Green Martha : Solar power - expensive, but worth doing the math
By Steve Myrick
Published: February 11, 2010
Solar energy generated by photovoltaic panels remains an expensive proposition on Martha's Vineyard. But, substantial federal and state incentives can reduce the up-front cost of a residential solar energy system by as much as 50 percent, according to state estimates, which can make the renewable energy source competitive with conventional electricity bought from a power company.
At the 250 State Road affordable housing project, solar panels are part of the ultra-energy efficient architecture. Click on photo to enlarge."Right now, it's about neck and neck," said Kate Warner, who through her company Under the Sun has installed more than 80 solar systems on the Island. The payback formula gets a bit complicated, since no one can predict the cost of conventional energy. But, in its most basic form, the equation is the cost of the system, minus the available rebates and tax savings, minus the amount of energy you don't have to buy over the presumed 20-year life of the solar system. If that figure is less than the cost of conventional electricity over the same time span, you save money.
"It's as if somebody was buying 20 years of electricity up front," Ms. Warner said. "My feeling is the cost of [conventional] electricity is never going to go down, because electricity is tied to the cost of fuel."
The cost savings do not include the benefit of clean power, just as the price of conventional electricity does not include all of the cost of environmental pollution.
According to ISO New England Inc., the not-for-profit corporation that manages power distribution and wholesale markets for the region, each 1,000 kilowatt hours generated by photovoltaic systems avoids sending .53 pounds of sulfur dioxide, .29 pounds of nitrogen oxides, and 999 pounds of carbon dioxide emissions into the atmosphere.
Massachusetts uses a system of monthly "net metering." If a homeowner produces more energy than he needs, the excess power is sold back to the electric utility in the form of a credit. The electric meter literally spins backward. There is a movement to establish annual net metering. That would allow a homeowner to "bank" credits in the summer months, when the system is producing at its peak capacity, to use in the winter months, when the system is making less electricity.
State incentives are a complex maze of rebates, tax credits, and grants. The primary residential benefit is a $1 credit, up to $5,000, for every watt rated for the solar system. The incentive formula is weighted heavily toward lower income families and year-round residents. Ms. Warner has had mixed results in navigating the difficult maze of state rebates.
Solar energy is growing faster than predicted in Massachusetts, so in past years the programs have run out of money for incentives.
The federal program, however, is very simple and effective. It provides a flat tax rebate for 30 percent of the cost of the solar energy installation. "That's a very good thing," Ms. Warner said.
State of the technology
Solar energy systems have become more efficient and more reliable over the years, but the mass market technology has not changed much. Photovoltaic cells, usually deployed in a panel array either on a south facing roof or on the ground, convert the sun's heat into electricity. The energy flows out of the panels as direct current to an inverter, which turns it into the alternating current needed to run lights, appliances, and sometimes heating systems. Some newer systems have individual inverters on each panel, but they have not been widely adopted.
"Although these new systems come with sophisticated sensors, you've got many more places for things to go wrong," said Ms. Warner. "You want to be sure there's a certain solidity behind what you're offering. I use the most efficient modules I can, but I haven't been leaping toward the latest and greatest."
In many cases, simple conservation techniques can yield a bigger cost savings than the latest technology.
"The first people that want to know about solar are the people with big electricity bills," Ms. Warner said. "Until they do the energy efficiency stuff, solar doesn't really make sense. If you go out and buy a new refrigerator for a thousand dollars, the amount of energy that that might save you is often greater than the amount that the same thousand will generate as part of an investment in a solar system. Doing things like getting a more efficient refrigerator, changing light bulbs, turning things off, insulating your home, all of those things save you money."
