Solar Panels: Do They Make Sense In Connecticut?

Jan 20 - The Hartford Courant, Connecticut

Jeffrey Daniels and Kate Miller, a West Hartford couple who have been driving a hybrid Prius for six years now, always thought of themselves as energy conscious.

So when they downsized to a new house three years ago, it wasn't a stretch for them to consider rooftop panels that would use the sun to generate some of their electricity. The time was right, too: Daniels and Miller wanted to renovate a rear sun porch and add a second floor above it.

It wasn't enough to be environmentally conscious, though -- the cost, incentives and whether the location of the couple's home even made sense were part of the mix. They also knew the payback for the 3.3-kilowatt system -- averaging 302 kilowatt hours a month -- would be long, but they were pleasantly surprised by the reduction in their monthly electric bill. (An average house in Connecticut uses 700 kilowatt hours a month.)

"The cost of purchasing electricity is significantly lower," Daniels, a public policy consultant, said. "But if you think you're going to go down to zero, you are still connected to the grid, and there are transmission costs."

Experts say whether residential electric-generating solar, or photovoltaic panels, make sense depends on myriad considerations, from your home's location and the direction it faces to the age of your roof and tree cover in your yard. The systems can either be bought, the option chosen by Daniels and Miller, or leased.

"It's not like swapping out an oil burner," Bill Colonis, a project manager at the Connecticut's Clean Energy Finance and Investment Authority, said. "A lot goes into it. Shading and trees can reduce what is produced. It's not a black-and-white thing. It's very site specific."

The authority finances and invests in clean energy and energy efficiency initiatives, both residential and commercial. It was formerly known as the Connecticut Clean Energy Fund.

The popularity of residential solar-powered systems has been growing in Connecticut since the authority began tracking projects in 2004 that qualified for incentives. There was a spike in 2008 after a federal tax credit program became more generous.

Daniels said changes in the tax credit program was key in the couple's decision to go forward with solar panels. Prior to 2008, there was a 30 percent credit up to $2,000. After, it was 30 percent of the entire cost of the system, including installation, after any state rebates, Daniels said.

The authority will meet next month to review a new residential solar program, which is expected to include rebates. In the past, the rebate was based on the power that was anticipated to be produced, roughly $1.75 a watt up to 5 kilowatts. The new program, part of last year's energy bill, aims to develop 30 megawatts of residential installations within a decade. Unlike past programs, however, the rebates are expected to decline over time, putting pressure on the industry to continue bringing the price of systems and installation down.

Daniels and Miller's project cost $25,038, and after the state rebate and the federal tax credit, their share of the cost was $13,426.

The couple had the advantage of their renovation project that allowed their architect, familiar with rooftop, solar-panel installation, to design a roof that faced north-south, opposite the east-west orientation of the main part of the Colonial-style house near West Hartford Center.

If that change wasn't made, the panels would not have generated nearly as much electricity as they do, said Miller, executive director of The Fund for Greater Hartford, a private, independent foundation that provides grants in education, community development, health and other areas that benefit children, youth and families.

The roofline facing south also was designed at a 35-degree angle to capture the most amount of sunlight -- much sharper than a typical residential roof.

In the 19 months Daniels and Miller lived in the house prior to the installation of the solar panels, their electric bill averaged $104. Now, it averages $41 -- a difference of $63 a month, or $756 a year. That includes the electricity the couple sells back to Connecticut Light & Power Co. when it is producing more than it is using. (The couple's system does not include storage of electricity for use at a later date, so they, like hundreds of thousands of others, didn't have power during the Halloween snowstorm.)

Based on their monthly savings, Daniels and Miller would pay for their system in the 17th year. The panels have a 25-year warranty.

"The payback is very long," Miller said. "You do this because it is the right thing to do."

The cost of system and installation does not include maintenance, which, for the most part, is minimal. But there is one big-ticket item: the inverter, the mechanism that converts the power produced by the panels to a form usable by a household, typically needs to be replaced some time after the first 10 years, depending on usage. The inverter can cost $1,800 to $2,100 and as much as $3,000.

Connecticut now has more than 2,000 residential solar, electric-generating systems that have qualified for the state's rebate program, according to the Clean Energy Authority. Although monthly savings are attractive, those benefits could shrink, at least in the short-term.

The cost of natural gas, a major fuel used to generate electricity, has fallen in price due to new exploration. As a result, the cost of electricity is getting less expensive. CL&P was approved for a rate reduction for the cost of purchasing electricity for 2012, with the company citing lower natural gas prices. It is the third consecutive rate reduction for buying electricity.

"When the price of natural gas goes down, the price the solar panel also has to compete with goes down," Severin Borenstein, a professor at the Haas School of Business at the University of California at Berkeley and co-director of the U.C. Energy Institute, said. "And as natural gas replaces coal, it produces half as much greenhouse gas."

Companies that sell and install photovoltaic systems say they are watching the price of electricity and the direction of rates charged to consumers.

"We're paying attention, but we're not overly concerned," said Jim Oliva, regional sales manager at Colorado-based Real Goods Solar, whose East Coast headquarters is in Wilton. "There may be short periods where rates decline. But you're not just taking a 'today' approach here. Over the long haul, most people feel those costs will increase."

Indeed, that may be the case. Even if the cost of buying power goes down, the cost of maintaining the lines, poles and transmission stations that transmit is likely to go up -- a fact not lost on Daniels and Miller.

In December, CL&P said it wanted to spend $2.2 billion to upgrade its distribution system over 10 years so it will better withstand storms the likes of Irene and the Halloween snowstorm. After a decade the cost to customers would be an additional $13 a month.

While the Clean Energy Authority and Oliva said the payback can come in a shorter period -- say, seven to12 years -- they both say solar panels are just not going to work at every home.

"The site has to meet a certain level of performance or it won't qualify for a rebate," said Oliva, whose company is one of 77 state-approved contractors that call sell and install the photovoltaic systems.

Colonis said one of the biggest issues in Connecticut and elsewhere in New England is shade and tree cover.

Daniels and Miller said they had to trim their trees and ask a neighbor to cut some branches that hung over their property.

"Shading can change the economics and the performance of the system," Colonis said. "Some people take down trees and plant a couple in another area."

Follow Kenneth R. Gosselin on Twitter @kennethgosselin and on Facebook at Kenneth R. Gosselin -- Hartford Courant.

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