The price of solar photovoltaic (PV) modules has fallen 60% from 2007 to 2012. At the same time, Appalachian Power and Wheeling Power (both subsidiaries of AEP) customer’s electric utility bills have increased nearly 60%. Solar electric systems are inflation-protected investments because they offset electricity costs at current rates. As rates rise, the solar PV system owner’s savings are even greater. Once installed and commissioned, solar PV systems appreciate over the lifetime of the system (greater than 25 years). This is because of the increasing annual savings as electric rates rise. These issues and those discussed below are allowing more and more residents of the Mid-Ohio Valley region to consider solar PV.
In a growing number of sunny countries and off-grid locations, solar power is now competitive with the retail price of electricity. When the time of generation is included (electricity is worth more during the day than at night) solar PV is competitive with conventional sources in even more regions. With the continued adoption and expansion of renewable energy technologies such as solar PV, the costs will likely continue to decline. How long a solar electric system takes to pay for itself depends on the local solar resource, the siting and design of an individual system, utility rates and financial incentives.
Luckily, good sunlight or an adequate solar resource is available to almost everyone in the continental United States. The available sun-hours (or the equivalent number of hours per day when solar irradiance averages 1,000 watts/meter2) are comparable in West Virginia to neighboring states. However, not every location, roof or area of ground is appropriate for a solar electric system. A solar PV site assessor can determine if there is adequate roof space at the best orientation and pitch. Time to payback can be shortened several months by addressing shading issues from trees and other structures. Once an adequate site is determined, a NABCEP™ certified solar PV installer can match module output with inverter size. Seemingly minor system design details such as correct wire diameter and limiting the length of conduit runs can increase overall system efficiency and return on investment.
Higher electric utility rates, net-metering and financial incentives make solar PV an attractive investment. West Virginia’s electric utility rates are low compared to surrounding states, but as alluded to above, rates will likely rise as inflation and the cost of extracting and burning coal continues to rise. The West Virginia Public Service Commission (PSC) approved net-metering in 2006 and updated the procedure in 2010. In areas where net-metering laws exist, solar energy offsets the retail cost of the electricity generated. Once net-metering is established, the net number of kilowatt-hours (kWh) for billing purposes is determined by subtracting the amount of electricity flowing from the customer to the utility from the amount of electricity flowing from the utility to the customer. This net excess generation (NEG) may be carried over to a customer’s next bill as a kWh credit at retail rate and rolled over indefinitely.
Direct incentives for solar PV include tax benefits such as credits or depreciation. The federal tax credit for solar systems went into effect in 2006 and beginning in 2009, the $2,000 cap has been lifted. Instead the credit is 30% of the total out-of-pocket cost with no cap. This credit is a reduction in total personal tax obligation and can be rolled over if there is not enough tax liability the year of the install. State and local incentives vary widely. West Virginia passed legislation in June 2009 authorizing a solar energy tax credit that is also 30% of the total system cost. This credit is capped at $2,000.
Solar PV is now available in the Mid-Ohio Valley region and Pickering Energy Solutions has the local expertise to site, design and install rooftop and ground-mount residential solar electric systems. The entire geographic region has an excellent solar resource. Now with higher (and potentially rising) electric utility rates, the PSC’s net-metering rules and federal and state financial incentives, the time may be now for solar in West Virginia.
About PES:
Established in 2012, Pickering Energy Solutions is a growth oriented company focused on making renewable energy systems a reality for residential and commercial building owners through direct sales or through a Power Purchase Agreement or Power Leasing arrangement.
About the Author:
Lance McCoy serves as Communications Director for Pickering Energy Solutions. Lance is a green-minded entrepreneur and is a Certified Photovoltaic Site Assessor through MREA.
