Investing In Solar Power: Now’s the Time
– Published September 17, 2012
There might not be a better time than now to invest in the future of sustainable energy, according to local experts in the solar power business.
After first launching in 2003, the Tennessee Valley Authority’s Generation Partners program will be coming to an end at the end of the month, and the new Green Power Providers program will be taking its place.
Both programs offer a number of incentives for both residential and commercial projects to spur the development of small-scale renewable energy across the TVA’s service area.
With long-term contracts, tax credits, premiums at an all-time high at 12 cents per kilowatt hour for solar energy and installation costs at an all-time low, now is the time to get the most bang for your buck, according to Paul Sutton, business development manger for LightWave Solar, one of the leading solar installation companies in the area.
“2012 is the year to get the most premium for solar electric right now. That’s the highest premium that will ever be available for solar energy. Wind and all of the other renewable energy sources are getting 3 cents a kilowatt hour … so that’s why solar is such a good investment,” Sutton said.
Changes that come with the Green Power Providers program include lower premium amounts for applications signed in 2013 and load requirements that will limit solar system size, which could lead to lower returns.
Sutton said applications submitted by Sept. 30 aren’t guaranteed approval, however, the 12 cent premium is locked in until Dec. 31.
“Solar electric is a hedge against current and future electric costs. That’s all you’re doing. You’re hedging your money. You’re buying your energy now at a reduced rate. If you were to pay the next 25 years of electric all up front, you would pay several tens of thousands more than if you just paid it now. It’s an investment in energy,” he said.
When LightWave Solar, which only deals with solar photovoltaic systems, expanded their operation from Middle Tennessee to Johnson City in 2007, Sutton said they were the only solar electric company in the region.
As the number of their projects skyrocketed, so did the local solar market.
Earlier this year, city officials looked into the possibility of installing solar panel systems on roofs, parking lots and other locations at more than 20 city buildings.
That proposed agreement with Florida-based ESA Renewables was ultimately rejected by the City Commission, citing time constraints and issues with the 10-year renewable contract.
If passed, the deal could have helped the city reap about $1.5 million through the Generation Partners Program.
Although that deal fell through, there are a number of businesses and residential projects that have had solar panels installed.
Dick Nelson had 140 solar panels placed on the roof his downtown store, Nelson Fine Art Center. He received a $40,260 grant from the program for his $130,845 project.
Terry Revette, owner of The Bike Shop on Bristol Highway, earned a grant of $21,120 toward his $59,540 project.
Michael Brown received $26,000 from the Tennessee Solar Institute for his $84,240 project on the roof of his business, the Elizabethton Veterinary Clinic.
Sutton himself is wrapping up construction on a 50-kilowatt solar barn for a small sustainable animal and garden farm at his residence. The project has an estimated cost between $190,000 and $200,000.
High incentives, coupled with a significant drop in installation costs, have fueled the business more than ever before.
According to the company, a 50-kilowatt system, which is the highest system size allowed under the Generation Partners program, can generate more than $14,000 annually. Combined with a 30 percent federal tax credit, accelerated depreciation benefits and a $1,000 cash bonus from TVA upon installation, the payback period on a solar project can be as short as six years.
While that has certainly driven the number of projects up over the last several years, Sutton said interest has also increased because of people’s desire to be more sustainable.
“I see a lot of people who are really into saving the environment. They’re tired of all their money going to oil and gas and they’re trying to do something to help us be more secure from having to get foreign imports,” he said.
The move toward renewable energy stems from the U.S. Department of Energy’s goal to have a more widely distributed energy model, which Sutton said is partly why TVA created these incentive programs.
“It strengthens the grid by doing that. That helps cut down maintenance cost and substation upgrades … and then you increase the sustainability of that utility,” he said.
For more information on TVA’s renewable energy programs, visit www.tva.com/greenpowerswitch.