Until recently, the most common use for a rooftop in the realm of solar power generation was for a solar water heating array. In the not-so-distant past, this made sense. Electricity-generating photovoltaics were expensive and had a relatively short life, while rooftop water heaters were inexpensive and simple. Using nothing more hi-tech than a garden hose left out in the summer sun and a holding tank, rooftop water heaters were capable of augmenting a household’s hot water supply for very little money. But the drawback to this technology is simple: hot water is all that it can produce.

Here are a few simple facts:

Today, the lifespan of a solar cell is 25 to 30 years and the cost recently dropped dramatically (PV warranties are typically 20 years while solar hot water systems are typically only guaranteed half the time or less). Solar cell production in the United States is growing at nearly 50% per year, and this is driving down the price. At the same time, companies such as General Electric and the German firm Stiebel Eltron have made extraordinary developments in “heat pump” technology, and are now marketing heat pump water heaters with up to 62% increases in heating efficiency.

Given this, if your home already utilizes a rooftop water heater, it makes sense to consider replacing it with a new, high-efficiency electric water heater and provide the needed electricity with a new photovoltaic array. If you haven’t yet invested in new, green energy alternatives, then - with all of the new technology emerging - this option is clearly the preferable choice.

There’s another way to look at this as well—it’s a matter of personal choice and options. With a rooftop solar water heater, you have dedicated your roof to the production of hot water. Now, this probably made sense when it was originally installed. After all, the electricity that would have been used to heat the water is conserved and results in some savings, but there are many downsides to these old units. In most systems, the water needs to be circulated through the pipes to avoid overheating and that requires the use of electricity to drive the pumps. Additionally, any time you and your family are away from home, the energy is wasted. On a vacation for example, when no hot water is used the system actually results in a net cost because of the continued action of the electric pump.

But with photovoltaics, the choice of how to use the electricity and savings is yours. Replacing the old rooftop water heater with solar panels allows the production of electricity which can be used as you please. It can heat water with one of the new high-efficiency heat pumps at an even lower cost than pumping an active rooftop system with an inefficient electric water pump. And when it comes time for that vacation, well, while you’re away nothing is wasted. The PVs continue to produce electricity and the hot water heater can be switched off.

Increasingly, your rooftop is becoming the most valuable piece of property you own. In the new green energy economy, your rooftop has the potential to be a money-making power plant, and so to commit it to the simple heating of water, particularly when there are so many other uses, is a short-sighted investment.

The new heat pump water heaters from General Electric, Stiebel Eltron, and others, allow for more choice than homeowners have ever had before when it comes to green energy production and use.

Something new is happening in the “green energy revolution” almost every day. Renewable energy sources are coming online everywhere and becoming more efficient, and new ideas in solar power are revolutionizing the way that individuals and businesses produce and use electricity.

But this explosion of new ideas extends beyond the technology. New concepts in the economics of solar power are opening up new opportunities for people who might have thought that a new solar installation would be too expensive.

One of the most exciting new ideas in the world of solar power that’s come along recently is the “solar lease”. This is basically a way to pay for a solar installation while still lowering your utility bill, just by using the electricity generated by the power of the sun. Solar leases are already available for commercial application in Hawaii and residential solar leases are sure to come soon. It’s a great option for people who might like to spread cost over time, or lower the up-front cost of an installation.

Basically, a solar lease is a way of financing a solar installation based on the potential for future energy production. It’s as simple as leasing a car, but the lease is paid for by the photovoltaics themselves and the resulting total monthly savings. As for the security of the investment over the long term, well, there are few bets as safe as the generating capacity of solar cells in sunny Hawaii.

Here’s a simple breakdown of how it works.

Let’s take the example of a typical residence with favorable conditions such as a good, south-facing roof angle (or the ability to install panels at that angle). Let’s assume that a monthly utility bill from one of the state’s utilities (HECO, HELCO, or MECO) will be about $200. For this scenario, we will assume an installation of a modest system which has the capacity to offset the monthly bill by 75%, resulting in a $50 bill each month. The solar lease payment will vary depending on a wide variety of factors, but it is reasonable to assume that payments would end up being around $100 a month. This means that from the outset of this green energy venture, your household would be saving $50 a month.

There’s another important factor in understanding the value of a solar lease, and that’s the reason why it’s impossible to calculate total savings over the life of that lease. The reason is that energy prices and utility rates will continue to rise, but the lease payment negotiated prior to the original investment will be locked in for the duration. You will continue to save money for years (or decades)—it’s just a matter of how much. The upward fluctuation of prices is particularly pronounced in the state of Hawaii because of the isolation of each island’s generating stations and the distance from the mainland. Solar power generation is a good way to insulate yourself from these swings in utility costs.  

With the ability to generate your own electricity, you might as well have a money tree sprouting in your garden. Under normal conditions, even a modest system will generate enough electricity to reduce your monthly bill by more than the amount of the monthly lease payment, effectively creating the opportunity to install and operate a solar energy system for free.

Last week, we tried to give you a roadmap of some of the great incentives currently available to residential and commericial solar customers. A few months back, our President, Sean Mullen, authored a great piece for Pacific Business News entitled, "Solar Investment: The Time is Now, Right Now" in which he laid out precisely the level of combined savings available to Hawaii customers and made the case for why now is the time to invest in solar. In case you missed it, we've included it below. 

The economic outlook may be uncertain on many fronts, but 2010 holds definite promise for Hawaii business owners looking to take advantage of renewable energy—though smart investors must be keenly aware that the clock is ticking.

Change is on the horizon for both the state and federal solar tax incentive programs. Currently federal incentives are available as either a 30% tax credit or as a 30% cash grant, but the cash grant program expires at the end of 2010. Similarly, Hawaii’s state incentives are available as either a 35% tax credit or 24.5% refundable tax credit. Unfortunately, not only is the federal grant expiring, but there is significant uncertainty as to how long the state refund program will last as well. Combined, these incentives can offer up to 54.5% cash back, or a 65% tax shield depending on your tax appetite.

In a slowly recovering economy, safe investments are few and far between, and even fewer are those predominantly paid for by the government, but business owners must act soon to benefit from both the state and federal ‘cash-back’ programs.

And the urgency doesn’t end there—the cash-back federal incentive requires that qualifying systems be installed and operational by December 31st, 2010. This deadline, along with the expiration of the federal cash grant, is sure to generate a drastic Q3-Q4 draw down in manufacturer supply due to imminent nationwide demand. As such, if organizations do not commit to a photovoltaic system purchase early in the year, it is very possible that hardware will simply be unavailable as the calendar comes to a close.

So act now, right now, to take advantage of opportunities that may never be available again. Turn to Sunetric, Hawaii’s solar authority, and gain a crystal clear view of the ideal energy investment options for you, your company and Hawaii.

Sean Mullen, President

Sunetric CEO Alex Tiller authored an opinion editorial for the Pacific Business News on the effects of a new “decoupling” plan approved by the Hawaii Public Utilities Commission to encourage greater energy efficiency beginning in 2011. According to Tiller, an imminent rise in electricity rates as a result of decoupling earnings from energy consumption should lead to increased demand among households and businesses for solar. 

When Hawaiian Electric, Maui Electric and Hawaii Electric Light adopt decoupling next year, they will see an immediate gain in their returns on equity. Maui Electric, for example, is currently operating at 5.2 percent ROE. Under the new decoupled rate system, MECO will be guaranteed a 10 percent ROE to meet a peak demand of 240 megawatts (although peak demand in December 2009 was 190 megawatts). The idea is that costs per kilowatt hour are based on total operating costs divided by peak demand. But this means that costs per kilowatt hour actually go up as demand goes down.

In HECO’s recent PUC filing, it proposed that each of the island utilities raise rates gradually each month for the remainder of 2010. This will likely result in a monthly increase of 5-10 percent beginning in April or May and continuing through December.

The bottom line? Consumers — even those who make a conscious effort to use less energy overall — will pay more per kilowatt hour for their electricity, and may see a significant increase in their utility bills."

Read more here.

 

Sunetric has been working since 2004 to bring photovoltaic installations to hundreds of Hawaii homeowners and business who have enjoyed greatly reduced — and sometimes completely eliminated — electric bills.

Thanks to generous state and federal tax incentives and loan programs now now is perhaps the best time ever to invest in rooftop solar photovoltaic panels if you own a home or operate a business in Hawaii. Here is a list of some of the incentives currently available to residential and commercial customers. Call us today at 808-262-6600 to find out how you can begin to take advantage of these discounts!

Tax Credits

 

 Residential

• Federal
  • 30 % Federal Tax Credit: The Energy Policy Act of 2005 (H.R. 6, Sec. 1335) established a 30% tax credit for the purchase and installation of residential solar electric systems. Individuals may take a 30% credit for each photovoltaic system. If the federal tax credit exceeds tax liability, the excess amount may be carried forward to the succeeding taxable year. To be eligible for the credit, a system must be "placed in service" or activated on or after January 1, 2009, and on or before December 31, 2016. (Note: There is no longer a $2,000 cap on qualified solar electric property expenditures for systems installed after December 31, 2008.)
  • 30 % Federal Tax Grant: Federal incentives are available as either a 30% tax credit or as a 30% cash grant, but the cash grant program expires at the end of 2010.
• State:
  • 35 % Hawaii State Tax Credit: There is a state tax credit for 35 percent of the cost of equipment and installation of a solar PV system. No set expiration date but as supplies last. A credit that exceeds the taxpayer's income tax liability may be carried forward to subsequent years until exhausted. Credits are capped based on property and system type as follows (read more).
  • 24 % Hawaii State Refundable Tax Credit: The Governor recently signed Senate Bill 464, which makes the state renewable energy credit refundable for taxpayers who agree to accept a lower credit of 24.5%.

Commercial

• Federal:
  • 30 % Federal Business Solar Tax Credit: The federal government allows businesses to take a credit worth 30 percent of the installed cost of solar photovoltaic systems through December 31, 2016. The five-year accelerated depreciation allowance for solar property is permanent. This incentive is also available as a 30 percent tax grant until the end of 2010. (See key provisions)
• State:
  • 35 % Hawaii Renewable Energy Tax Credit: Hawaii allows businesses to take a credit worth 35 percent of the installed cost of photovoltaic systems for the tax year that the system is placed in service. The credit has no sunset date and can be carried forward to offset taxes in subsequent tax years. The Governor also recently signed Senate Bill 464, which makes the state renewable energy credit refundable for taxpayers who agree to accept a lower credit of 24.5%.  (See key provisions)
• MACRS - Moderated Accelerated Cost-Recovery Systems (Federal and State): Both the Federal Government and the State of Hawaii allow solar systems to be fully deducted over a five-year lifetime. The schedule for this 'five year property' actually unfolds over six years to account for the fact that systems are not operational from the first day of Year 1. The value of the accelerated depreciation schedule depends on the tax rate of the entity purchasing the credits. Under MACRS, solar equipment is treated for depreciation purposes as follows:
  • Depreciation is front-loaded in 2008 relative to previous years because solar equipment qualifies for 2008 'bonus' depreciation of 50%. This bonus reduces the remaining depreciation schedule by half in Years 1 through 6. In 2009, the depreciation schedule is the same as in earlier years, however, when the federal tax credit falls to 10% the depreciable basis of the project rises from 85% to 95% of the installed cost.

Green Loans

• UH Federal Credit Union is now offering Green Loans. Find out more here.

Maui Electric Company (MECO) announced this week it will increase the Net Energy Metering (NEM) system cap from three percent to four percent of system peak demand, paving the way for more households and businesses that own or lease an eligible renewable energy generator to take advantage of the benefits of connecting their systems to the utility grid.

Net energy metering is playing a crucial in the expansion of renewable energy across the U.S. In Hawaii it is key to our clean energy future and reducing our dependency on oil imports. Whether you are a residential or commercial customer you can get more value from the electricity you generate with your solar system by offsetting the purchase of electricity from your utility against excess electricity produced by your solar system at the retail rate.

As part of the NEM program, you use the electricity generated by your system to supply your own needs and purchase any additional power you need at the regular retail rate. At certain times, your system may generate excess power that it exports into the utility grid. Without net metering, if you had a power purchase agreement from your electric utility, you would be compensated for that power only at the lower wholesale rate.

When the sun shines and your solar panels are generating more energy than you're using, you ‘deposit’ energy in the power grid. At night, you withdraw—and the extra energy you generated during the day is 'rolled over' into your account at no cost. At the end of the month, if you deposited more electricity than you used, you'll receive a credit from the electric company. If you used more than you deposited, you'll receive a bill.

Here is the formula:

Kilowatt-hours from utility
- Kilowatt-hours self-generated and fed to the grid
= Net kilowatt-hours

Under Hawaii state law, the cap on the total power producing capacity of generators signed up to take advantage of net energy metering is set at three percent of each electric utility’s system peak demand, and the actual number of customers allowed to sign up before this cap is reached depends on the combined size of the individual renewable energy systems. On Oahu, 40 percent of the cap is reserved for systems of 10 kW or smaller; on Maui and Hawaii Island, 40 percent of the cap is reserved for smaller systems.

MECO’s decision to increase the NEM cap follows a December 26, 2008 order issued by the Public Utilities Commission (PUC), which calls for MECO to notify the commission when applications on the MECO system exceed 75 percent of the 40 percent of the current three percent cap on system peak demand allocated to systems less than or equal to 10 kW. Pursuant to the PUC order, MECO must move to increase the NEM system cap from three percent to four percent of system peak demand in order to accommodate the continuation of NEM growth in Maui.

Follow the bill here.

The Solar Energy Industries Association just launched a new campaign website inviting consumers to sign a Solar Bill of Rights intended to encourage lawmakers to provide policy support to deploy more solar, sooner.

More than 1,100 individuals have already taken the initiative to sign the Solar Bill of Rights. By signing your name you join voices with other Americans to urge lawmakers in Washington D.C. to give the U.S. solar industry a fair competitive environment.

SEIA’s eight rights include:

1. Americans have the right to put solar on their homes and businesses
2. Americans have the right to connect their solar energy system to the grid with uniform national standards
3. Americans have the right to net meter and be compensated at the very least with full retail electricity rates
4. The solar industry has the right to a fair competitive environment
5. The solar industry has the right to produce clean energy on public lands
6. The solar industry has the right to sell its power across a new, 21st century transmission grid
7. Americans have the right to buy solar electricity from their utility
8. Americans have the right to – and should expect – the highest ethical treatment from the solar industry

For more information on the Solar Bill of Rights and the eight individual rights, visit: http://www.solarbillofrights.us/

Solar energy is a clean, reliable energy source that is creating tens of thousands of American jobs that can’t be exported.

A new report on environmentally progressive cities ranks Honolulu third among 43 U.S. metropolitan areas.

The Green Cities Index, compiled by American City Business Journals – owner of Pacific Business News – judges metro areas on a host of environmental factors, including traffic congestion, transit use, water quality, carbon emissions, LEED-certified projects and number of green jobs. Data from a variety of government and research agencies is used in the analysis.

Honolulu ranks first for least amount of carbon emissions per capita, second in sprawl, third for the number of LEED architects per capita, sixth for use of public transit, 15th in green jobs per capita, 31st in LEED-certified projects, and 33rd for travel time.

ACBJ analyzed the 40 markets in which it has business dailies, plus Los Angeles, where the company operates a business news website, and Indianapolis and Cleveland. West Coast cities dominated the top three: Portland-Vancouver-Beaverton metropolitan in Oregon and Washington ranked first while California’s San Francisco-Oakland-Fremont area ranked second.

Much has been made recently about Bloom Energy’s Bloom Box, a self-declared “power plant in a box” for just under $1 million.

Google, eBay, Walmart, Cox Enterprises and Bank of America are all featured on the company website as recent customers. Bloom’s CEO and chief inventor K.R. Sridhar suggests his collection of 64 fuel cells stacked together in a refrigerator-sized box and fed by oxygen and fuel, should be ready to power every home (or at least a Starbucks) by 2020 for around $3,000 per box.

At the current unit price of $700,000 to $800,000, this is doubtful. In a recent article in the Christian Science Monitor, Greentech Media Editor Michael Kanellos warns about the perpetual issues surrounding the 24/7 functionality and costs to both mass produce and distribute fuel cells to residences.

Besides the question of whether fuel cells are even capable of delivering cost-effective emissions reductions for the average household, it is worth noting the very limited success the technology has received in the auto industry. Notwithstanding significant investments over time, automakers like GM, Honda and others have faced significant challenges bringing a viable product to the mass market. The technology has been plagued by safety and liability concerns, on-board fuel storage issues, geographical climate challenges, and a lack of infrastructure to support its use.

If we concentrate solely on infrastructure, here are some of the glaring issues the Bloom Box presents for homeowners in Hawaii:

• The Bloom Box is not clean energy – it requires fuel and fuel needs to be shipped to Hawaii. Solar requires the sun, which we have plenty of!
• Fuel cells emit carbon pollution. Solar, other than the materials it is made from, has no carbon pollution. No carbon footprint. 
• There is constant maintenance with a fuel cell and currently no provisions have been made to maintain this type of energy system. There is little to no maintenance with PV. 
• Along with that, there will have to be an established training method to educate consumers about the maintenance and support requirements for the new power system. To the contrary, there are myriad avenues online and in the community to learn more about solar.
• The current cost per watt for commercial applications of the Bloom Box is about $7.50 per watt in California, but it is only available in 100 kW increments and that doesn’t factor in the container shipping cost to bring it to Hawaii, nor are there any qualified installers or maintenance facilities. If you’re a Sunetric customer, we will help you with every facet of the process from selecting the right solar system to design and installation.
• Fuel cells are still under development, and you would be hard-pressed to find an in-depth description of how the Bloom Box works even on Bloom Energy’s own website. Solar is a proven technology.

Meanwhile, Americans throughout all 50 states are facing soaring energy costs. Hawaii pays the highest price by far. The cheapest electricity is the electricity that is free, clean and powered by nature. In the case of solar photovoltaics, most systems in Hawaii are tied to the grid which means unlimited storage capacity and the chance to create more free energy than you will ever need.

A recent National Renewable Energy Laboratory Report shows states' potential to fill the electricity needs for the entire U.S. many times over. Hawaii, according to the report, is capable of producing at least 159 percent of its own electricity needs using renewable energy sources only. These sources include onshore and offshore wind power, hydroelectric and geothermal power, and rooftop photovoltaics.

Read more.

The New Rules Project, a program of the Institute for Local Self-Reliance established in 1998 to promote sustainable communities, put together a state-by-state breakdown of renewable energy potential, which you can view here.