Rebates, falling prices power growth of Missouri’s solar sector

For years, John Spencer has dreamed of powering his Columbia home with solar panels. But it wasn’t until this year that he finally pulled the trigger. “It’s gotten much more efficient, and the price has gotten a lot cheaper,” he said.

Spencer isn’t the only one making the switch to renewable energy. In Missouri, the price for installing solar has dropped 47 percent over the last five years, according to a September report from the nonprofit Solar Energy Industries Association. And 18,438 homes across the state are now powered by solar, the report says. That’s up from 16,000 last year.

In fact, the U.S. added more solar power than any other type of electricity in the first quarter of 2018, accounting for 55 percent of all U.S. electricity added at that time, Business Insider reports. And total U.S. solar installations are expected to more than double in the next five years, according to the SEIA.

For Spencer, pursuing solar now made sense not only because of falling installation prices, but also because of city, state and federal rebates and tax credits currently available for residential installations.

Those factors have some Missouri solar installers seeing a spike in recent business. Paul Hemmel, owner of Columbia-based Missouri Solar Solutions, said his installations doubled last year, and are on track to double again this year. For the company’s first full year in 2011, Hemmel said, they generated about $80,000 in revenue. They’re projecting to bring in more than $1 million for 2018, he said.

“Year one, we installed three,” Hemmel said, regarding the company’s total projects. “Now, we do one a week.”

Rebates ‘cause a wave of solar’

Back in June, Spencer installed 21 panels on his house and garage, which gives him enough electricity to both power his home and his electric car. The whole setup ran him about $18,000.

But Spencer was able to take advantage of a city-run solar rebate, which saved him nearly 50 percent of the installation cost when stacked with a federal tax credit. In the end, Spencer said, he only paid a little more than $10,000 for something that essentially eliminated all his utility and fuel costs.

Based on current average gas costs, driving habits and fuel efficiency, solar panels could save consumers driving electric vehicles more than $1,500 in fuel costs alone each year.

“If you’ve got money that you’re going to invest for retirement or something like that, it’s kind of a no-brainer,” Spencer said. “I mean, the return is really good.”

On top of municipal and federal incentives, Missouri utilities are also offering rebates on solar. Back in June, Missouri Governor Mike Parson signed into law a new bill mandating the state’s public utility companies to pay out millions of dollars in solar rebates to their customers.

For larger companies like Ameren or Kansas City Power & Light, the law requires upwards of $14 million each to be paid in rebates by 2023. Both companies began taking applications for those programs last fall.

Drew Robinson, manager of renewables for KCP&L, said response to the rebates so far has been overwhelming. The company is set to pay $16 million in rebates by 2023 and began taking applications in October. But Robinson said more than $10 million of that total has already been pre-approved.

“It wouldn’t surprise me if we allocated all of our rebates by the end of the year,” Robinson said. “They definitely cause a wave of solar.”

Ameren, similarly, will allocate $14 million in solar rebates by 2023, a company spokesperson wrote in an email. In total, Ameren has offered $92 million in solar rebates prior to the 2018 legislation, the email stated, and those rebates have been “very popular.”

The array of incentives is also helping startup solar installers by making solar easier to sell. For Spencer, who had his panels installed by Columbia-based Green Leaf Solar — which only opened a year ago — the savings convinced him sign off on the deal, he said.

“This is not just good for the environment, it’s not just a hippy thing anymore,” said Ryan Roe, owner of Green Leaf Solar. “It’s something that makes good financial sense. So, because of that, production has certainly gone up and it’s going to continue to go up.”

Pushing solar growth further

The SEIA now ranks Missouri 29th nationally for year-over-year solar growth. Last year, the state ranked 40th.

“We’ve made some pretty big jumps in the last couple years,” said James Owen, executive director of energy advocacy group Renew Missouri. “Things are getting better.”

But Owens also believes Missouri lawmakers could be doing more to galvanize that growth. He recommends things like increasing the cap on how much energy residential solar producers can feed back into the grid and increasing how much utility companies pay for it.

Under current state law, residents are allowed to install solar systems of up to 100-kilowatt capacity, which feed excess power back into the grid. That excess energy is then bought by the utility companies at wholesale value.

Owens said raising that 100-kilowatt cap or increasing the cost utility companies must pay to resident producers would greatly increase the number of people choosing to install solar in Missouri. Renew Missouri also backed a failed 2018 bill that would have allowed corporations to generate their own power through large-scale solar arrays or wind farms, which state law prohibits.

Robinson said those ideas wouldn’t necessarily benefit utility companies or their customers, especially because of market volatility and the fact that coal and natural gas are still cheaper energy sources.

However, KCP&L does see value in pushing the envelope on solar, he said, which is why they launched a new community solar program in November. That program allows customers to opt into KCP&L’s own commercial-sized solar array to help offset energy the company derives from gas and coal, he said, and the more people who buy into the program helps make solar cheaper.

“It’s ongoing on trying to find where that common ground is,” Robinson said. “We hear them, but at the same time we have to balance for everybody, including the people who don’t want solar.”

Missouri Business Alert’s sustainability coverage is funded in part by the Mid-Missouri Solid Waste Management District.

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