COLUMBIA — Two years ago, Floyd Hansen saw the way electric prices were rising.
So he looked around for another way to power his Jefferson City home. He ended up installing a 9.87 kilowatt photovoltaic system on his roof that provides enough energy for 70 percent of his needs in the winter and all of his energy use in the summer.
Hansen paid roughly $60,000 for his system, but he has already recovered $40,000 in rebates and tax credits. He said he expects to recoup all of his costs within 10 years.
“With the way electric grids are going to be going up in the future, I figured it was either pay now or pay later,” he said.
Hansen is one of the growing number of people who have installed solar panels on their homes to generate electricity.
Annual global growth in solar energy capacity is 102 percent, according to the U.S. Energy Information Administration.
Solar has actually grown at a faster rate in the last five years than such renewables as geothermals and biomass, but that’s largely because it began at such a tiny base.
In 2000, solar provided zero percent of total electrical generating capacity in the U.S.; 10 years later, it had reached 0.2 percent, according to the 2010 Renewable Energy Data Book.
With more than 200 sunny days per year, according to the U.S. Department of Energy, Missouri has distinct solar potential.
“The popularity of solar energy has continued to grow,” for “huge economic reasons across the nation,” said Mike Odneal, vice president of Missouri Solar Applications, the Jefferson City company that installed Hansen’s system.
Odneal compared a solar panel system to buying electricity in bulk: “You’re essentially buying, up front, a system that can pay for the majority of your energy for the next 25 years.”
Thus, his company offers a 25 to 30 year warranty on each of its systems.
Much of the solar surge can be attributed to attractive rebates and other incentives that have lowered the cost of solar installation by 75 percent to 90 percent in the last few years.
The federal government offers a 30 percent tax credit to customers who install solar panels on their property, Odneal said. That incentive, however, is scheduled to be phased out beginning in 2016, reflecting antictipated growth in solar popularity.
Missouri is also phasing out similar incentives to solar investors. Gov. Jay Nixon signed a bill on July 3 that will slowly reduce the rebates that are available from investor-owned utilities for installing solar equipment. Between 2014 and 2020, the rebate of $2,000 per kilowatt for a new system will drop to $250 per kilowatt.
“The utilities wanted to phase-out the rebates for planning purposes and so they could see an end on the horizon,” Odneal said.
Now the utilities can see a structured ending and can better analyze their own costs,” he said. “It also helps ratepayers know what their costs will be.”
In addition to rebates and tax credits luring consumers, Odneal said the cost of solar panels has dropped dramatically in recent years.
For example, the average solar panel system costs about $50,000, but a customer today would only pay 30 percent of that cost after rebates from investor-owned utility companies and the federal tax credit are taken into consideration.
Public utilities throughout Missouri have been offering rebates since 2008 when a referendum known as Proposition C mandated a return of $2 per watt for new or expanded systems. The proposition also allowed homeowners to connect their system to existing power grids, according to Odneal.
Ben Schacter, a solar consultant at Missouri Solar Applications, said the law sunsetting state rebates does not apply to local municipal utilities.
Cities such as Columbia that have chosen, on their own, to offer incentives to homeowners in addition to Proposition C are still able to offer those rebates; however, they are often much smaller than investor-owned utilities.
Columbia offers $500 per kilowatt as compared to the $2,000 offered by investor-owned companies.
The new law only applies to Ameren and Kansas City Power and Light, Schachter said.
To see this article as it was originally published in the Urban Pioneer, click here.