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OPB Business Partner
ENERGY TRUST OF OREGON
  1992- 2010 Tax-Credit Certified Solar Technician
The North American Board of Certified Energy Practitioners
SOLAR RATING AND CERTIFICATION CORPORATION

SOLAR ELECTRIC / PHOTOVOLTAICS
COSTS AND INCENTIVES


From our observations, Photovoltaic, grid-tied solar electric systems, generally range in cost between $3.00 for a very large residential system using average panels to $5.50 per watt for a small system using top of the line solar panels. The reason for the price difference is due to the complexity of the installation, the kind of solar electric equipment you choose and the fact that the bigger the system you buy the lower the cost per watt.

Our prices are higher than some and lower than others. However, what we feel we do better than all is our hands-on approach to each and every aspect to each and every install. Even before a job is started, we bring all potential projects, expert, personal and courteous customer service. This is something we will provide for you throughout your installation.

We pick up our phones. If we are going to be late or if there is some deviation from expectations, we are on the phone discussing it with you. We also like to think of our installations as pieces of art, masterfully installed. We care about the quality of the components used and the eye for detail installations should have.

Average Household Electric Consumption
When looking at prices, one of the first thing folks want to know is what kind of an impact certain size systems will have on their electric bill. The answer to this question is…it depends. The average household in Portland consumes between 10,000 and 13,000 kilowatt hours in a year. In Portland, the amount of watts a system is rated for coincidentally is also the amount of kilowatt hours your system will generate throughout the course of a year. For example, a 3,000 watt system will produce +/- 3,000 kilowatt hours a year. To learn more about these photovoltaic grid-tied systems, click here or go to our PV FAQ page.

How to Calculate How Many Kilowatts a Year You Consume 
To figure out how many kilowatt hours your house uses on a yearly basis, a simple mathematical equation is all it takes. Get out your electric bill and look at the graph. This graph shows you your daily kilowatt average for any given month. Simply add up the most current 12 month’s daily averages, divide by 12 and then multiply that number times 365. You now know how many kilowatt hours you consume in a year.

Site Specifications
There are a couple of site-specific technical specifications concerning your potential solar site you need to be aware of. One of the first things you want to think about when considering solar is how good of a solar site you have. The incentives that exist are really only meant to incent solar systems placed in the most optimal of locations. To qualify for all of the solar incentives, your house has to have a roof that has access to 75% or more of the yearly sun. This means you really can't have any shade falling on the roof where you want your solar system installed from 10 am to 4 pm. The roof does have that 25% leeway, but it gets used up pretty fast.

The other specification to be aware of is the life left remaining on your roof. The Energy Trust, especially, wants the roof your solar system goes on to have at least 10 years or more left remaining on it. If this is not something you can remember or verify and the roof life is a bit iffy, you should call a home inspector or a roofer to come on out and take a look at things. Make sure they leave you something in writing as proof you have 10 years or more left remaining on your roof.


Finally, don't feel you can't go solar just because you don't have a perfect solar site and are not eligible for all of the incentives. Every year Solar Energy Solutions installs systems that fall outside of the ideal scenario the incentives are set up to support.

Economic Reasons to GO Solar
Before we go any further, we should probably address the persistent issue of payback. Simply put, payback isn't the issue, because a simple arithmetic calculation of up-front costs versus reduced monthly expenses just doesn't capture the relevant factors. Just like a car, TV, cell phone, or whatever, the real payback is in having something that does something for you, not recouping the costs. To see a video on this click here.

However, unlike any of the aforementioned things, there are strong economic reasons to considering going solar. First there is a substantial “reduction in price incentive” from the Energy Trust of Oregon. Then there are both State and Federal income tax credits. The best part about these tax credits is that it is money that is no longer yours. You have paid it to the government already. However, with the tax credit programs the government pays you that money back as an incentive for you to “Go Solar”. Regardless of how much you like paying your taxes, you probably have a problem with how those tax dollars are being spent. With these two tax credit programs it is like a, “Self-Directed Tax”. You get to choose where your tax dollars go. In this case, they go on your roof saving you tons of energy and money. Finally, prices have fallen so much that installing a grid-tied photovoltaic system is now a great and sound way of investing money. Systems can yield a return on your solar investment of anything from 6% to 14%! Even in our cloudy climate these returns are all but guaranteed. And, solar systems increase your property value by the cost of the systems, yet because of the incentives, only cost you a fraction of that total. Furthermore, houses with solar systems on them sell quicker and for higher prices. Of course, our favorite incentive is saving the environment.

Solar Incentives

There are currently THREE incentives available meant to strongly encourage you to GO Solar. The first is a reduction in price incentive from the Energy Trust of Oregon. The second is an up to $6,000.00 state income tax credit that is absorbed over a 4 year period of time in $1,500.00 increments. The last is a 30% federal income tax credit.

The Energy Trust of Oregon is funded by money it receives through PGE, Pacific Power, and Northwest Natural Gas. There are also a number of smaller utilities that pay into the program. These utility companies take 3% of the money we pay them in our bills and redirect it to the Energy Trust. The Energy Trust then redistributes this money into renewable energy, and energy conservation programs. The way this pens out for solar is in a direct reduction in price incentive. The reduction in price incentive varies by the size (DC nameplate rating) of your solar system and utility area. It varies by utility company because a Monarch butterfly landed on a budding rose that was then plucked and placed on Jim Morrison's grave. In other words…we don't know. What we do know is the Energy Trust Reduction in Price incentive is GREAT! The greater in size and power rating of your grid-tied photovoltaic system, the greater the reduction in price incentive is from the Energy Trust of Oregon.

If you had Solar Energy Solutions install a 4.6 Kw system in PGE land and if it costs $17,500. You could qualify for a $1,840.00 reduction in price incentive from the Energy Trust of Oregon. This $1,840.00 comes right off the top of what you would otherwise pay Solar Energy Solutions. This means your out of pocket cost to Solar Energy Solutions, Inc. would be $15,660.00.

$17,500.00 Installed cost 
- $1,840.00 Minus Energy Trust incentive 
$15,660.00 Equals your out of pocket cost

Remember, the bigger the system the bigger Energy Trust incentive!

The Federal Government: There is a 30% federal income tax credit. Unlike any of the other incentives, there are no technical or solar site specifications on this incentive. No matter how big or small your system, how sunny or shady your site or how new or old your roof, you qualify for the federal income tax credit. However, it does assume you pay what is called a minimum federal tax. So, it would be wise to talk to your tax person first on this matter. But, assuming you qualify, it is a dollar for dollar tax credit, going against your federal income tax liability. The 30% federal tax credit is calculated after deducting the Energy Trust of Oregon reduction in price incentive from the installed cost.

The Oregon Department of Energy, the final incentive available, has, since 1986, been on the cutting edge of encouraging people to go solar by means of tax credits. Oregon's tax credit program for solar has always been an example to the rest of the nation of how states should encourage the use of solar energy. Like the incentive from the Energy Trust of Oregon, the state income tax credit is based on the size of a system. Different sized systems qualify for different tax credit incentives. Also, like the Energy Trust, the state is only looking to incent ideal solar scenarios. The maximum state income tax credit for a photovoltaic system is $6,000. If a system qualifies for the full $6,000 tax credit, it is absorbed over a four year period of time in $1,500 increments.

The Beauty of Tax Credits, is these incentives go against your Federal and State income tax liability. These tax credits are better than tax deductions. You get these tax credit incentives when you file your income taxes. Remember, this is a tax credit, not a tax deduction. For example, say you have paid the Federal government $7,000 in income taxes throughout the course of the year. Because of deductions and allowances, you get $500 back. Well, if you install the above 4.6kW system and have $15,660.00 out of pocket it would qualify for $4,698.00 worth of a refund on top of the $500.00 you are already getting back.

People are always complaining about how they never get anything for their tax dollar. Here is a way you can get your tax dollar right back into your pocket and install a solar system to boot. But remember, you have a tax liability at least as large as the tax credit in order to get the tax credit. If your income tax liability is low, the state gives you up to 5 years to absorb the full amount. It is always best to check with your tax person to confirm what you have paid in taxes and to make sure you will qualify.

I remember when I received a $1,500 tax credit when I installed my solar hot water system in 1992. It was an afternoon in May and I was doing some office work when I heard the mailman come to the door. On this particular day he only had one piece of mail and it was from the Oregon Department of Revenue. With one eye closed and the other half open, I opened the letter wondering what the bad news could be. But then, as I peeked inside, what should my wary eyes see? A check for $1,500 bucks. Yippee! I said as I ran through the offices yelling, "Isn't government GREAT?!" How often can a person yell that?!

Economic Summary of the Solar incentive programs
To summarize, if Solar Energy Solutions installs a 4.6kW photovoltaic system mentioned above for $17,500 it would qualify for the Energy Trust of Oregon reduction in price incentive of $1,840.00. It would qualify for a Federal Income tax credit of $4,698.00 and an Oregon state income tax credit of $6,000.00 (absorbed in $1,500 yearly increments). This means under this scenario, there would be a total of $12,538.00 worth of incentives. This would ultimately bring your total system cost down from $17,500.00 to $4,962.00. WOW!

$17,500.00 Installed cost
- $1,840.00 Minus the Energy Trust incentive
$15,660.00 Out of pocket cost
- $4,698.00 Federal income tax credit
- $6,000.00 State income tax credit up to $6,000
$4,962.00 Net cost!

This 4.6kW system would save you around $460.00 a year in electricity. $460.00 on $4,962.00 will yield a WHOPPING, risk free and tax free return on your investment of 9%! Better still, this return on investment will endlessly increase over the course of because energy prices tend to endlessly increase. This means what saves you $450.00 a year now will save you at least $900.00 a year on or before year 10 and yield a Risk Free, Tax Free ROI of 18%!

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