Here Comes the Sun

The first time I saw an electric meter run backward was in the late 1970s in a loft in New York City’s Chinatown. It was, how you say, highly illegal. The creative tenant who rented the loft was simply sucking off Con Edison’s electric supply to the building in a way that actually looked like he was providing energy, rather than consuming it.

The second time I witnessed this phenomenon was many years ago in a specially designed “green” house in the boonies of Rhode Island that relied upon solar power for its energy supply. The electricity being generated by the solar panels was exceeding the home’s usage, for a net-metered result of less than zero. But back then, it appeared to be as practical for everyday environment-friendly use as putting a compost pile in your bedroom.

Things change. The bottom line today is that through a series of varied state and federal programs aimed at encouraging the use of solar energy at residences and small businesses in the state, an early investment can end up paying off over the long term after four to five years, yielding accrued dividends for as long as 25 years after the initial commitment.

Eric Beecher, president of Sol Power, one of a handful of state certified and licensed solar energy installers in Rhode Island says, “In my opinion, (solar power) is the best investment a homeowner can make. You’ll get a 12% to 14% return over time for 25 years. And it’s basically a no-risk investment.”

This kind of a deal is more easily swallowed when you look at the various financial options being offered up to help a resident or business that wants to take the step of making the initial investment that averages in the $20,000 range, but is obviously variable upon the size of the system of solar panels and other devices deployed. But when you have some skin in the game financially, this can help prompt some immediate concern and actions about one becoming more energy efficient right at home. In the area of hidden benefits for commercial properties, in the long run it provides a competitive advantage against those not taking the same steps you are to benefit from the potential reduction in operating costs.

It gets detailed here, but hang in there, you’re the one who can make out on this scheme.

If you want to install solar panels that depend upon the sun to power your household or business needs, and do it through the proper channels, you are immediately looking at a 30%  federal tax credit.

Then, at the state level, you have a couple of options. As Chris Kearns, the Chief of Program Development at the state’s Office of Energy Resources, explained, you can apply for an up-front grant loan from the state’s Renewable Energy Fund administered by RI Commerce, relevant to the size of the system you want to install. Kearns uses the analogy of it being “like buying a new car.” If you pay off the loan in a few years, you still will be able to get a few more reliable years out of the vehicle sans the loan payments. “The sweet spot for the Rhode Island system is five to eight years, but the shelf life of the solar system is 25 to 30 years,” said Kearns. “That is 10 to 15 years of no, or reduced, electric costs.” (Quick note: Should you sell your house at some point, there are ways available to have any unpaid loan balance easily transferred to the new owner.)

The other option is the Renewable Energy Growth net metering system, wherein you tie directly into National Grid. National Grid then counts the energy generated against your usage, resulting in significantly lowered costs. Or, harking back to that glass-encased electric meter spinning backward, in a best case scenario, plus-savings that can be reimbursed through a billing credit from National Grid or cash back if your self-generation exceeds your usage.

The state’s political buy-in to encouraging renewable energy and giving residents and commercial businesses a hand in achieving energy reduction has been laudable to date, driven not only through legislation past and pending, but with the support of the Raimondo administration and General Treasurer Seth Magaziner’s office, and the newly created Rhode Island Infrastructure Bank inspired by both.

Legislation extending existing programs was passed in the General Assembly last year, and Governor Gina Raimondo’s proposed budget presented last month included an article that would push out the current expiration date of the Renewable Energy Fund five more years past the current cutoff date of December 2017. It is hard to imagine, based upon the strides Rhode Island has made in recent years on renewable energy issues that have drawn national attention, that the trend toward positive policies on solar energy will not continue to move in the right direction.

The economic impact of increased use of solar energy has not been limited to benefiting individual residents and businesses. Through OER’s Solarize RI program, municipalities are being encouraged to take part to not only help energy efficiency in their town or city, but to increase the benefits of buying solar apparatus in bulk. To date, a number of communities have taken part, ranging from Foster to South Kingstown, and the three Aquidneck Island communities, among others. Solarize RI is seeking out more communities to participate, with a new RFP becoming available this spring for those who want to get on board.

Community involvement will have an added benefit through a new option, the Property Accessed Clean Energy (PACE) assessment program that is a loan repaid through a special assessment on your property tax for the use of solar power, where there will be a need for city and town councils to approve items that will be reflected in their overall community budgets.

And in the bigger economic picture, the solar industry is showing positive ripple-out results.  Last year, the number of state-licensed installers was three, and has risen, in a growing field of endeavor, to six. Twenty-five to 30 solar energy system contractors are now listed on the OER website. And OER’s Kearns points out, over the past three years, the RI Commerce-run Renewable Energy Fund has approved $9 million in loans to projects, which has leveraged $21 million in private capital. A rising tide…

For more detailed information about solar energy (or any energy issue at all involving Rhode Island state government) go to the Office of Energy Resources home site at: http://www.energy.ri.gov/. If it is solar-related, hit the “Renewable Energy” link within that site. You got the power, now find a good way to use it.

Chip Young is president of CY Communications, a p.r. consulting firm, and president of the board of directors of ecoRI News.