beyond Commercial Installations may qualify for MACRS accelerated depreciation
Nationally Solar Energy Is Shining
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In 2012, regulations begin to change in Wisconsin Chart Reprinted from SEIA
Net Metering Definitions Change Beginning January 1 2012, Wisconsin Public Service Corporation (WPS) implements the first Monthly True Up among Wisconsin utilities. Others (but not all) would soon follow. 700 600 600 500 500 400 400 300 300 200 200 100 100 0 0 June January Energy Energy Purchase June January Energy Energy Sell Sell
Net Metering Definitions Change 1200 1400 1000 1200 1000 800 800 600 600 400 400 200 200 0 0
Revenue Methodology Change 2013 2016 Fixed Charges $8 / Month $21 / Month (+265%) Energy Charges 12.6 /kwh 9.95 /kwh (- 21.1%) 3000 kwh/year Customer $498 $550 (+10.4%) 15,000 kwh/year Customer $2010 $1744 (-13.3%)
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So, what does this mean for a residential PV installation Madison WI, 5:12 roof pitch, due south orientation, no tree shading (22) 295watt PV Modules 6.49kW Energy Generation 7,545 kwh Installed Cost $20,860 Focus On Energy $ 2,000 30% ITC $ 5,658 Net System Cost $13,202 Cost Recovery Module Performance Warranty 12 years 25 years
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 3034 3035 2036 2037 2038 2039 2040 2041 2042 2043 2044 So, what does this mean for a residential PV installation $40,000 Cash Flow $30,000 $20,000 $10,000 $- $(10,000) $(20,000)
Here s What We Know Today ITC credit is secure for 5 more years Focus On Energy Cash Back Rewards, while set for 2017 and 2018, are uncertain at best. Price of installations will continue to decrease and module efficiencies will continue to increase For Wisconsin, until there is a change in Madison, the to solar headwinds will continue to blow. Based on the historical trends, the number of solar installations and solar capacity will continue to grow. It is likely that commercial installations will show continued strong growth.
What are the challenges Utilities Will WI utilities continue to increase fixed rates with or instead of energy rates? Will WI utilities begin residential demand charges? Will WI utilities search out the true value of distributed solar energy? Do WI Utilities continue with the same business model? Legislative Will our state legislature rule on 3rd party or leased ownership systems? Will our legislature rule on consistent administration of net metering policy? Does our legislature follow the leads set by other states and support a utility structure for todays sources of energy?
The Future of Solar is
Energy Storage Lithium Ion Aqueous Hybrid Ion Sodium-nickel-chloride Nickel Iron Flow Batteries Battery Back-up Off Grid Peak Shaving Demand Reduction
Where do we go from here? Utilities Lead The Drive For a Smarter Grid Wisconsin utilities acknowledge that a change to the 100 year old business model is inevitable, and take the lead in developing a New Grid. Following the lead of utilities like IOU s in New York and Vermont
Where do we go from here? Ratepayers Lead The Market Utilities continue the business model of increased fixed charges and net metering policy the drive customers to smaller PV arrays. Then change will be driven by the ratepayers. Change will take time, but it will be irreversible. The technology exists for peak shaving and demand reduction. While it takes batteries, it would be a smaller bank than an off-grid system. Ratepayers will use the grid only if and when it benefits them. And if that doesn t work, ratepayers are a half step from going off grid.
Invest in grid tied solar energy today. Take advantage of Federal Tax Credits State Incentive Programs Favorable Net Metering Start building the value of your system Take the next few years to reduce your electric loads. Reduce and eliminate. Prepare yourself to take advantage of energy storage when the costs and efficiencies make it cost effective for you.
The best time to plant a tree was twenty years ago The second best time is today Chinese proverb