The purpose of this post is to review the solar power options in the State of Oregon, however some of the information reviewed here may be applicable to other states. Clean free solar power sounds great, but do the numbers add up?
Also remember that any information presented here is current as of June 2013, but parts of it will be obsolete as soon as it is published.
Most home solar installations max out at 3 KW capacity simply because after that point there is no Federal or State tax credits to help out with the cost of the installation. At about 240W to 250W per panel, this comes out to 12 solar panels, each measuring about 3 ft by 5.5 ft.
Of course 3KW per hour is the maximum possible capacity. In reality there are many factors that effect the solar power production: the season (winter or summer), the weather conditions (the cloud cover), the parallel of the installation location (how far away from the equator), and the geographical conditions (mountains/trees/buildings blocking the sun).
Considering all of the factors above, a typical south facing installation in Beaverton will generate on average 4.2 hours of power per day. (source?).
Panels lose 0.3% of their generating capacity per year.
Panels and inverters are guaranteed for 25 years, but will work for 35 to 45 years.
The solar power installation needs to be approved by 4 different organizations before it is turned on and becomes online:
- Portland General Electric (PGE)
- Washington County
- Energy Trust of Oregon
- Home Owners Association (HOA)
The most important approval in this list is the third one, Energy Trust of Oregon. Because without their approval, you don’t get any Federal / State tax credits or any incentives from Energy Trust of Oregon.
The Energy Trust incentive rate is 75 cents per Watt. For 3KW system, it comes out to be $2250. Both the Federal and State tax credit is 30% of the cost of the system. There are some restrictions on claiming these credits, but you have 7 years to use them up.
An example installation from Advanced Energy Services would cost $9000 for the first KW (each panel + inverter = $2250), and $14200 for the remaining 2 KW (each panel + inverter = $1775). The price goes lower for additional panels and inverters after the first KW of installation. Note: prices are probably different now, call them for current prices. So the total cost of a 3 KW system would be $23,200.00.
You can use the Energy Trust credit immediately. The Federal Tax Credit would depend on your tax situation. And there is a limit of $3000 per year for the Oregon State Tax Credit. After all the discounts and tax credits, The net cost to the customer comes out to be about $8100.
Considering that you will generate 4599KWhr (4.2 x 3 KW x 365) in a year, which equals to $505.89 (at 11 cents per KWhr), it would take 16 years for it to pay for itself ($8100 / $505.89).
PGE solar power options
PGE has two options for solar power: Solar Payment Option, and Net Metering. Either way, a new electric meter will need to be installed. Current smart meters cannot be used with these options.
PGE Solar Payment Option
In this option PGE buys the solar power that you generate at the rate of 37 to 39 cents per KWhr. It is like you become a micro power company generating and selling power. If you jump through all the hoops AND if you are lucky, PGE will start sending you checks every 90 days for the power you generate.
I say if you are lucky, because if there are more people applying for this program than there are available funds, PGE picks applicants by lottery.
Minimum installation size is 5KW, so you will need a lot of space for all those panels. You will need to include $500 with your application to be refunded to you after your application is processed.
Note that you will have your plans, drawings, costs etc and attach these documents to your application. Once approved (or if approved), then you can start the actual project.
It is important to remember that in this option there are NO State Tax credits, NO Federal Tax credits, and NO Energy Trust incentives, so the upfront costs are higher.
For more details see the PGE website on this link.
PGE Net Metering
In this option, the solar power the panels are generating are fed back into the grid measured by the second electric meter. This would happen during daytime, if the panels are generating more power than your house is using up.
If you are generating more power than you are using in a billing cycle, your bill could be zeroed out (except probably for the $12.29 fixed service charge). The excess power you generate will be rolled over to the following month until it is used up. But at the end of 12 months, if you still have a power credit, PGE will pay you at the whole sale price (2.5 cents per KWhr).
For more details see the PGE website on this link.
Third Party Installation
The biggest problem with the previous approach is that you have to come up with a lot of cash upfront. A way around that problem is to go with a Third Party Installation.
An example installation from SolarCity works like this. SolarCity installs the panels on your roof at no cost to you. You buy the power from them at a fixed rate (25% lower than the PGE rate) for the term of the contract (20 years). At the end of the contract, you own the solar installation for free.
The number of panels to be installed depends on the average power that you use. They install enough panels to zero out the electric meter. However, if you use more power than the panels generate, you will get a bill from PGE for the difference.
Of course there are some unanswered questions. PGE bills a base rate of $12.29. Will you be still getting this bill? How will you know how much power the panels have generated without the second electric meter connected to the solar panels? When I talked to the representative, it sounded like the SolarCity bill would be fixed at the average power usage in the past two months. What if I use less or more power than the average amount?
Another question is related to the Federal / State Tax credits and the Energy Trust incentive. Who gets them?
Home-brewed Solar System
If we go back to the previous example of owning the solar installation outright and price the individual pieces in the open market, you could buy the inverters and the solar panels on your own, and hire the licenced roofing contractor on your own. If you managed the project yourself, the cost would be much lower.
The only problem with this idea is that the Energy Trust will work with only the Energy Trust approved contractors. You wouldn’t get any tax benefits or the Energy Trust credit, but it may still be worth it.
The root of the problem here is that the power is generated during the day time when it is not needed. To send this power back into the grid requires the approval of PGE. However, if the power were to be stored into batteries to be used later, no approval would be needed from anybody. None of the systems available in the marketplace currently offers this option, because batteries are not easy to deal with.
But small scale systems can be built around this idea. Solar cells are pretty cheap. You could build a solar charging station to charge anything chargeable in the house. This might be one of my next projects to work on.