By Bill Wood, Cromwell Solar Project Developer
Dan Chiras, in his 2010 book, “Solar Electricity Basics,”, states, “Nationwide, electric rates have increased on average about 4.4% a year over the last 35 years. In recent years, the rate of increase has been double that amount in some areas.” Homeowner rates from Westar and KCP&L show an average increase of 7% for the years 2005 to 2013.
While electrical prices have gone up, the cost to install solar has dropped. Solar photovoltaic systems had an average installation cost of $10 per watt in 2000, and they are now around $3 per watt.
A couple more policies are in place that help make solar systems cost effective. The first is the Federal Energy Tax Credit, which was recently extended through 2021. It will remain at 30% of the total cost of the system through the end of 2019, then drops to 26% in 2020 and 22% in 2021. The second is that businesses may depreciate 35% of the system over a five-year period. Homeowners and tax-exempt entities cannot use the depreciation.
Since Kansas is in the northern hemisphere, a roof that has a slope facing south will produce the most electricity. While due south is ideal, any southerly direction works pretty well. If we have roof slopes facing due east or west, the less slope we have, the more efficient the solar system is. The panels also need to be shade-free from at least 9:00 a.m. to around 4:00 p.m. in order to produce the majority of electricity for the day and be cost-effective. A steep east or west roof will only have half a day of electricity production. South-facing panels that are shaded part of the day by anything large enough to cast shade you can see will have their production dropped. Shade-free is important!
There are over 100 electrical utility companies in Kansas, and the rates and charges they show on their bills are quite varied. Home owner rates may run from 8 – 17 cents per kilowatt hour. For businesses, some electric companies charge a base rate and then an additional demand charge. Some base rates in Kansas are as low as 5 cents per kilowatt hour for businesses, and their demand charges can sometimes double that nickel rate. When calculating how much solar can save a business, we have to ignore the demand charge, as we cannot guarantee we can eliminate or lower the demand charge. The higher the rate, the quicker a solar system will pay for itself. The size of a system can also have an effect on the payback of a system. A larger system generally has a lower cost per watt to install and a faster payback.
For more information, contact Bill at 785-831-4617 or firstname.lastname@example.org