Tax credits fuel interest in solar power

Lafayette development embraces renewable energy
Associated Press
Friday, October 26, 2007

LAFAYETTE — Writer Daniel Glick was putting together a list of things people could do in their every day lives to fend off climate change, part of his contribution to an upcoming book, when it hit him: What was he going to do?

"It sounds corny, but the light bulb went on for me that I lived in this pretty progressive place," Glick said.

Economics motivated business consultant Jim Mason, and he reached the same conclusion as Glick: Solar power was the way to go.

Both say the extra push to go solar came from federal tax credits and rebates offered by Colorado's largest utility after voters mandated that more renewable power be sold in the state.
"We've got almost 90 kilowatts being generated by the sun largely because of these rebates," Glick said of the Nyland co-housing development he lives in east of Boulder. "It's government policy that actually works."
Mason installed a solar system on his Boulder home more than a year ago and said he's been generating more energy than he uses ever since. He got a small check at the end of the year for electricity he contributed to the grid.
"I can brag to my green neighbors in Boulder that I'm green, but it was dollars and cents," Mason said.

Renewable energy has gained more support in the West as Colorado and other states have directed utilities to get more of their electricity from such sources as the wind and sun. Colorado voters became the first in the nation to set a renewable energy standard when they approved a ballot measure in 2004 requiring the state's largest utilities to get 10 percent of their power from renewable energy by 2015.
A new Colorado law championed by Gov. Bill Ritter boosts the requirement to 20 percent by 2020. Of that, 4 percent must come from solar energy.
Solar power accounts for less than 1 percent of the electricity produced nationwide, but its share is rising.

"It is growing very significantly, 20 to 30 percent per year," said Gary Schmitz, a spokesman for the National Renewable Energy Laboratory in Golden.
More utilities are investing in solar because of mandates and customer interest, said Julia Hamm, executive director of the Washington-based Solar Power Electric Association, a nonprofit that works with electricity providers.
"Currently, there are about 2,500 megawatts of large-scale power plants under contract," Hamm said. "Almost on a weekly basis, we're seeing that number increase."
One megawatt serves roughly 1,000 homes.
Xcel Energy, Colorado's largest electricity provider, is building an 8-megawatt solar power plant in the San Luis Valley in the south-central part of the state. The utility also pays customers who install approved systems $4,500 per kilowatt.
Xcel Energy spokesman Mark Stutz said a typical residential system generates from two to three kilowatts.
The utility will also pay non-customers $2,500 per kilowatt because it counts toward the renewable energy target.
So far, Xcel Energy has paid $18.4 million in rebates and renewable energy credits to 1,100 applicants, up from $7.7 million at the end of last year.
"It's been a successful program," Stutz said. "We want to continue it."
Some rural electric cooperatives in Colorado offer incentives, too.
The rebates from Xcel Energy and the federal income tax credit — 30 percent of the cost, capped at $2,000 for homes — helped sell Glick and his neighbors in the Nyland co-housing development in the quickly growing suburb of Lafayette, just east of Boulder. Sixteen of the 42 homes already have solar panels on their roofs and installations are planned for 11 more.
Systems are also being installed on two of the development's common buildings. The homeowners' association is making loans to residents who can't afford the upfront costs.
"It's not pie in the sky. It's not 1973 anymore," Glick said. "It's on the roof and my meter's spinning backward."
The digital meter shows lines going in reverse when his 2.6-kilowatt system produces more electricity than he uses. Glick bought a new energy-efficient refrigerator and light bulbs to help reduce his demand.
He's also monitoring the progress of federal energy legislation that would provide more funding for developing renewable energy and extend the federal tax credits for solar. The credits will expire next year unless extended as proposed: eight more years for businesses and six for homes.
Credits and incentives "are hugely important" for the industry, said Stephen Kane of Boulder-based Namaste, an employee-owned solar electric company that is working with Glick and his neighbors.
Solar costs roughly double what coal does per kilowatt hour to produce, but that will change as solar technology continues to advance and conventional fuel costs continue to increase, Kane said. He dismisses complaints about subsidies for renewable energy.
"Fossil fuels have tax credits and incentives," Kane said. "Our subsidies are out in public and very well known to everybody."
Mason, the Boulder business consultant, studied the tax credits and rebates and decided it made economic sense to install a 10-kilowatt residential system.
What started as a roughly $75,000 system ended up costing about $29,000. Mason considers the money spent an investment akin to a municipal bond since he isn't paying electric bills. He said the system also greatly increases the value of his home.
"I thought getting free electricity and locking in a price now was probably a good idea," Mason said