Long viewed by ardent activists as "the technology of tomorrow," solar power is seeing massive growth. Three times as much electricity is being generated by solar panels in the United States today as in 1999.
It may be hard to believe on one of the shortest days of the year, but the amount of electricity generated by the sun is rising.
Long viewed by ardent activists as "the technology of tomorrow," solar power is seeing massive growth. Three times as much electricity is being generated by solar panels in the United States today as in 1999. The increases come from improved technology, stepped-up incentives and a growing thirst for alternatives to high-priced oil and natural gas.
Harnessing the sun seems only natural to Niels Wolter, renewable programs director for the Wisconsin Focus on Energy program.
"We're here because of the sun, all the renewable resources are here because of the sun, and it's the most basic source of energy that exists. Something that sustains growing plants should be used to make power."
The advantages of solar power are many: It's a clean, efficient, free fuel that doesn't have to be drilled or mined.
It has taken a constellation of factors to broaden the appeal of solar from the eco-enthusiasts and technology lovers to more conventional energy customers looking for a different way to save money.
Perhaps the biggest factor is skyrocketing energy costs, which have seen the price of oil double in two years and the price of natural gas double in the past year.
Higher natural gas prices are hitting home across Wisconsin, and customers are bracing for increases of up to 50 percent on their heating bills this winter. State utilities seek approval to pass along more than $200 million in higher electric rates just because of the natural gas supply disruptions caused by Hurricanes Katrina and Rita.
The increase in natural gas prices since Hurricanes Katrina and Rita translates to $5 million a day for Wisconsin electric customers, according to state Public Service Commission estimates.
That's why solar is attracting new investors and new customers, experts say. Solar has long had fans who either love the technology -- the hobbyists -- or want to do their part to help the environment, said Carl Siegrist, We Energies senior renewable energy strategist.
A third group of customers giving the sun a fresh look is those worried about diminishing supplies and high prices of petroleum.
"They're starting to look at it as somewhat of a hedge, given what we've seen when we fill up our cars in the gas pumps and what they're reading in the paper about natural gas prices," Siegrist said. "They understand that fossil fuels seem to be a finite resource and seem to be going up in price, so there's in a solar solution, something that might possibly be a hedge against future price increases."
A new 30 percent federal tax credit for solar projects that takes effect Jan. 1 was drafted by Sen. Lamar Alexander, a Tennessee Republican whose primary motivation was concern about natural gas prices.
The technology has been around for decades but has only in recent years seen major investment. Growing concern about global climate change has prompted countries such as Japan and Germany to pursue solar power aggressively.
A report this year on renewable energy found that the solar energy market, which leaped by more than 50 percent from 2003 to 2004, stood at $7.2 billion last year, and is poised to expand to $39 million by 2014. Those projections, along with similar projections for wind power and fuel cells, have resulted in a surge of venture capital interest in new energy technologies.
A survey of investors in oil and gas companies found that four out of five want the petroleum companies to invest in green energy, Deloitte & Touche LLP said earlier this month.
"It is eye-opening to see the level of support for green energy by individuals who choose to own oil and gas company stocks," said Greg Aliff, national managing partner, energy and resources industry, at Deloitte & Touche USA.
The growth thus far has been centered in other states, led by California and New Jersey. Steps in Wisconsin include state rebates through Focus on Energy, tax credits contained in the new federal energy law and utility incentives. Signs of solar growth include:
--Andrew Bangert of H&H Electric in Madison is seeing more and more requests for solar installations, as are other contractors.
"It's amazing," Wolter said. "Four years ago there was one system in Madison, and in the last few months I've been seeing one person per month applying for a new system."
--A Milwaukee non-profit group is raising funds to build the biggest solar power project in the state, on the edge of Riverside Park at 1500 E. Park Place on the city's east side.
The Urban Ecology Center takes advantage of solar power in a number of ways, through the design of its building to tap passive solar power, as well as through 48 photovoltaic panels that Bangert installed on its roof. The center also offers education on solar power with projects such as teaching kids to cook hot dogs in modified Pringles cans using solar power, and baking cookies and cakes in a solar oven, said Ken Leinbach, the center's executive director.
--In October, a new incentive debuted by Milwaukee-based We Energies. The incentive, the product of years of planning, is a buyback rate in which the utility pays a premium to buy solar power from customers who install solar panels on their roof.
Put simply, the incentive is designed to make a customer's electric meter dial backward thanks to the power a solar panel project can generate.
We Energies is paying 22.5 cents per kilowatt hour for 10 years to customers who sign up for the program. That incentive is practically unheard of, renewable energy supporters say.
"It's arguably the best solar rate in the country," said Don Wichert, Focus on Energy program director.
"It makes the power you generate worth two or three times more than it was, so that helps the economics of the project," said Wolter, also of Focus on Energy.
The solar panels on the roof of the Urban Ecology Center's new building already generate power to the neighborhood when the center is closed.
If funding comes through, an additional 166 panels could be installed in 2006 to fill up the center's roof and enable the center to be self-sustaining in its energy requirements.
Leinbach said that if he can receive the additional panels as donations, the center would be able to generate income from the solar power as soon as they're installed.
But the solar tariff isn't a giveaway, Siegrist said.
The company ran financial calculations and concluded that expanding solar power in southeastern Wisconsin by 500 kilowatts could be done without having to charge extra to the We Energies customers who pay extra for renewable power under the Energy for Tomorrow program.
Add it all together, and businesses or homeowners investing in solar power today can see their investment paid off in as soon as eight to 10 years, experts say.
We Energies crafted its rate to find a price to answer the question: "What would it really take to move the market?" Siegrist said.
"We wanted it to be enough for someone to move and put in a system -- somebody sitting on the fence who wasn't sure yet -- but yet it was not so high that it was paying for the whole system and ended up so high that it was viewed as a giveaway."
In less than three months, We Energies has signed up 11 customers for the new solar rate.
For now, the gains are bigger for businesses than for homeowners, because a new tax credit that takes effect Jan. 1 is capped at $2,000 for homeowners. But it's unlimited for businesses, and the energy law boosts the tax credit to 30 percent from 10 percent.
The combination of the federal tax credit and state rebates could shave at least $4,000 off the $8,000 to $9,000 cost of a 1-kilowatt solar system, which is enough to generate half of a typical home's electricity in a year.
Another motivation is to help make Wisconsin less reliant on imported power. The state's utilities import up to 20 percent of their electricity on a given day, and all of the natural gas used to run power plants and heat Wisconsin homes comes from Canada, the West or the Gulf of Mexico.
But is solar right for Wisconsin, given our long winters?
To be sure, the dog days of summer are certainly a better time than when it's snowy and overcast to generate electricity from the sun. But what many people don't realize is that Wisconsin's summer days can result in more efficient solar power generation than the blistering heat found in an Arizona summer.
"It's not New Mexico or Arizona but there are some good things in Wisconsin," Siegrist said. Solar panels operate more efficiently in Wisconsin than in hotter states on sunny days.
"We may not have the same sunshine as Arizona, but there's a better coincidence of the solar resource and peak demand in Wisconsin, that's as good as probably anywhere in the country."
That means there's an incentive to build solar because prices of electricity fluctuate as demand rises, and demand is biggest on weekday afternoons in the middle of a summer heat wave.
"That's a good time to produce energy, during peak hours when energy tends to be more expensive to procure and produce," Siegrist said.
Clearly, solar power is not going to compete with wind turbines, which are expected to be the bulk of Wisconsin's efforts to boost its supply of renewable power in the next 10 years.
A proposal before the state Legislature would boost to 10 percent the amount of power generated in Wisconsin, up from about 4 percent today. Much of the increase is expected to come from wind turbines such as the Forward Wind Energy Center near the Horicon Marsh and two wind-power projects We Energies has proposed to build in Fond du Lac County.
Solar technology has improved, but incentives are still needed to help solar power catch needed rays of interest as there's no immediate payback for solar power.
"But all the pieces are coming together so that it's really to the point where someone could have a 10-year payback on solar," Siegrist said.
Growth so far has been concentrated primarily in the Madison area, Wolter said, but he sees that expanding, particularly thanks to the We Energies initiative.
Said Wolter: "This is the decade where solar goes from fringe to mainstream."
To see more of the Milwaukee Journal Sentinel, or to subscribe to the newspaper, go to http://www.jsonline.com.
Source: Knight Ridder/Tribune Business News
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