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Stone Marmot Goes Solar: Part 1

By Sid of Stone Marmot

Nov. 20, 2009

We have for many years now been saying that we were going to eventually run our house and studio off solar power. Many of my friends have also asked me if they should add a solar electric system to their houses. But we have held off and I have been recommending to others to hold off because the time and economics weren't right. That is, until the past couple months. I feel the time is optimum right now, at least here in Florida.

What has changed?

1) The US federal government is offering a 30 % tax credit on any solar electric system, good until 2016.

2) The state of Florida is offering a rebate of $4 per installed Watt for grid-tied photovoltaic systems. The system must have at least 2000 W of panels installed. Since the maximum rebate for a private residence is $20,000, the maximum installed Watts that will be rebated is 5000 W. The system must be professionally installed and the application received by June 20, 2010.

3) The costs of photovoltaic (PV) panels has dropped dramatically this year. High demand in other countries a few years ago spurred many manufacturers to build more production facilities and ramp up production. But the present deep recession has caused demand to plummet this past year. So, there is presently a glut of PV panels on the market. Add to this the threat of China dramatically increasing its PV panels production capability and potentially flooding the market in the future, which is further pushing down prices.

4) The Florida government has “convinced” the power companies to offer more favorable terms to consumers who feed PV power into the grid. Before, in my area (Pinellas County), the consumer was only credited the cheapest wholesale rate that the power company paid (typically about $ 0.025/kW-hr.) for any power he fed into the grid, and any excess credit beyond the consumer's actual use was forfeited at the end of the year. Now, net metering is used, where the consumer is credited for any power fed into the grid at the same rate that he is charged for any power consumed from the grid. Any excess generated beyond what is consumed by the consumer is now credited at the end of the year at the average wholesale rate the power company pays (presently about $0.045/kW-hr). Also, the application procedure and requirements are much simpler, with no fees.

All this has made it much more attractive, financially, to install grid-tied PV power on a private residence here in the Sunshine State. The price of professionally installed systems has fallen from over $9 per installed Watt to around $7 to $8. $4 of that is rebated by the State of Florida. 30 % of the total is returned as a tax credit by the Federal government. These two things alone mean that a buyer can get between 60 % to 90 % of his initial cost back from the various governments. Add in the savings on electric bills, PV systems can now pay for themselves completely in less than 10 years, often much less. And this doesn't even take into consideration possible income from carbon taxes, cap and trade, feed-in tariffs, or any of the other global warming mitigation initiatives being discussed and even going through legislature right now.

Since PV prices are falling, might it be better to wait some more? Probably not. PV panels themselves are right now selling for typically $4/W, with some selling for under $2.50/W. The Florida state rebate is $4/W and goes away at the end of June. Because of the present budget crunches, it will probably not get extended. With this rebate, Florida residences are effectively getting the panels for free or even being paid to buy the panels. PV panels prices would have to fall to being free or being paid to take them to match this rebate once it goes away. And a potential buyer must act now to select an installer, get the system scheduled and installed, and get the paperwork in by the end of June. Waiting any longer is cutting it close and risks missing out on the state rebate.

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