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Highlands Today

Incentives Rising For Home Solar Power

Jim Konkoly, Highlands Today

Ray and Louise Dorn report that the solar panels on their roof supply enough energy to drop their electric bill to zero. State and federal financial incentives cut the installation cost in half and will get better next year.

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By JIM KONKOLY

Highlands Today

Published: December 1, 2008

SEBRING - Ray and Louise Dorn said they enjoy opening their monthly electric bill.

That's because in June they converted their home on Granada Road in Sun 'n Lake of Sebring to solar power.

Ray said the photovoltaic panels on their roof converted enough sunlight into electricity that their latest Progress Energy bill left the power company owing them about 25 cents. They generate electricity during daylight, buy from Progress at night, and they report they are coming out ahead.

In effect, Louise said, they are now net producers of electric power, with Progress Energy buying all the power they generate but don't use.

More importantly, Louise said, the computerized unit that converts the DC current produced on their roof into AC current to power their home shows that in just five months they've stopped 5,328 pounds of carbon from being burned to produce electrical power.

"That's two and a half tons of carbon that didn't end up as carbon dioxide in the air, just from our system," she said.

Louise said they invested in the solar power conversion primarily to stop their contribution to global warming, which she and her husband see as a deadly threat to the world, especially for their children and generations beyond.

And, she said, they want people to know that converting to solar power is becoming a better investment.

"The opportunity is out there, and I think a lot of people just don't know," she said.

The Dorns were the first customer for a solar energy home conversion by One Solar (onesolar.com), of Sebring, a new company formed by co-owners David Jensen and Barry McBroom, who are continuing as home builders with their company, MJA Development LLC.

Jensen said they have just launched their solar power enterprise and see more solar-energy home conversions due to the financial incentives offered now from the state and federal governments, which will grow considerably bigger in 2009.

Full price for the Dorns' solar power conversion would have been just over $40,000. But, Ray said, the cost was cut by $22,000 because a Florida Energy Office rebate covers half the cost, up to $20,000, and they gained another $2,000 from a federal tax credit.

The federal tax break goes up to a maximum of at least $12,000 in 2009, Jensen said, meaning total savings in the neighborhood of $32,000 in the new year.

Louise said she conservatively estimates saving $120 per month off the electrical bill and, when figured against the initial cost, that produces a 7 percent return on investment.

When Progress Energy implements its 25 percent rate hike in January, she said, the return on investment will rise to about 9 percent.

The initial investment is beyond many homeowners, Ray said, "but there are a lot of people out there who can do what we've done." If, as he hopes, the number of solar powered homes grows, he said, the carbon savings will make a significant difference.

Jensen doesn't predict a massive rush to home solar power conversions immediately, but he said there's never been a better time to make the investment.

The federal government's recent $700 billion financial crisis bailout contains a provision that eliminated the cap of $2,000 on the federal tax credit for 30 percent of the cost of a solar home conversion, effective Jan. 1, he said.

With the typical cost between $40,000 to $44,000 to convert a home to solar power, eliminating the cap raises the maximum tax credit from $2,000 to at least $12,000, he said. No matter what a homeowner's federal tax bill, he said, the total $12,000 tax credit can be taken over as many years as necessary, until the full benefit is realized.

"If you figure that the state is covering half the cost and the federal government is covering 30 percent, that does make it economically feasible," Jensen said about the government incentives.

Solar power can also replace power company electricity for a home water heater, and Jensen said government financial incentives cut the typical price for a solar thermal unit down from about $4,500 to $2,200.

The state pays a $500 rebate for a solar thermal unit and Progress Energy pays another $450 rebate, he said. With no more cap on the federal tax credit for this alternative energy device, homeowners will also get a federal tax rebate of about $1,350, for a total cost reduction of $2,300.

Beyond Progress Energy's 25 percent rate hike in January, for 2009, Jensen said, consumers can expect to see annual rate hikes, which will raise incentives for essentially free energy from solar after the initial investment.

"With the incoming administration and their emphasis on reducing greenhouse gasses, I believe they will be introducing additional taxation against the utilities that is going to raise the electric rates across the board," he said.

"Obviously," he added, "it's not going to be 25 percent every year, but we can certainly expect that annual rate increases are going to be the norm."

Asked how he sees the market for solar home conversions, Jensen said, "My crystal ball is not that clear. But I believe there will be opportunity here.

"When you look at the fact that you have an unprecedented rebate where the state will cover about half your costs, and you combine that with the federal tax credit going to 30 percent, and the reality of electric rates going up 25 percent, the economic justifications are there now," he added.

"And people looking for a safe, long-term investment will find it very appealing."

The state rebate runs through mid 2010.

"We can't assume they are going to be as generous after that as they are now," Jensen said. "So in my opinion, if somebody is looking to invest in solar, the time has never been better."

As for the Dorns, they're already planning their next alternative energy step, buying an all-electric car, which they'll fuel off the sunlight hitting their roof.

Jim Konkoly can be reached at 863-386-5855 or e-mail jkonkoly@highlanstoday.com

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