Solar power shines bright for consumers

FORT COLLINS – Mark Easter and his wife, Jan Moraczewski, knew they wanted to “go solar” and use the power of the sun to help cut their electricity costs, but the $20,000-plus upfront investment was daunting.

Then, last May, the couple found that with financial incentives from Xcel Energy and the federal government to encourage solar energy use they could buy a $21,000 system sized for their northwest Fort Collins home and only have to pay about $6,500 out of pocket.

“What made it affordable to us was we think it’ll eventually generate about all of our electricity,” Easter said. “This system will probably outlive us and we probably won’t have to pay energy bills for the rest of our lives. The rebates and the federal tax credit make it financially appealing and it fits with our values.”

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And thanks to Xcel’s Solar Rewards net metering program – one that provides credit to customers whose solar collectors produce more electricity than they use – Easter and Moraczewski will even get a rebate check at the end of the year rewarding them for helping the utility cut its electrical generation needs.

Tom Henley, an Xcel spokesman, said the state’s largest utility has paid out $19.5 million in rebates and energy credits to more than 1,100 net metering customers in Colorado. Henley said Xcel is interested in supporting renewable energy programs as it goes about satisfying Amendment 37 passed by Colorado voters in November 2004. The law required the state’s largest utilities to obtain 3 percent of their electricity from renewable energy sources such as solar and wind power by 2007 and 10 percent by 2015, with 4 percent of the mandated amount to come from solar.

Last year, Gov. Bill Ritter and the Legislature increased that overall renewable energy source requirement to 20 percent by 2020.

The measure also requires utilities to establish net metering systems for homeowners and small businesses to connect to the power grid.

Utilities climbing on board

Local utilities are also on board with solar power. Poudre Valley REA, which provides electric power primarily to unincorporated areas in Larimer County, has had a net metering program since late 2002, according to Jim Byrne, engineering manager. And the city-run Fort Collins Utilities – which gets its electricity from Platte River Power Authority – has had a pilot net metering program for almost three years, according to Norm Weaver, energy services engineer.

“The city is looking to make this pilot net metering program final,” Weaver said. “The expectation is to make it a permanent program before 2009. It’s fair to say there’s a growing interest by both residential and commercial in putting up these solar installations.”

But so far there hasn’t been a waiting list to get on the city’s net metering program. The pilot program was limited to a maximum of 25 customers, but as of late March there were only 11 residential customers and one commercial customer signed up.

Weaver said he believes interest in the program will go up sharply after it becomes a permanent program and when the cost of solar equipment begins to go down.

“New technology will offer lower-cost equipment,” he said. “I think the trend is for that equipment going down in price.”

Industry observers say they expect the cost of solar panels to drop by up to 50 percent in the next few years. AVA Solar, a company spun out of research at Colorado State University, is planning to open a manufacturing facility in Longmont to produce solar panels that are far cheaper than those on the market today.

And while solar power use has grown by almost 50 percent each of the last two years, it still makes up less than 1 percent of the nation’s total power generation, largely because of its upfront cost to consumers.

New law will help

Gov. Bill Ritter on March 27 signed into law House Bill 1160, which requires most electric utilities in the state to provide net metering programs to their customers. The law, which goes into effect in August, says a customer who generates more power than is used in a month will get credit for that extra electricity in subsequent months and that those customers will get a refund check or other credit at the end of the year.

The law limits residential customers’ net metering production to 10 kilowatts. Commercial or industrial generators are limited to up to 25 kilowatts of net metering.

Beth Hart, Colorado Solar Energy Industry Association president, said the sun is finally shining on the solar industry, thanks to Amendment 37; a governor who has placed a high emphasis on renewable energy; financial incentives and tax credits; and rising power costs that are making solar an attractive alternative.

“It’s taken a long time, but people are now saying that our ship is finally coming in,” Hart said.

Dan Bihn, a Fort Collins renewable energy market consultant who sits on the city’s utility board, said solar net metering programs are a good thing for customers but those considering an installation should forget about making any money on the proposition.

“You can’t really make any money by selling power to the grid,” he said. “(But) it allows you to get a net-zero energy bill by sizing your system to achieve that over a year.”

Such programs are also good for utilities, he notes, allowing them to help meet high demand periods. “It does reduce the need to build peakers (additional power generating facilities) that burn very expensive natural gas,” Bihn said.

But he is circumspect about a major stampede toward solar, which he says is still too expensive for many people because it is mostly produced overseas. He added that additional investments by utilities and governments on solar incentives and rebates would be better spent on reducing their “carbon footprint,” or greenhouse gas emissions caused by burning fossil fuels, until solar equipment comes down in price.