An article by John Roach, NBC News.
EATTLE -– Going solar is expensive, but a confluence of plummeting equipment prices, rising utility bills, new financing schemes and a raft of federal, state, and local incentives are encouraging homeowners across America to take the plunge and put photovoltaic panels on their roofs, even in rainy Seattle.
In 2013, 792 megawatts of solar capacity was installed on homes. That figure is expected to increase 61 percent in 2014 and another 53 percent in 2015, according to the Solar Energy Industries Association, a Washington-based trade group. A megawatt of solar capacity is typically enough to power 200 average U.S. homes, though the number varies depending on factors such as available sunlight and panel orientation.
On a recent drizzly July morning here, homeowner Brian Palmer gestured out the window to the falling rain. There, workers in slickers from a local solar energy company prepared to put photovoltaic panels on his roof, one of the hundreds of such installations that occur daily across the country.
“Seattle is one of the most overcast cities in America. It is infamous for how rainy it is,” the software engineer said. Yet, he added, it is just as cloudy in Germany, which leads the world in the number of solar-powered homes. If it works there –- and it does –- it will work in Seattle. Palmer’s neighbor has had a solar system on his home for several years.
Palmer’s 6.48 kilowatt system cost $30,380 fully installed. The federal government will give him an income tax credit for 30 percent of that bill. As a resident of Washington with Washington-made equipment, he’ll also receive $0.54 for every kilowatt-hour of solar energy his system produces up to $5,000 a year. What’s more, the local utility will purchase his excess electricity at the retail rate, which in Seattle is currently $0.11 per kilowatt hour at peak demand.
With all of the incentives factored in, Palmer reckons it’ll take ten years to pay off the home equity loan he used to pay for the solar system and about $40,000 for a new energy-efficient home heating system, insulation, and to seal leaky windows and doors. “I would rather be paying that money toward paying off this investment,” he said, “than just having it pour down the sink.”
For those who balk at the upfront cost to invest in solar, a new leasing model has emerged in recent years that is pushed by companies such as California-based SolarCity. The company owns the equipment and installs it on its customers’ homes. In turn, customers pay the company as they would a utility for the electricity the solar system generates, but typically at a lower rate.
“There are a lot of people who want to do something positive for the environment, they want to use cleaner energy, but there is a smaller set of people that are willing to make a financial sacrifice to do it,” said Jonathan Bass, a SolarCity spokesman.
The company serves 15 states, including Washington on a limited basis as well as California, Colorado, Arizona, Hawaii, and much of the Northeast. It currently installs between one in three and one in four of the new solar systems in the country, according to Bass.
Lease agreements indeed are fueling much of the growth in the residential market around the country, according to Dave Kozin, president of Solar Washington, a Seattle-based trade group. However, the incentive program in Washington, he explained, isn’t available for leased systems. Rather, it is structured to encourage residents to purchase and install Washington-made equipment. This makes it difficult for SolarCity to turn a profit in Washington, Bass explained.
Penetration and pushback
Currently, 0.6 percent of the nation’s total electricity generation comes from solar. Penetration is expected to reach 1.6 percent by the end of 2015, according to the Solar Energy Industries Association. A solar installation is completed in the United States every four seconds, the association said.
A recent report from Bloomberg New Energy Finance in New York predicted a 27-fold increase in rooftop solar between now and 2030, but clouds are on the horizon.
Many incentive programs are winding down or are soon to expire, and electric utilities are pushing back against policies that require them to pay homeowners for their excess solar electricity. The solar industry is concerned the incentives may end before the industry is ready.
Much of the pushback stems from maintenance and upgrades to the electric grid. The retail price of electricity includes the infrastructure to deliver it such as power lines, substations, and transformers. As more people generate their own electricity and sell the excess back to the grid, the more utilities are compelled to pass on the maintenance costs to other consumers.
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