Wednesday, November 17, 2010

Oregon Solar Power

For most of its recent history, Oregon has been a progressive state, embracing technology and political innovation. During the 1880’s, despite only recently becoming a U.S. state, Oregon rapidly expanded its railroad production eastward facilitating the rise of wheat and lumber industries, bringing huge amounts of capital westward. On the political front, in 1902, Oregon was the first state in the union to adopt an initiative and referendum process for citizens to directly introduce or approve proposed laws or amendments to the state constitution.
And today, Oregon retains its progressive spirit by supporting the legalization of cannabis as well as anti-urban sprawl and pro-environment laws. So it should be no surprise, that Oregon is at the forefront supporting renewable energy technology and, in particular, solar power.
Oregon Solar Power Market
One would thinking that Oregon, ranking only 27th in population in the U.S. and blessed (or cursed depending on your mood) with ample rainfall, would be a terrible place for solar power to take root…but you’d be wrong. The following three pictures show the amount of direct normal radiation from the sun for March, July and October, respectively, in the Northwest.
This is eight months out of the year where most of Oregon is receiving ample solar radiation to make solar power worthwhile. Oregon’s solar power success is also born out by the statistics as well.
Oregon ranks 9th in the country with 3.7 MW of cumulative installed solar capacity per person. Solar energy is also Oregon's most abundant energy resource and estimates have placed the state's potential electricity production from solar power at 68,000,000 MWhs annually, an amount larger than the state's total electricity consumption of 46,457,000 MWh in 2005. In addition, Oregon’s grid-connected photovoltaic capacity has grown exponentially from 2.8 MW in 2007 to 14 MW in 2009…that is an increase of 400% in two years. Many solar manufacturing companies have chosen to operate in Oregon because of its cheap hydroelectric power. In fact, Oregon was one of the only three states (along with Michigan and Ohio) to manufacture more than 100 MW of solar panels during 2009.
Oregon Renewable Energy Mandates
Oregon’s government made solar power adoption a priority throughout the state and they have implemented numerous mechanisms to make renewable energy and solar power a more commonplace reality. To start, in 2007, Oregon adopted a Renewable Energy Standard, requiring the largest utilities in Oregon to provide 25 percent of their retail sales of electricity from newer, clean, renewable sources of energy by 2025. Also in 2007, public entities such as state and local governments were required spend 1.5% of their construction budgets for new or renovated buildings on on-site solar technologies. And in 2009, Oregon enacted additional laws requiring 25 megawatts of new solar electric systems from homes and small-scale commercial systems within five years and also required the two largest electric utilities in Oregon to develop or purchase the equivalent of 20 megawatts of solar power annually within a decade.  
Oregon Solar Power Rebates and Incentives
Oregon also has a large number of rebates and tax incentives all geared towards promoting the adoption of residential and commercial power systems. The following is a brief discussion of the primary rebates and incentives in Oregon:
  • Residential Energy Tax Credit - Up to $6000 based at $3 per watt with a minimum solar power system size of 200 watts. $1,500 maximum can be claimed per year and the solar power system must be verified by a tax-credit certified technician.
  • Business Energy Tax Credit – 50% of the eligible project costs (up to $20 million) however the tax credit must be taken over 5 years at 10% of all eligible installation costs per year.
  • State Energy Loan Program – This program aims to encourage investment in energy efficiency and renewable energy production by offering long-term, fixed-rate loans to all types of organizations and individuals with a maximum cap at $20 million per loan….the rates and fees vary but they are typically very competitive.
  • Feed-in-Tariff – Recently, the Oregon Public Utility Commission approved trial feed-in tariff rules where residents and businesses who install solar systems can enter a 15-year contract with investor-owned utilities in Oregon where they will receive guaranteed payments over the life of the contract with rates ranging from $0.55 to $0.65 per kWh. Funding will come from an estimated one half of 1% increase in electricity rates. The trial program ends after four years and the entire project's size is limited to a maximum 25 MW.
  • Energy Trust of Oregon - Solar Electric Buy-Down Program provides a rebate to customers of Pacific Power (PP) and Portland General Electric (PGE). For residential solar power systems, the rebate is $1.50/watt for PP and $1.75/watt for PGE with a maximum incentive of $20,000 for each…for commercial solar power systems, the rebate is $0.50-$1.00/watt for PP with a $100,000 incentive and $0.75-$1.25/watt for PGE with a $500,000 maximum.
In addition, there are other rebates from local utilities and there are rebates and incentives if you are interested in solar thermal power. Many of the incentives discussed above can be used in conjunction with each other. However, please be sure to talk with a tax specialist or a Oregon solar installer before your begin your solar project as they can better explain all of the applicable rebates for your home solar system.
Please note that there many different ways to finance the purchase of a residential solar system so that you do not have to come up with a large cash outlay at one time yet ensure that you are still spending less than your current electric bill even with financing. Your solar installer should be able to help you with any additional financing mechanisms.
Net Metering and Tax Exemptions
On top of the state subsidies, Oregon has a net metering policy which means that you only pay for the net amount of electricity that you use. With net metering, homeowners with solar installed are able to “bank” the excess electricity their solar system generates and receive credit up to 100% of their electric use bill at the full retail electricity price that they can use later. In addition, Oregon’s government has even gone so far as to exempt the value of a renewable energy source from a property owner’s property taxes. Unlike other home improvements, you do not have to pay increased property taxes even though the value of your home will increase with a solar electric system. In addition, Oregon has exempted solar power systems from sales tax!
Prior to moving forward with a solar installation, it is always a good idea to seek professional advice. This is especially true in today’s climate, with many solar incentive programs struggling to keep up with demand. A licensed solar installer can help you figure out the cost of a system, financing options, and the incentive for which you qualify.
For those interested consumers – homeowners and commercial business owners – that are unsure about solar power and how they should go about evaluating whether solar is right for their situation, please know that there are answers to your problems and all you need to do is a little research at great sites like the U.S. Department of EnergySolar Energy Industries Association, and Solar Energy Installers (who can help you find a great solar installer in your area). Remember, solar power is potentially a large investment, so it’s advisable to look into both the technical and financial considerations before either getting the wrong solar panel system or dismissing the chance to save with solar.

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