Solar Power Pays Off for Businesses
$4,000 estimated monthly savings
(page 2 of 2)
Oahu Solar Systems Connected to the Grid
Photo: Courtesy of www.RevoluSun.com
End of 2009
End of 2010
Factors to Consider
Business owners interested in installing solar photovoltaic systems should ask themselves these questions:
How do I pay for it?
A solar PV system isn’t cheap, but the long-term savings are real. “People who were paying $5,000 a month are now paying $50 a month,” says Joseph Saturnia of Island Pacific Energy.
There are different ways to pay for a system. You can pay the entire cost upfront (from your savings or with a bank loan) and take all the tax benefits. You can also lease the equipment, where the lessor who buys the system will receive all the tax benefits, while you get a monthly payment lower than your current electricity bill. Or you can get a power purchase agreement (PPA), where a third party buys the system and sells you the energy.
Will I benefit from the tax credits?
If you own a small business that doesn’t pay a lot in taxes, the tax-credit option may not be the best deal. You might want to consider, instead, the Treasury Grant, which gives 30 percent of the cost of the system back to you in the form of a check. But the system has to be installed and running by the end of the year in order to qualify for this option. (The 30-percent federal tax credit doesn’t expire until 2016; the 35-percent state tax credit doesn’t have a sunset date.)
Do I have the space?
Solar PV systems have two components: solar panels and inverters. While finding space for the inverters isn’t the biggest challenge, finding enough roof space for the panels might be. Ideally, you want a large, flat roof that gets direct sunlight. Each kilowatt takes about 100 square feet of space, Saturnia says.
What if I don’t own the building?
If you don’t, your landlord has to make a decision about installing a solar PV system. If you’re in a long-term lease, you could get permission from your landlord to install a system. You would get your money back after the first three to four years and reap the savings thereafter. Or your landlord could provide the PPA to tenants and sell the energy back to HECO in a feed-in-tariff program.
Can the grid accommodate my system?
There’s a limit on the amount of PV-generating capacity that can be connected to any one of the more than 450 circuits on Oahu that make up HECO’s grid. When the amount of the PV on a circuit hits 15 percent of the total capacity, HECO usually requires the business (or homeowner) to conduct an interconnection study, which can cost $40,000 or more and take months to complete. It’s a cost that you likely will have to shoulder.
Nonetheless, on Oahu, only six out of 465 circuits are at or near the 15-percent limit, HECO says. And the solar industry is lobbying for a higher limit and more cost-sharing when a study is required.
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