Solar electric works in North Country, but government incentives still needed for it to pay off for homeowners
By CRAIG FREILICH
Solar energy can generate most of the electricity some North Country households will use, and it’s getting cheaper all the time.
But so far, a homeowner here will find it hard to break even on the cost of installation without the financial incentives offered by state and federal governments, which can amount to up to 60 percent of the installation cost.“And once installed, operating costs are not very high. It’s mostly capital costs,” said Susan Powers, Sustainable Environmental Systems professor at Clarkson University.
As it stands now, the New York State Energy Research and Development Agency (NYSERDA) grants $1 per watt for residential systems. So for a 4.5 kW installation, NYSERDA will grant $4,500 toward the cost, if it meets standards.
The state gives a tax credit of 25 percent up to $5,000 after the NYSERDA installation grant is applied. And there is a federal tax credit of 30 percent.
A $22,500 4.5 kW home solar system could earn the owner $15,700 in tax incentives, although it would also trigger increased federal taxes of $1,503 for a married couple with taxable earnings of $10,000 yearly, to $3,350 for a couple whose taxable income is $200,000 annually, according to a NYSERDA online calculator.
Still, the ultimate cost for system would be between $8,253 and $10,100. If the current electricity bill is about $150 monthly, the homeowner would break even after five years. It’s also possible the homeowner could make money on the deal.
The government incentives are “a coupon, a carrot to get people to move in the direction we need to move in, generating more energy domestically in a way that doesn’t mess up the environment,” said Scott Shipley, of Northern Lights Energy of Canton.
Powers said that solar power systems have become “easier to install, with higher efficiency and longer lives” over the last decade, and that state energy policy has made it easier to have a home installation that is worthwhile.
“Gov. Cuomo is pushing solar photovoltaics (PV) and other small-scale renewables. He has high goals for the state.”
Margaret Weitzmann of Potsdam installed solar panels on her Garden Street house 10 years ago, and she says she is quite satisfied.
She said her house was “the first in area to be installed with links to the commercial grid,” run by Niagara Mohawk (NiMo) at the time, and now by National Grid. That link allowed her setup to feed the grid if it was generating more power than she was using, and when she needed more, she just downloaded from the grid. Her bills are adjusted to reflect her contribution to the grid.
The system was installed in May 2004 by Scott Shipley and Eric Shultz, who at the time were subcontracting for Vermont Solar, she said.
Today, Shipley’s Northern Lights Energy is certified by NYSERDA to perform work eligible for the tax breaks and rebates, so the solar power business remains a going concern in the North Country.
Weitzmann’s system of 10 solar panels cost $15,900 in 2004. A NYSERDA grant paid $7,400.
She noted 2004 “was a sunny year. I paid nothing for power through December, owing NiMo only its minimum carrying charge, about $15 a month,” Weitzmann said.
“Sun on the 10 panels has usually generated between 1,500 and 1,600 kWh (kilowatt hours) per year, falling below that in only two years,” she said.
“I calculate it paid for itself by the end of six years though I'd need a professional analysis to prove it.
“The system is guaranteed for 12 years and will probably last much longer,” said Weitzman.
The power Weitzmann’s installation exported to the grid over 10 years has varied from about 33 percent to 70 percent month to month, more in the summer and less in the winter.
“By the end of the fifth year, 46 percent of power generated was going into the grid. In the 10th year, export is 57 percent. That's according to the inverter,” which has one meter on it, Weitzmann said. There is also a NYSERDA meter, which indicates 62.6 percent went to the grid. Weitzmann said she didn’t know which meter might be more accurate.
The government incentives for installation have changed over the years, and NYSERDA’s program for commercial installations is under review, with a chance for more incentives to come.
NYSERDA also offers loans for installations at some residential, small business and non-profit locations.
The incentives for commercial installations are similar, and while the state offers no tax credit for them, that could change, plus there is the normal depreciation tax benefit for a company’s equipment.
Shipley admits he might be biased because he sells and installs solar installations, but his experience is evident.
He also got an unsolicited endorsement from a Clarkson’s Powers who asked Shipley to see if her house would be a good spot for a solar installation. Shipley told her it would not. Meanwhile, the professor said, an installer she found at a home fair was ready to make a sale without a site inspection.
Shipley says solar power is often cited as the number-one source of new electricity generation, but it’s still a small part of the picture in most places.
Over the years since he installed Weitzman’s solar panels, “the costs have dropped dramatically and the efficiency of the panels has improved.”
But do the improvements justify going ahead and installing the panels on a roof in the North Country?
“For most people, yes, very much so, if they can take advantage of the various incentives,” he said.
At the same time there have been people “who wanted to do something for the environment even if it wasn’t necessarily the best economic choice,” but the return on investment is improving over time.
As for durability, Shipley said that there is “linear degradation” of the power of the panels, diminishing over time to perhaps 80 percent of the original output at the end of a typical warranty period of 20 years, but that a consumer could very get “another 50 years of reasonable production.”
While some enthusiastic web sources say it’s close, Shipley says that without the incentives, solar-electric power has still not reached “grid parity,” the point at which the cost matches what the power company sells it for.
“Maybe in the Netherlands or Hawai’i or Long Island, but not here, because we have relatively low-cost electricity compared with a lot of places.”
Those incentives are a way to try to balance the fact that “there are a lot more government incentives for the fossil fuel industry,” he said.
Efficiency Still Important
Still, it’s a lot of money to get a PV system up and running, so, Powers says, it makes sense to get a house as energy efficient as the owner can before getting a system design.
“If you’re a huge consumer of electricity, to get a PV system to cover your needs, the cost would be outrageous. And you might not have enough space on the roof” for the panels.
And someone who is determined to install the panels and get to generating electricity could be disappointed to find out that not every home site is workable.
“It doesn’t work everywhere,” she said.
There must be enough area facing south “at a reasonable angle – it won’t work on a flat roof. Trees – there can’t be too much shade…those kinds of caveats. It won’t work everywhere for everyone.”
To apply for the tax credits and other incentives, “you have to use a NYSERDA-approved contractor, and I highly recommend that. There are several in the area listed on the NYSERDA web site.”
“I looked into it myself,” Powers said, with different results from different contractors.
“There are some fly-by-night people just looking for the work. One vendor at a home fair just used an aerial photo and said he was ‘very positive’ about a system.”
But before she bit, Powers contacted Shipley. “He came out, looked at the trees and said ‘no.’
“You want someone to come look at the house and analyze it and make sure it’s right for your situation,” Powers said. The less efficient the setup, the less in incentives it will qualify for, so it’s worth it to get a conscientious contractor, she said.
“Some would say it’s not worth my tax money” to subsidize solar installations.
But even if it wouldn’t work at her house, Powers is still a proponent of expanded use of things like solar energy.
“We must get over the hump of the costs. The more we buy, the more manufacturing of solar panels there will be, and the cost comes down. In another decade or so, maybe it can stand on its own without the incentives.”