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Experimental Advanced Renewable Program - bigbumble
August 5th, 2009
03:33 pm

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Experimental Advanced Renewable Program
Well, I'm about to blow my liquid nitrogen generator money on something frivolous. This time it will be a 2.45 kilowatt fusion energy collector. That is, solar cells and a grid inter-tie inverter. Consumers energy has gotten tax breaks if it puts in enough solar energy. The breaks are enough that they are willing to pay $0.65 a kilowatt hour for "special" customers with a 12 year contract. I sent in my paperwork today because there is a good chance I am "special". I could be the first kid on the block with solar panels on his garage roof.

Current Mood: hopefulhopeful

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From:hawklady
Date:August 5th, 2009 09:43 pm (UTC)
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65 cents per KWH and not 6.5 cents? WOW

A twelve-year contract is pretty intimidating, tho.

If you don't mind my being nosy, how much is this out-of-pocket to you, and are there any tax breaks you get for it? Do you sell them the extra or do you get the extra after the contract minimums are met?

I've often considered solar for this place, but the numbers always were being presented by people trying to sell the idea so I looked askance (and never really had the interest to dig deeper and confirm for myself).


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From:bigbumble
Date:August 6th, 2009 01:50 am (UTC)
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I have to set up a separate system that feeds through a separate meter directly to the grid. I will sell all of the power (and only the power) from my solar panels to the power company. For the system I am looking at, the price estimate is about $18,000. -Definitely a pricey operation. There is a 30% income tax credit on that investment. The best estimate is that I will sell about 2,000 kilowatt hours per year. Over a twelve year contract I will just about break even.

The experimental program is limited to 2000 kW capacity state wide (Michigan) with 500 kW reserved for private homes, the rest for businesses. I put my name in the hat in early July as soon as I was allowed.
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From:hawklady
Date:August 6th, 2009 02:20 am (UTC)
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OK, I'm obviously missing something here, sorry if this sounds snipish.

What's in it for you?

Is there some special tax treatment for the income you will be getting from selling the power?

If you set this up as a business so that the maintenance, depreciation, etc, can be used to offset the sales income, then does that affect the 30% income tax credit? I could be wrong but I thought that was for individuals, not business entities.

The way it's described above, they have homeowners footing the bill for the capital outlay and maintenance in the hopes there's enough sun and service-days to payoff in 12 years, after which it'll start being real income-producing?

It's not that I'm disagreeing with this as a good idea. I'm just not "getting" whatever the catch is that makes it good for the consumer. The "sell entire output" is quite different from what I see most people who "sell power" doing, which is any excess after meeting their own needs goes back out to the power company. In that situation the benefit to the homeowner is pretty clear.

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From:tigertoy
Date:August 6th, 2009 05:54 am (UTC)
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If they are really paying him $.65/KWH delivered to the grid, he is way better off selling every KWH he can generate, and then buying back the power he can use at his regular customer rate, which is probably around $.10 today. The retail rate will surely be higher in 12 years, but if it is more than 6 times today's rate, society will probably have imploded anyway.

2000 KWH generated in a year sounds awfully low for a system labeled as generating 2.45 KW. It also sounds absurdly low for a system costing $18K. I know that garage-roof photovoltaic systems don't actually make financial sense yet (government subsidies aside) but I thought they were within a factor of 2 or 3.
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From:bigbumble
Date:August 6th, 2009 11:42 am (UTC)
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At the end of the contract I will still own the solar panels(with 18 years left on their nominal 30 year life). I will connect them to my regular house meter for net metering and continue to effectively get ordinary electric rates for the power. Essentially I will be able to justify doing something I have wanted to do anyway.

I think you have accurately pointed out the power company's motivation for the program.
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From:archiver_tim
Date:August 6th, 2009 11:18 am (UTC)
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If there is a general power failure, would you be getting your generated power back to run your house?
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From:bigbumble
Date:August 6th, 2009 11:30 am (UTC)
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No, any system attached to the grid has to be designed to shut off during power failures. This is both for safety and technical restart issues.
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From:hsifyppah
Date:August 6th, 2009 01:09 am (UTC)
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There is just really no denying that you're... special. :)
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