Solar Juice!
A Mililani homeowner taps into free electricity.

Mike Morton
    
March 5, 2003

Conversations with my well-meaning environmentalist friends go something like this:
     WMEF: Look at those solar electric panels! You’re such an environmentalist!
     Me: So you agree with Dick Cheney?
     WMEF: No way! What are you talking about?
     Me: Like Cheney, you think we’re “exhibiting personal virtue.” You think we’re sacrificing our lifestyle or paying extra money to help the environment.
     WMEF: Well, aren’t you?
     Me: Screw “personal virtue.” We’re making money, no sacrifice involved.
     WMEF: Well, whatever. You’re such an environmentalist!
     Me: [Rolls eyes. Tries to breathe calmly.]

     Most people see solar electric panels as an expensive and altruistic environmental statement. But they’re wrong. These days, state tax credits and lower prices have combined to make photovoltaic panels an investment that might pay off faster than most of our 401(k) accounts.
     When did I become such a capitalist? Maybe after I first encountered Hawai‘i’s electric bills in the late 1980s. Even though the rates were half of today’s, they were still a shock after the Mainland, so I explored ways to reduce my bill. I experimented with compact fluorescent bulbs. Despite all that personal virtue (those early bulbs were expensive, bulky and noisy), our electric bills didn’t drop much.
     Seven years ago, when my wife and I moved into a house in Mililani twice the size of our condo, we worried about our energy costs doubling. So we bought a state-of-the-art, energy-saving fridge and washer, whose savings more than offset the increased electricity costs of the larger space.
     Since we owned our roof, we put up a solar hot-water system. Now our bills were about one-third less than in condo days. The bills dropped even more when we got some modern, quiet fluorescent bulbs, and when we ditched the desktop computer for a laptop.
     I was on a roll; my wife and I had cut our usage in half in four years without changing our lifestyle. How else could we save? I started looking into solar electric panels. Unlike our early investments in efficiency, this still-emerging technology seemed like an expensive and altruistic environmental statement. I worried about whether we’d have to rewire the house, buy appliances that run on DC, fill the garage with batteries or go without power on cloudy days.
     I had a lot to learn.
     We didn’t have to do any of those things, and today — 16 months after we put in our first solar electric panels — the major difference in our lives is a lower electric bill.

Starting out
     I figured we’d buy the whole system at once, cut loose from HECO and demonstrate our energy independence. Suburban survivalists. But two things happened, and then my capitalist leanings got the better of me.
     First, a solar contractor suggested we install our system over several years. Hawai‘i’s 35 percent tax credit applies only to the first $5,000 you pay in each year. By spreading the installation over several years, we’d get a credit every year. In our case, the tax credits will total nearly $5,000, reducing our net outlay to $14,000. (These tax credits are due to expire this June, so you might want to get that first chunk installed soon, then make sure the credits get renewed.)
     Second, in 2001, the state Legislature approved “net-metering,” which lets you sell excess electricity that you’ve generated by solar or other renewable means back to the utility. This is a great deal: A “grid-tied” solar electric system is a cost-effective compromise between total dependence on Hawaiian Electric Co. (HECO) and an expensive “off the grid” system.
     The survivalist angle didn’t look so good, but the capitalist angle was looking better and better.
     We could build our system over several years, saving tax money. This grid-tied system is even cheaper because you don’t need batteries. HECO supplies your electricity during the dark hours. (I now think of HECO as a really big battery — we pump our excess power into it on sunny days, then get as much as we need back whenever we need it.)

Is HECO hugging trees?
     Some local utilities actually asked the Legislature to pass the net-metering law. Does this mean they’re a bunch of tree-huggers who want to make it easy for homeowners to save the planet? Not necessarily. The utilities are happy to get some extra power on sunny days, when air conditioning most strains their capacity.
     The utilities don’t have to buy an unlimited amount of power. Hawai‘i law allows that utilities don’t have to accept net-metering agreements beyond half a percent of their generating capacity. If two or three thousand O‘ahu homeowners put up systems, the output would hit the limit. HECO said they may accept more net-metering agreements past that limit; however, nothing requires them to. (If utilities limit net-metering, that doesn’t prevent homeowners from installing systems, but it does remove a big part of the incentive to do so.)
     Another restriction on net-metering is that, unlike in many other states, if you push more juice into the grid than you take out of it, HECO won’t send you a check, and you can’t reduce your bill below the minimum monthly charge ($16 on O‘ahu, higher on Maui and the Big Island. Kaua‘i’s minimum charge is $12.16).

Is the Legislature hugging trees?
     Meanwhile, the state is doing even more to subsidize solar than the utilities are — that 35-percent tax credit on both solar hot-water and solar electric systems adds up. Is this state-sponsored environmentalism? Not exactly. Honolulu-based economic consultant Tom Loudat says the state gets its money back through jobs created and revenues increased, not to mention energy savings.
     But Loudat said this is true only for solar hot-water systems and commercial solar electric systems; the state takes a loss when it subsidizes my solar electricity. Loudat is quick to stress that these tax credits bring unquantifiable benefits — nobody can put a value on reducing the degree to which the Islands depend on oil, and tax credits provide a measure of insurance against oil price shocks.
     You might think that Hawai‘i would be pushing solar because it gets so much sun. While we do get great year-round sun, for most systems it’s the annual total that matters, not whether it arrives in equal amounts every month. On that score, parts of Southern California and the Southwest beat Hawai‘i. In fact, with all the tradewind clouds, Hawai‘i’s total annual sun is only about 25 percent better than Vermont’s. The state is interested in solar mostly because oil is hard to get, not because sunlight is more abundant.

Installing a system
     While there are plenty of contractors who install solar hot-water systems (HECO can give you a list of approved contractors), the solar electric business is just getting off the ground, and I had to look hard to find a contractor. The Yellow Pages show just 10 solar contractors statewide who install solar electric systems — just one on O‘ahu. There are, however, electrical contractors who install the systems but don’t advertise in the “Solar” section of the phone book. You can find them by calling solar energy associations or local suppliers of solar electric parts.
     Once I found a few contractors to talk to, installing the system, with its panels, wiring and electronics, turned out to be straightforward. I learned I wouldn’t need to install new wiring or buy new appliances (some die-hards run super-efficient direct-current wiring and buy DC appliances, but you don’t have to).
     Although the solar panels and HECO work together to supply electricity to the whole house, I still needed to decide which parts of the house would get power if the utility had a blackout. (Unlike most folks who sell back to the grid, I put in a small set of batteries for outages.) My wife and I have pretty clear priorities: the fridge, computer and TV/VCR are essential to modern survival, along with a few lights.
     As the electrician finished installing our system, I felt the urge to be an Informed Consumer and asked about maintenance.
     Panels? The rain will clean them. Batteries? Sealed. How about the electronics in the garage? He looked me up and down. Sensing that I needed some task, he shrugged: “You could dust off the inverter once in a while.”
    
Community-minded
     We live in Mililani, so after the panels were installed, I figured I should get an after-the-fact permit. (Mililani requires permits for just about everything — you need a permit to repaint your house the same color!) I knew this wouldn’t be a problem, because more than one solar contractor told me that state law says community and condo associations can’t stop you from installing solar panels.
     Maybe I shouldn’t be taking legal advice from solar contractors. It turns out the law says that community association rules can’t forbid solar panels outright, but they can certainly restrict how panels look. I was a little nervous when I went in to see if they’d approved the permit.
     They handed me a permit, but it was for a hot-water system. I told them I’d applied for a permit for solar electric panels. This was a new one on them. They wanted to know what the panels looked like. In a planned community, appearance is everything. They asked if I had a brochure that showed what these panels looked like. I showed them some photos of our electrician putting in the panels, at which point they began to guess that I was asking for a permit for a project that I’d already completed. In the end, they issued the permit.
    
System costs
     How much do these systems cost? The exact price depends on how large a system you need, how well you take advantage of tax credits, whether you hunt bargains well, whether you can install it yourself, whether you can depreciate them for your business, etc.
     How much do these systems cost? The short answer is: A lot. Ours will cost about $14,000 when it’s done, and that’s after the tax credits. I could have gotten a more basic system for about $10,000 but decided to make it expandable, gambling that energy prices will rise and we might someday want to cut loose from HECO after all.
     A typical Hawai‘i household would pay $20,000 to $25,000 for a system to meet all its electricity needs. But a typical household could also use a more efficient fridge, cooler lighting and a solar hot-water system — all these things will reduce your electric bill much more cheaply than solar electric panels.
     Also, most customers won’t want to cover all their electricity needs, because the utility is going to charge a minimum. As long as you have to pay for a couple of kilowatt hours a day, you might as well use it.
    
Payback time
     Will these systems pay for themselves? More than anything else, it depends on the price of oil. Hawai‘i uses oil for 85 percent of its electricity, far more than any other state, and our electricity rates rise and fall with international petro-politics. Unless you trust Miss Cleo to give you a preview of your electric bills over the coming decades, you can’t tell for sure whether you can make your own electricity cheaper than the big boys. (When the utilities predict that you can’t beat their prices, they’re probably getting their numbers from Miss Cleo.)
     Solar advocates shouldn’t listen to Miss Cleo, either. The folks selling solar electric systems can’t promise a payback because they don’t know what kind of money the system will save you in coming years.
     If solar electric systems do pay for themselves, it won’t happen quickly. If electricity prices rise as they have in the past decade, I figure that a well-designed system will pay for itself, with interest, in 20 years. That sounds like a long time, but it’s probably faster than your 401(k) will pay back. If you can build the cost into your mortgage, the payments get easier: The monthly reduction in your electric bill helps pay the higher mortgage.
     And if electricity prices don’t rise fast? Well, capitalism is rarely a sure thing. Plus, an investment which does best when oil is expensive will offset our 401(k) mutual funds, which probably do best when oil is cheap.
     I know one thing for sure: After we put in the final set of panels this spring, our electric bills will run about $200. That’s $200 a year. The friendly lady who approved our Mililani permit says she pays $300 a month.
    
Screw personal virtue
     “Conservation may be a sign of personal virtue, but it is not a sufficient basis for a sound, comprehensive energy policy.” — Vice President Dick Cheney, Toronto, May 1, 2001.
     Of all the misconceptions about solar electricity, Cheney’s “personal virtue” line is the biggest, and many of us fall for it at times. A solar electric system is more about making money than about saving the planet.
     Sure, there’s an environmentalist angle, but the oil savings aren’t much for the money you put in. There’s the survivalist motive, but a propane generator will get you through the next hurricane much less expensively. There’s the hobbyist thing, too — just ask my neighbors how much fun they had watching me jump up and down the first time I saw my HECO meter spin backwards.
     There’s even a lifestyle angle: With more plentiful electricity supply, I seem to use the dishwasher a little more often (just like I spend an extra minute in the shower when a sunny day gives us really hot water).
     But the best reason for installing a solar electric system is being a capitalist. Greed really is good.

But I don’t own my roof
     You don’t need to own your roof to get a small solar-electric system going. For a few hundred dollars, you can put together a single solar panel and an “inverter” about the size of your hand. Put it in the back yard or out on your balcony, and plug it into the wall. (Home Power magazine has a regular column devoted to “Guerrilla Solar,” systems you use to reduce your electric bill a few bucks a month without telling your electric utility — not that the Weekly would ever recommend such a practice.)
     If you don’t feel all that subversive, ask your landlord to consider installing solar electric panels; you could even offer to pay them a bit more than HECO’s rates for “green electricity.” There are several meters on the market which will measure the power produced by the panels, so you can figure how much to pay each month.
     Because a solar-electric system is a business investment, your landlord may be able to get tax benefits like a federal tax credit, a higher state tax credit or depreciation. A solar-electric installer can pitch the financial benefits to your landlord, who should then consult with a tax advisor.
     If you live in a condo, the question of who owns the roof might be a decision for the condo association to make. The economies of scale for several units sharing a large system can make it an attractive investment.
     Before you go guerrilla, or get someone else to put panels onto their roof, look at other investments first — a few efficient light bulbs may not look as cool as squeezing your own juice, but they’re a lot more cost-effective.
    
For more information
     • A Consumer’s Guide to Buying a Solar Electric System, www.nrel.gov /ncpv/pdfs/26591.pdf or $1.75 from the U.S. Government Printing Office. This is a great introduction to solar electricity; it describes how to size a system, choose a contractor, etc.
     • Local utilities offer information about both efficiency and net metering: www.heco.com, www.kauaielectric.com.
     • Home Power magazine, for the serious home hobbyist. $22.50 for six issues, or you can read it free at www.homepower.com.
     • Database of State Incentives for Renewable Energy (www.dsireusa. org) — a good reference for solar credits, programs and legal rights in every state.
     • Clean Air Certificates from the Clean Air Conservancy, www.cleanairconservancy.org
     • Solar Electric Light Fund, www.self.org
     • Solar Cookers International, solarcooking.org/sci.htm

Personal virtue, great price
     So you want to save the world, or at least save some imported oi. Here are some places to put your money, what each will do (approximately) for the world’s oil supply, and how much bang-for-the-buck each one gives.

Item / Cost / Oil saved* / Cost saved**
Install an efficient light bulb / $5. / 11. / $0.45
Buy a Clean Air Certificate / $7. / 5. / $1.40
Solar hot-water system / $3,000. / 330. / $9.
Choosing a hybrid car / $4,000. / 180. / $22.
Large solar electric system / $24,000. / 440. / $54.50

     * gallons per year
     ** per gallon
     † additional cost above normal car cost

     Your results may vary depending on tax credits, tax brackets, how much hot water or lighting you use and many other things. Also, some of these investments will last longer than others. If you already have efficient lighting, remember that your favorite nonprofit group, library or school might appreciate a bouquet of compact fluorescent bulbs.