With aid, more roofs could catch rays

By Phoebe Sweet

Sunday, Feb. 24, 2008 | 2 a.m.

While the Las Vegas Valley’s two large new solar power plants are celebrated as an ideal solution to the nation’s energy needs, the future of solar in Nevada also lies in tapping the sun on a smaller scale — provided the government and the energy industry cooperate.

Nevada is a prime locale for installing solar collectors on homes and at businesses. But at the moment, here and nationwide, the technology is expensive and the regulatory hurdles are daunting, industry experts — and a man in position to spur changes — said at the Renewable Energy World Conference in Las Vegas this week.

In his keynote speech Tuesday, Senate Majority Leader Harry Reid told thousands of industry professionals that it should be easier for consumers to install solar panels on their homes and sell extra power to utilities.

“Every consumer who wants to reduce their power bills by generating renewable power at home or at their business should have that option,” Reid said Tuesday. “Electricity providers should give every homeowner the option of installing a net meter at a fair and reasonable price. And there should be national, uniform interconnection standards for homeowners and businesses with renewable energy generation.”

With net metering, consumers who have solar systems garner credits for the electricity they produce. Those credits are then put toward those consumers’ bills.

Wednesday’s sessions at the conference included a panel of experts, including National Renewable Energy Laboratory energy analyst Robert Margolis, discussing the technological barriers to hundreds of thousands of homes and businesses installing solar collectors and tapping into utility grids.

Margolis said the technical challenges are surmountable. The greater challenge is in changing the way utilities think about managing demand for power, he said.

According to Jovan Bebic, an electrical engineer with General Electric, utilities meet growth in demand for electricity by relying on traditional nuclear and fossil fuel plants as first sources, and eventually filling in the rest with renewables. If use of solar panels on homes and businesses across the country skyrockets in the next decade, as many industry professionals say it will, utilities will have to learn to use renewables first by analyzing how their production varies based on weather and building backup generation for times when they can’t meet peak demand.

“If you put large quantities of solar on the distribution system, you may need to change the way you operate a little bit,” Margolis agreed. “It’s about managing your supply and demand.”

Another challenge to America’s burgeoning solar industry is cost. Other countries have brought down the cost to consumers using subsidies.

Some European countries such as Germany, which produces 15 percent of its power from renewable sources, require utilities to buy solar energy, whether or not it is produced by power users, for a fixed rate over 20 years. That makes homes or businesses with solar installations like mini power plants, according to Jeffrey Michel, an energy analyst who lives in Germany.

In the U.S., utilities typically use net metering for their solar arrays. But with net metering it is not possible to make a profit by selling energy back to the grid, which means U.S. solar installations are generally smaller in size and produce less electricity than their European counterparts.

In the United States there are federal incentives to install solar power. Margolis said a 30 percent residential tax credit capped at $2,000 covers only about 10 percent of the cost of an average installation. Tax breaks cover 30 percent of commercial systems and are not capped.

For businesses, “that brings it down to being competitive with grid electricity, depending on what part of the country you’re in,” Margolis said.

Varying state regulations also hold back the industry, experts say.

California, for example, charges more for electricity during afternoon peak times, when solar production is at its highest, which makes solar more competitive with grid electricity there. Nevada charges a flat rate, which green living consultant Steve Rypka says masks the true price of energy produced at peak hours.

In Nevada, incentives include a $3 per watt rebate for small businesses and homes. Systems cost about $10 per watt, or $30,000 for a typical system, according to Greg Karn, director of energy efficiency and customer strategy for Nevada Power Co. That rate will go down to $2.50 on July 1, when new regulations expanding the company’s Solar Generations program take effect.

Beginning July 1, the company will be allowed to accept 1 megawatt — or enough power to supply about 750 average single family homes — from solar installations on homes and small businesses each year through the program. It can accept 2 megawatts of power installed at schools and 760 kilowatts on public buildings. Schools and public buildings get a $5 per watt rebate from the company.

The program is funded by customer rates, and the company will soon roll out similar wind and hydro power programs.

About 270 homes in Northern and Southern Nevada have installed solar as part of the Solar Generations program, Karn said, and they generate about 1.5 megawatts of power. About half of those installations are in the Sierra Pacific Power service area and the other half are in Nevada Power service area.

Karn said when the program began five years ago there were more contractors installing photovoltaic panels in Northern Nevada than in the Las Vegas Valley, which is why the program was initially larger there and still makes up such a large share of its net metering customers.

“Back then if you opened the phone book (in Las Vegas) there were about two names, and when you called them they didn’t exist,” Karn said.

Karn said Nevada Power and Sierra Pacific Power companies serve about 350 net metering customers, 270 of whom received rebates through the program.

According to the Solar Energy Industries Association, about a quarter-million homes in the U.S. have some kind of solar installations, although many of those are less expensive solar water heaters. At the end of 2007 there were about 750 megawatts of PV power installed in America.

Mike Taylor, director of research for the Solar Electric Power Association, said $2 of the average $8 cost per watt of installing solar panels go to administrative costs, such as applications and forms. He said streamlining this process would probably trim more from the cost of installation of residential solar systems than technology advances could.

Rypka, who has a solar PV array on his Sun City Anthem home, said that Nevada Power’s program is very customer friendly but fills up almost immediately.

Although Rypka praised the laws here, he said the results of Germany’s feed-in tariff speak for themselves. Germany has more than 3,000 megawatts, or 55 percent of the world’s installed photovoltaic capacity and three times the amount installed in the U.S.