Bright Spot On Horizon: Rise of solar power is inevitable
HANCOCK — Improvements in technology and decreases in cost have been driving an increase in solar usage.
Depending on the size of the house, residential installations can range from $5,000 to $30,000, said Drew Cramer of Solar Up, a solar installation company based in Hancock. Costs have dropped by about 50 percent over the past five years, he said. How much it costs varies by location.
“If you have a lot of shading, you need more solar panels to get the same amount of electricity,” he said. “If you have a good roof, then you don’t have to bother pouring concrete and putting poles in the ground. It’s very, very site-specific for the cost of what it takes to offset your electricity usage.”
Solar Up is also offering free energy audits in partnership with Efficiency United. Andy Roth of Solar Up assesses a building to figure out where people are losing energy. That data is then fed into a program from the Department of Energy, which determines areas to address to estimates the return in investment.
“It’s the best step to take before you do solar to ensure your home is operating as efficiently as possible rather than bulking up on more solar,” Roth said.
The most common area of improvement is in attics, which should be — but often aren’t — well-insulated. Many older attics have an R-value, or resistance to heat flow, around R-10, Roth said. Efficiency United is offering a $300 rebate on insulation to bring it up to R-49.
So far, the company has done seven solar installations. There was a lull last year, Cramer said, which he attributed to uncertainty as energy legislation was proceeding through the state Legislature.
Customers are able to sell excess energy back to utility companies through the net metering program. A law passed at the end of 2016 allowed utility companies to pay back customers at the locational marginal rate, which resulted in lower sale prices and extended payback times for many customers.
“Even though the bills weren’t favorable for residential solar in our area, knowing that you’re in a bad situation and not knowing how bad the situation can be are two different things,” Cramer said. “People nowadays are still going for solar, even though it’s not available for UPPCO residential customers right now. So our work this summer has been with Ontonagon REA, which is still allowing net metering.”
In 2016, Upper Peninsula Power Co. became the first power company in the state to hit its residential quota for net metering, which is set at 0.5 percent of the company’s peak load during the previous year. It reached this year’s quota in July.
“They are required to give out net metering applications to that point, and they could exceed it if they chose to, but there is no mandate requiring them to go beyond that,” he said.
This region hit the cap for a couple of reasons, Cramer said. With electric rates higher here, solar became cost-effective quicker. And with only 20,000 customers, it takes many fewer solar customers to reach the rate.
How quickly solar grows will depend in part on how quickly battery technology grows, and if electric rates continue their growth pattern — 7 percent a year over the past 25 years, Cramer said.
“Eventually, it’ll just be cheaper to be your own microgrid,” he said. “We’re already there for seasonal residents, most likely. There are still the technical aspects of what to do with a battery bank in the winter, but the costs are dropping dramatically.”
If battery prices continue to drop, Cramer said, residential usage could be widespread within five years. LG offers a lithium-ion battery pack with 9.4 kilowatts of energy for $8,000.
Panels have also gotten progressively cheaper, costing 100 times more in the 1970s than now, Cramer said.
“Solar panel prices dropped dramatically in the 2.5 years we’ve been doing this,” he said. “The trend will continue. It’s becoming more and more affordable. It will be next year, even more the year following.”
Even with dropping prices, upfront investment costs can deter many people. Cramer said there is potential for greater solar usage through smaller plug-and-play panels that could be plugged into outlets. The national electric code does not permit them currently, he said.
Financing options have also helped solar grow in other parts of the country. Fannie Mae launched a mortgage program for solar installation last year. There is also property-assessed clean energy financing, in which the loan is tied to the property rather than the individual.
There are also power purchase agreements, in which the installer leases the solar panel to a customer.
“You have to be a pretty large organization to be able to stomach that investment yourself, too, putting in hundreds of thousands of dollars of installs and hoping they pay for themselves, but then the big corporations also get the tax breaks,” Cramer said.