Monday, December 13, 2010

Rooftop Solar Panels Save Winery $25,000 a Year

More companies — especially wineries — and other organizations are putting up rooftop panels to save cash, but the price tag is still too high for some in a struggling economy

For Jim Judd, installing rooftop solar panels at his San Miguel winery, J and J Cellars, was strictly a matter of mathematics. He had 144 panels installed on the roof of the barrel storage room Aug. 1. They will provide enough energy for both the tasting room and the production of the wine and save him an estimated $25,000 a year on electricity costs.

“Longterm, it’s the kind of decision you have to make,” he said. “It’s done everything I hoped it would.”

While San Luis Obispo County residents are busy debating whether two large-scale photovoltaic plants should be built on the Carrizo Plain, another much quieter but no less important solar boom is taking place in the county — rooftop solar.

While total numbers are still relatively small, record numbers of homeowners and businesses are installing photovoltaic panels on their roofs in an effort to dramatically reduce electric bills and do their part to minimize the effects of global climate change.

“People are starting to be more aware of their impact on the Earth and are trying to lessen it,” said Mike Emrich, president of Atascadero-based Solarponics, one of about six businesses in the county that sells solar panels.

Rooftop solar installation in California is brisk, but in Europe, it’s been downright explosive. What’s the difference? Feed-in tariffs.

Feed-in tariffs are rates that a utility such as PG and E would have to pay a customer for the excess power the customer produces with a rooftop solar installation. Such tariffs can be a powerful incentive to go solar because they turn solar panels into moneymakers, rather than just something that reduces a power bill.

California is set to unveil its first feed-in tariffs after the first of the year to replace its incentive program that is being phased out. Currently, PG and E takes excess power a customer produces and credits it to the customer’s account in a program called net metering.
The estimated cost, over 10 years, of some of the new provisions added to the tax deal taking shape in Washington:

- Tax credit for oil refiners who blend ethanol with gasoline, tariff on imported ethanol, other ethanol tax credits, $4.8 billion

- Grants to reimburse developers of renewable energy, such as wind and solar, $3 billion

Cities and the county should do more to promote solar power and make buildings energy-efficient, which would reduce energy costs and create jobs, the county’s civil grand jury has concluded.

A report by the grand jury urges local governments in the county to invest in solar power — rooftop panels in particular — and energy efficiency.

“To make these gains locally will take a lot more than talk, however,” the report concluded. “Bold leadership is a must.”

When Phil Koziel was placing the order for his solar system, he had an advantage that some others don’t.

As a bank manager, Phil is a detail-oriented numbers guy. Those qualities came in handy as he navigated the complex and ever-changing details of lining up the state and federal rebates that paid for 38 percent of his system.

The federal rebate is straightforward and comes in the form of a 30 percent income tax credit. The state rebate is complicated and comes in the form of a declining-scale payment program, which is funded by ratepayers of the state’s investor-owned utilities, such as PG and E.

Although the biggest growth in rooftop solar is in the residential market, an increasing number of businesses, schools, churches and nonprofits are installing solar panels. Forty-two nonresidential solar systems have been installed in the county since 2007.

Their reasons are the same as homeowners’ — saving on energy costs and reducing their impact on the environment.

Wineries, in particular, are turning to solar power, even though the economy is struggling, said Kristian Emrich, vice president of Solarponics, the Atascadero company that installed Judd’s system.

“They (wineries) have been one of the hardest-hit industries in this economy, but we have seen a resurgence within the last six months of wineries going solar,” he said.

There are several reasons for this, Solarponics President Mike Emrich said. The main one is that wineries are investing heavily in a green image.

While wine grapes are the biggest component of the county’s agriculture and a popular tourism draw, they also have their environmental costs. These include using scarce ground water for irrigation and displacing wildlife habitat.

“They are trying to be as sustainable and conservation-minded as possible,” said Mike Emrich, Kristian’s father.

Wineries also rely heavily on electrical equipment, particularly during the fall harvest, so the savings a solar panel system can bring are significant.

Wineries have an advantage. Their large, low buildings often sit exposed to the sun in the middle of vineyards.

Judd used a little foresight and constructed his winery buildings so that their roofs face the sun. He’s now ready to install 20 to 50 percent more panels.

The solar incentives for businesses are similar to those available to homeowners — an upfront state rebate coupled with federal tax credits.

Businesses have an additional incentive option of accelerated depreciation.

Tax laws often allow a credit or deduction based on the expectation that an asset declines in value over time. But typically, that tax break has to be spread out over the course of a few years.

Accelerated depreciation allows businesses to get the tax benefit on solar panels upfront and helps cover the cost of the investment, Emrich said.

And it’s not just businesses. The San Luis Coastal Unified School District has announced plans to install carport-like structures with solar panels on top of them at campuses.

The district estimates it could save from $6 million to $8 million in energy costs over the next 20 years. Some trees in parking lots would have to be removed.

But businesses also face obstacles to going solar. Credit is hard to get, and the 30 percent federal tax credit is of little use to a business that is making little or no money because of the recession.

“A lot of businesses don’t have the revenue to pay for solar,” Mike Emrich said.

And again, there’s the expense. Tolosa Winery recently installed ground-mounted solar panels at its San Luis Obispo and San Miguel vineyards, costing $3 million and $6 million, respectively.

The winery expects to take six and a half years to pay for that investment using accelerated depreciation and electrical savings.

“It makes sense to use the clean, renewable resource of the sun to power our business,” said Bob Schiebelhut, Tolosa Winery co-owner.

Another factor that businesses take into consideration when installing solar is selecting a vendor. Judd liked Solarponics’ reputation.

The company has been in business since 1975 and is the longest continually owned and operated solar company in the state. During that time, Judd has seen many ups and downs in renewable energy.

“Thirty-five years later, solar is still a fringe business,” he said.


1 comment:

Vida Health Communications said...

Glaring omission on how much was invested to get a "savings" of $25,000 per year. I'm an advocate of solar but even with net metering and tax rebates the payback is still measured in decades. When the payback falls below seven years then you will see solar explode.