Alternatives Make PV Affordable
The residents of the state of Hawaii are subject to the highest electric rates in the nation. Though, with solar, volcanic and wind energies on tap, the Hawaiian Islands are an ideal place for taking advantage of alternative energy sources. While giant wind farms and geothermal ventures are controversial issues, subject to passionate debate, solar systems are on their way to becoming the new standard. More and more businesses are using photovoltaic (PV) cells to power their workplaces, and many new homes are sold already equipped with the latest solar technology.
While the solar trend on the islands is taking hold, Hawaii is still the most petroleum-dependent state in the country. Part of the problem is that regardless of how efficient, financially sustainable or eco-friendly solar power may be, there is still an initial purchase and installment cost of somewhere between $10,000 to $40,000. Many are daunted by these estimates and feel they lack the necessary funding to install a PV system in their home. Luckily, there are numerous ways for the average homeowner to benefit from solar power.
There are many advantages to owning a PV system. For starters, the increased value of the home or building it powers. Studies show that for every $1 the system saves on electric bills per year, the value of the house goes up by about $20. For example, if someone saves $1,000 over the course of a year, his/her house could be worth an additional $20,000. This rule of thumb varies depending on the size of the system, and the home’s location and value.
Tax credits are another benefit. The government offers solar tax incentives on both electric and hot water systems to individuals and companies. For each system installed, the federal government offers a 30 percent tax credit and the state of Hawaii offers an additional 35 percent.
Hawaii is one of 11 states where electric companies offer feed-in tariffs to almost anyone generating excess renewable energy. Many PV systems produce more energy than the house or building associated with the system uses. When this happens, the extra energy goes into the power grid. A feed-in tariff consists of electric companies buying this extra energy at a cost-based price. This is a great way to not only encourage people to start more solar projects and produce more sustainable energy for the islands, but it is an easy way for residents and business owners to start making back their initial investment.
More often than not, people will need to borrow money for their solar endeavor. There are many Hawaiian financial institutions that offer “green energy” loans, which are often tax deductible and may have very low interest rates. In addition, borrowers can rest assured that not only will they be saving a vast amount of money every month on electric bills, but the U.S. Department of Energy states that the average solar system will pay for itself in five years.
There is also another option for people that don’t want, or don’t have the credit, to take out a standard loan. Many solar companies offer systems on something called a Power Purchase Agreement (PPA), which gives homeowners the option of housing a PV system on their property without having to purchase it. They sign a contract with the company that gives a predetermined kilowatt/hour price and duration of time the system will be in place. The resident then buys all the electricity it generates, which is why it is extremely important to get a system that does not produce more energy than is needed. PPAs are great because homeowners get the benefit of a significantly lower utility bill without having to be responsible for maintaining or servicing the system.
In addition, almost every solar company on Oahu leases PV systems. Although similar to a PPA, they are not the same. When a resident or company leases the PV system, they are not buying the electricity, rather, they are paying a set rate for the system and then getting the power for free. If the lessee uses more energy than the system provides, he/she pays the difference. The solar company still owns the system and is responsible for its upkeep. This is a good option for people that aren’t able to or don’t want to invest the money and have the responsibility that comes with owning a system.
Solar energy is a fiscal, economic and environmentally sustainable solution to our islands’ expensive and extreme dependence on imported petroleum. Though it may seem too costly or overwhelming, it doesn’t have to be. With roughly 40 solar companies on the islands, most of which have ties to financial institutions, there are systems and payment options for almost any home or business owner. Both the federal and Hawaiian state governments are helping to make PV systems easily accessible to the general public through tax incentives and feed-in tariffs. By taking advantage of Hawaii’s brightest and most renewable resource, homeowners can stop paying for the most expensive electricity in the country while helping their wallet, the planet and the aina.
Blake Lefkoe is a frequent contributor to Natural Awakenings Hawaii and runs Aloha Editing from her home on the North Shore. Contact her at Aloha.Editing@yahoo.com.Edit ModuleShow Tags