Information brought to you by: Active Properties
The facts about Solar Energy (Photovoltaics) in Colorado
Colorado is experiencing a boom in the solar energy field not seen since the late 70’s and 80’s. Whether it’s due to a fear of global warming, diminishing natural resources, Mid-East terrorism or possibly just the desire to own a renewable and reliable energy source, solar is taking off.
The photovoltaic (PV) effect is the process by which a semi conductor diode converts visible light into an electrical current (DC). I won’t go into the history or all the technical aspects of PV but trust me when I say the concept isn’t new and the technology is proven. Simply put, the PV panels go on the roof of a residence or building. They can even be mounted as a ground mount near the building. The panels generally face south but can also be pointed west or east with some drop in performance. The DC current from the panels is routed to an inverter that converts the electricity to AC. In a typical grid connect system, the power is used by the homeowner, but if the PV is producing an excess of power at any instant, it literally spins the meter backwards and Xcel provides it to another customer, giving you a 1:1 credit for the that excess. If the system does not produce enough energy to meet the needs of the building, Xcel supplies the additional power needed – this process is seamless and automatic. And better yet, PV cells are guaranteed to produce energy for 25 years but are actually lasting upwards of 30-40 years. And if you are curious how much energy it takes to produce a PV module, it is only about 2 years worth of the energy to produce the module.
How much energy do you need? It varies but an average single family home in Colorado consumes about 8,000 KWH (kilowatt hours) per year. To achieve “net-zero” (you make as much power as you use) this average home would need roughly a 5.5kw system. This system would require about 500 sq ft of roof space.
Now to the economics of PV.
Colorado passed a bill, Colorado’s Renewable Portfolio Standard (RPS) aka Amendment 37, that requires investor-owned utility companies to have 20% of their retail electricity sales come from renewable energy sources by 2020. To accomplish that goal, Xcel offers significant incentives (about 55% of the installed cost) on the purchase of PV systems for residential or commercial use. In addition to these generous incentives by Xcel, the Federal Government allows residential buyers a 30% tax credit with a $2,000 cap. Commercial customers also get the 30% tax credit but there is no $2,000 cap. Additionally, commercial customers are allowed an accelerated depreciation on the purchase price.
It is estimated that the increase in the home value after installing PV is roughly 20 times the first year energy savings. So from a purely economic viewpoint, one would break even immediately upon installing a system. Long term, PV customers have inflation proof, clean energy for years to come.
