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The solar system: Advocates say solar still a good bet for businesses

Solar panels can bring a decorative element to a business building, as is the case with this solar awning on the storefront of Full Spectrum Solar.

Solar panels can bring a decorative element to a business building, as is the case with this solar awning on the storefront of Full Spectrum Solar.

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If the only thing you know about solar energy is that the federal government wasted $530 million of your money on a failed company called Solyndra, you’re probably not much of a fan. But if you’ve been keeping up with improvements in the technology, and solar’s falling price, you’ll be more inclined to give it a second look.

In an era when the United States is threatening to overtake Russia as the world’s leading producer of oil and natural gas (a development that was thought to be a pipe dream only a decade ago), renewables like solar are still a growing part of the energy mix. Even though there are fewer government incentives for solar than in the past, advocates still say there are plenty of reasons to make the investment in, if you’ll pardon the expression, a solar system.

Some businesses demand a return on investment within a decade, while others are content to install solar for altruistic reasons — the more solar energy you generate, the less you rely on energy from coal-fired power plants, and the more you support local solar-related businesses. Whatever the motivation, there is ample support for solar in Madison, and no shortage of businesses that employ it in creative ways.

New day awning 

Full Spectrum Solar, a Madison solar contractor, wanted to make its building on East Washington Avenue a renewable showcase. It’s not only well insulated and quiet, it produces 60% more electricity than it uses, thanks to a 10-kilowatt roof system and a 1.6-kilowatt awning. The solar electric awning produces enough energy to cover 100% of Full Spectrum’s use of a Chevy Volt, its primary company car for site visits. The car does have gasoline backup, but it’s a plug-in hybrid, so the first 40 miles are all-electric, and employees can make the majority of their trips without using any gas. 

“The roof and awning systems are tied into the main electrical system, but we like that the awning gives a visual representation of what the car is drawing,” says Burke O’Neal, director of Full Spectrum Solar. 

The awning, located on the south wall (which also happens to be the storefront), is an example of how solar panels can be presented in a decorative way. It also provides shade from the summer sun and allows heat and light to pass underneath in the winter. 

In a photovoltaic (PV) system, the main components are: the modules or panels, which produce direct current from sun, and the converter, which converts the direct current into alternating current to make it compatible with the local utility. The system also includes aluminum racking and electrical wiring. 

Typically, the modules come with a 25-year manufacturer’s warranty, and the electrical pieces and aluminum connecting hardware can be expected to last as long as the building. Even though there is an upfront investment, the most underappreciated benefit, and the driver of ROI, is that solar systems function with very little maintenance over their lifetimes. 

“When you get up to larger commercial systems, we are seeing positive cash flow [return on investment] in less than 10 years,” O’Neal noted. “There are some businesses that might say, ‘Well, if the investment pays for itself entirely in three or four years, I’m going to do it.’” 

At some point, the “payback time” will probably get there, but another overlooked benefit is that the systems already are producing power for about twice as long as it takes to recoup the cost. “When I talk to someone who is skeptical about making the investment, a couple of years after they have done it they have forgotten what they spent and they are excited to see that greatly reduced the monthly electric bill,” O’Neal commented. “I don’t know what putting up a PV array is going to cost over the next 25 years, and I don’t know what electric rates are going to be in 25 years, but having that variable cost reduced is another benefit. There is less risk of being hurt by future [electric] price increases.” 

In addition, installation costs are coming down, dropping in half in the past couple of years alone. O’Neal says Full Spectrum installed systems in 2002 for $8 to $10 per watt. Now, some of the larger commercial systems cost less than $4 per watt installed, depending on the specifics of the site. Part of the reason for the price drop is that PV module manufacturing capacity has increased significantly due to stiff competition from Chinese manufacturers, who can produce the modules less expensively than their economic competitors. The majority of the modules installed by Full Spectrum are made in the United States, and American manufacturers have had to reduce their prices as well.

The panels themselves are much more efficient, as are the converters. “A common solar module size is roughly 3 by 5 feet, and that same module in 2002 might only be 175 watts,” O’Neal explained. “Now, that module might be 250 watts. So there has been steady improvement in the energy efficiency of the module, and how much power they can produce in a given area.

“The average efficiency of an inverter 10 years ago might have been closer to 92%, and now many of them are up around 98%.”

Expression of values

With their environmental impact and carbon footprint in mind, American Family Insurance has spent roughly $250,000 installing 10-kilowatt PV systems on four buildings — including two warehouses — within Madison Gas & Electric’s territory. Three of the installations have 42 panels, while another, at the company’s East Regional Building, has 48 panels.

Each system produces approximately 12,100 kilowatt-hours of energy per year, resulting in energy cost savings of about $3,000 annually, per location, or $12,000 per year. Thanks to incentives provided for in MG&E’s Green Energy Partners program and Focus on Energy, the payback of the entire system, which was installed in 2011, is only six years.


Nov 19, 2013 03:33 pm
 Posted by  Anonymous

Ms. Lerner's comments are clear and well-reasoned. I hope IB readers take note. As a Sustainable Business Network member and regular IB reader I often wonder if IB's editorial purpose is to encourage innovation and economic development, or maintain the status quo? Solar and energy efficiency businesses contribute to the local, regional and national economy too. Upfront costs of all building improvements and energy efficiencies are high with long and short-term paybacks built into planning. Is it IB's contention that no business can afford to be community or energy-minded without government incentives?

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