Savings from Solar investment more significant than many realize

By Rob Danielson, SOUL of Wisconsin

Rural families save money in three familiar ways.  They trade goods and labor rather than use cash; stock-up on staples when the prices are lower; and, if savings over time are substantial, they buy something now, and may even take out a loan to do so.  With solar, a family can exploit all three strategies.
 
Families that used to pay $35-50 per month now face electric bills in excess of $100 and the escalation is threatening the competitiveness of Wisconsin businesses. Only seven other states have experienced faster rising electricity costs. Compared to the national average of 3.4%, our costs increases have averaged 4.5% per year— almost double that of inflation.  

Utilities strive to maximize profits for their shareholders, and reining them in to keep the cost of power competitive is the job of state energy laws and the Public Service Commission.  But State legislators and the Commission have failed.  They allowed utilities to pile on high interest, long term loans for power plants and transmission lines, whether they are essential or not.  The Commission trusted utility projections that energy use would significantly increase and when use dropped and leveled off, payments on debt intensified.

About 40% of the average electric bill goes to financing costs on capital utility investments. Had Wisconsin been smart, a $1 per month increase in energy efficiency would have demonstrated that buying new power plants and transmission lines is imprudent.

The $12 billion we will pay over the next 40 years just from recent fee hikes could have funded the best energy efficiency and solar incentive programs in the U.S. These dollars would have saved more than $24 billion in operation costs and flowed into our homes, farms, businesses and communities rather than to utility financing interests.


Because the debt is long-term, our electricity costs are certain to increase at least 4.5% per year. By employing the home powers of solar, electric customers are freed of these price escalations.

A house that generates enough solar power to match its use of 350 kilowatt-hours (kWh) per month will have saved more than $30,000 after 30 years; a small business that matches 1,000 kWh of use and fees with solar will have saved more than $100,000.

Wisconsin’s “net metering” provisions allow each home, farm, business or community solar farm to generate electricity from the sun.  A special meter measures power flow in two directions. On sunny days when more solar power is generated than the house can use, power flow from the house into the utility line is measured. Neighbors consume this clean power. On overcast days and at night, the meter functions traditionally and measures grid power used to run the house. 

Solar “net metering” is like cash-free trading. You pay only for the electricity you use that your solar installation didn’t produce.  If an installation is sized to produce 350 units of energy per month and the house requires the same amount, there is no charge for electricity.  Buying solar is like prepaying your future electric bills, but at today’s much lower cost.

Financial terms vary from utility to utility, but even the least favorable produce substantial savings over time. Unlike investments in cars and houses, solar requires minimal upkeep and the investment is repaid in about 15 years. As solar equipment is usually warranted for 20-25 years, the yield is 15-30 years of nearly free electricity.  Families on tight budgets can investigate the lower interest loans for solar and energy efficiency through Westby Co-op Credit Union’s “LEG-Up” program.

It helps to team-up with an organization and other families to share questions and compare quotes.  Solar Installers welcome multiple inquiries and most allow homeowners to provide non-specialized labor. Contact info@SOULWisconsin.org for a free investment calculator via email to compare savings between net-metered installation, community solar, off-grid solar, energy efficiency and a CD earning 2.5% interest.

Contrary to assertions that solar adds costs to running the grid, solar reduces long term costs by relieving stress on equipment and reserves during periods of high use. If you cannot install solar where you live, meet with your utility about community solar. If money is tight or you live in apartment, there are low or no cost ways to reduce your energy use and your carbon footprint such as, http://bit.ly/CantAffordSolar

As long as utilities are guaranteed around 11% interest on loans for new power plants and transmissions lines paid through electricity charges, they will stringently oppose our abilities to lower use through efficiency and solar. Acting now aids in educating our state lawmakers about avoiding needless utility debt and protects your family’s future budget as well.
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