Energy Adviser: Incentives can help solar power pencil out

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The $46,000 price tag would be enough to deter many homeowners.

Not Matt Peterson. He recently installed a 6.4-kilowatt solar system on his house in Hazel Dell that ties into the public power grid. But then again, he’s looking at the long term.

With federal tax credits, a state incentive program and savings on his electrical bill, he hopes to recoup about $41,000 of that initial investment over the next decade or so.

“If I was going to do it, I wanted to maximize the possible incentives,” Peterson said. “I thought I’d save some money, and, hey, it helps the environment at the same time.”

With a federal tax credit set to expire in 2016, and a state incentive program sunsetting in 2020, more homeowners are joining Peterson.

“My phone rings quite a bit,” said Sam Walker, who administers solar energy programs for Clark Public Utilities.

Clark County has 90 solar installations, 70 on private residences. Thirty-six of those were installed in 2011, with another 20 going in so far this year. Clark Public Utilities administers the state of Washington’s production incentive program on behalf of the Department of Revenue.

When homeowners call the utility about installing solar panels, Walker asks them if they have implemented energy-efficiency measures first: Does the home have a heat pump, compact fluorescent light bulbs and good insulation? Are appliances energy efficient? Windows weatherized?

“Solar is expensive. It is not a cost-effective way to immediately lower your energy bill,” Walker said. “If that’s a homeowner’s primary goal, other energy-efficiency measures are a far better option.”

Once those measures are in place, a solar system might make sense, Walker said.

“Still, with incentives, there is still a decent payback,” Walker said. “People aren’t just doing this because it’s the right thing to do. They’re doing it because it’s a good longer-term business decision.”

Installing solar panels takes significant upfront investment. Peterson tapped Clark Public Utilities’ low-interest loan program for his project. He tried to comparison shop for equipment, but found pinning down costs a bit frustrating.

“Normally when you buy things you can get a price for them. With solar panels, they don’t give you what each one costs. It’s always a package price,” Peterson said.

Homeowners can expect to pay $5 to $8 per installed watt. “A 1 kilowatt system is going to cost anywhere from $5,000 to $8,000,” Walker said. “I recommend getting three bids.”

Solar World, for example, is a local producer of panels, but it’s based in Oregon. Prices may be lower, but homeowners maximize the state incentive only if they buy equipment manufactured in Washington.

Contractors can help with a price analysis taking into account tax credits and incentives, Walker said. The utility maintains a list of solar contractors on its website.

Take care when calculating how much you will save on your electrical bill, Peterson cautions.

“I had an overly optimistic expectation of production,” he said. He had hoped for a solar system that would generate all the power his family of five would need. On sunny days, he produces about 20 kWh, but his 2,200-square-foot house uses an average of 44 kWh a day.

Even so, he’s not sorry he installed a solar system. In fact, he has plans to expand it. Phase 1, as he calls it, began generating power in May, so he hasn’t seen a full month’s electrical bill yet. It’s one bill he’s eager to open.

Energy Adviser is written by Clark Public Utilities. Send questions to energyadviser@clarkpud.com or to Energy Adviser, c/o Clark Public Utilities, P.O. Box 8900, Vancouver, WA 98668.