A cheesehead more interested in cheese than wearing the right jersey
Some may call it Dairyland, but folks here in the Badger State know that Wisconsin has a whole lot more to offer than its cheese. From the mighty Mississipp’ in the west to big ole’ Lake Superior in the north and everything in between, Wisconsin offers some of the most beautiful environments anywhere in the nation. 46% of the state, in fact, is covered by forest, including the 1.5 million acre Chequamegon-Nicolet National Forest. Needless to say, Wisconsin has a great deal to protect by promoting green energy. So how is solar policy doing out here? Let’s look.
Wisconsin’s Renewable Portfolio Standard
A Renewables Portfolio Standard is a law or other piece of regulation that mandates that a certain percentage of at state’s energy production comes from renewable resources by specified target dates. WIsconsin is on board with a statewide RPS, mandating that 10% of statewide electricity production come from renewable sources by 2015. We like the 2015 number — too many RPS’s push their goals far out into the future– but 10% is likely too low of a target to promote strong incentives for renewable energy.
A strong RPS with high targets is the core of all good renewable energy policy. Without mandatory renewable energy production levels, utility companies have no motivation to promote conversion to renewable energy sources like residential solar power system. With a strong RPS, it becomes cheaper for the utilities to help fund your solar power system than to pay penalties for missing RPS goals. That’s when you really see incentives kick in.
In short, a strong RPS is generally the single most effective law that state legislators can implement to promote renewable energy. Wisconsin lawmakers are missing a golden opportunity.
Solar Performance Payments in Wisconsin
Customers of 3 Wisconsin utilities are eligible to participate in solar power buyback programs. These are not true performance payments; you continue to purchase electricity from the utility at the normal retail rate, while selling all of the energy produced by your solar power system. In most places these buy-back programs or feed-in tariffs don’t make a lot of sense for residential systems like yours, but a couple of the options available to some folks here are pretty strong. Let’s go over all 3.
First, customers of Xcel energy you are eligible to receive an initial rebate of 1.50/watt installed, up to $15,000. After the initial rebate you’re locked into a ten year contract to sell your solar power to Xcel at $0.11/kw. Second, customers of River Falls Municipal Utilities (“RFMU”) can enter into a ten year contract to sell solar energy to RFMU at a rate of $0.30/kwh (4kw system max). Finally, customers of Madison Gas & Electric (MG&E) that are enrolled in the Green Power Tomorrow (an optional program to purchase green energy through MG&E) can sell solar energy to MG&E at a rate of $0.25/kwh. The contract to purchase power is for ten year, but you may opt out with 30 days notice.
Wisconsin Solar Rebates
The statewide Focus on Energy program will launch on July 1, 2012. Details have yet to be announced on what individual rebates will be available.
Solar Tax Credits in Wisconsin
Wisconsin does not offer any tax credits to promote renewable energy.
Solar Tax Exemptions in Wisconsin
Fortunately there are tax exemptions to help bring down the cost of your solar power system. You save 5-5.5% right off the bat via the sales tax exemption. Even better, you’re exempt from 100% of the property taxes normally associated with with the big increase in home value you’re going to get from installing a solar power system. (we’ll get to that).
Utility Prices in Wisconsin
WIsconsin pays an average of 13.23 cents/kilowatt-hour (“kwh”) of electricity. That’s noticeably above the national average of 11.43 cents/kwh, but it’s still pretty cheap. Too cheap, in fact.
Electricity is relatively inexpensive because most of our electricity still comes from dangerous amounts of fossil fuels. The cost of those fossil fuels in dollars and cents may be low (for now), but the environmental costs are astronomically high. Switching to solar power already saves you money, but when scarcity and environmental costs drive up fossil-fuel based energy prices, the early switch to solar power is going to be saving you piles and piles of money.
Wisconsin Net Metering and Interconnection
Net metering requires your utility to monitor how much energy your solar power system produces and how much energy you actually consume. If you produce a surplus, you get credit for it on your bill.
Net metering in Wisconsin is a bit scattered, but generally strong for residential customers.
All investor-owned and municipal utilities are required to offer a net metering program, but electric cooperatives are exempt from the requirement. So most utilities offer net metering, but there is a bit of variation among how the programs are implemented. Generally all surplus kwh are credited at the customer’s retail rate, and applied to the next bill. If credit exceeds $25, the utility must cut you a check for the amount. Some utilities may vary a bit, but that’s a pretty good snapshot. The one big exception is Xcel, which recently received permission to reconcile credit on annual basis at the utility’s avoided cost rate.
One way or another, you’re getting credit for all that extra energy at a pretty decent rate per kwh. Overall we gave net metering in Wisconsin a C because of system size limitations that prevent larger customers from efficiently meeting all on-site needs with renewable energy, and the law’s lack of a safe harbor provision that ensures the utility can’t charge you extra fees for net metering. But for a residential solar power system like yours, net metering is pretty solid here.
Wisconsin’s interconnection standards are more of a mixed bag. Your residential system is small enough (less than 20kw) to avoid any fees for reviews or studies. That’s great. Unfortunately, the money saved there will be spent purchasing insurance coverage, and installing a redundant external disconnect switch.
5kW Example Return on Investment in Wisconsin
What do all the numbers add up to for you? Let’s check:
Installing a typical 5kW solar system should start at about $25,000. Don’t worry, that’s going to come down a lot in year 1.
- The federal government calculates the 30% tax credit based on out of pocket costs. Until the state rebate details are determined (and the rebate is offered, of course), that means 30% of the full $25,000. Subtract $7,500 for a new price of $17,500.
- After the tax credit we subtract your first year’s energy savings, which we estimate to be about $774. That brings your cost to $16,726. That’s a pretty significant discount already, even before the state rebate program starts up..
- With a conservative estimate for the future rise of electricity prices, you can expect your new solar power system to pay for itself in about 15 years. After that you’ll be turning a profit (yes, a profit) for the rest of the life of your solar panels (typically about 25 years). We estimate that profit to be about $20,000 through 2037.
- In addition to all that money directly in your wallet, that new solar power system also increases your home value by $15,479, all of it tax free!
- Not to be forgotten, you’re also pumping out a bunch of green for the environment. Tree green that is. The fossil-fuel energy you’re not using is the carbon-saving equivalent of planting 103 trees a year, every year your solar power system is humming.
These numbers are estimates. Your home is unique and how much power you generate and how much money you save depends on that uniqueness. The best way to find out how much cash switching to solar can save you is to get one of our free quotes, and an expert installer in your area can draw up a home-specific estimate for you. Your quote is 100% free (yes, that’s right, 100% free) and you can get as many of them as that smart shopper in you desires!
Wisconsin Solar Consensus
Grading solar policy is really something of a waiting here. At the moment, both the cost after year 1 and the payback timeframe are sub-par, not quite reaching the line we’d call “solar friendly.” That merits only a weak “C” grade. But all that could change in July when the details of the state rebate program are released. Check back here for updates as more information becomes available