On a cold day in December, it’s easy to be a naysayer about the prospect of generating electricity from solar energy in Edmonds. This part of the country is roundly held up as the symbol of rainy-and-dreary.
Apparently, some people around Edmonds have questioned this conventional wisdom, and are putting their wallets behind it. The Edmonds Community Solar Co-Op, formed this year by Sustainable Edmonds board member Chris Herman, installed the array pictured here. It’s a 6 kilowatt array atop the Frances Anderson Center. You can see it above the Main Street Kids child care center along Dayton.
This array began generating power in mid September, and has already generated over 650 kW-hrs of energy, which is right in line with initial estimates for this time of year. What makes this installation unique is that it isn’t a utility-owned array, or even an array purchased by a mangnanimous person of capital, but rather, by a humble local co-operative.
Now, the ECSC is looking to expand this array in the upcoming year. Costs for Made-In-Washington solar panels have come down significantly, and the Co-Op has an agreement with the City of Edmonds for additional roof space atop Frances Anderson Center to host a larger array. The financial plan is outlined below, but numbers can be hard to read in isolation, so how about an explanation?
Here’s how it works. Anyone in the State of Washington can join the Solar Co-Op by paying a joining fee of $25, and adding money to the Co-Op in increments of $1000. The Co-Op contracts out for the installation of the array, including all of the permitting, engineering, manufacture, and mounting. To help with the finance and legal complications that daunt us mere mortals, the Co-Op has enlisted the services of Seattle-based Tangerine Power. That’s why the signup page has a tangerine on it, and why each $1000 addition to the Co-Op is called a Sun Slice.
How does the money come back to the Co-Op? Two ways. First, the energy that the solar array generates is used by the Frances Anderson Center. The City of Edmonds pays the Co-Op a reduced rate for this energy, in exchange for the use of the roof.
Secondly, and more substantially, community solar power generation is incentivized through the State of Washington. The State pays the Co-Op $1.08 for each kW-hr generated. All of these funds are pooled, and the Co-Op members receive back money based on how many Sun Slices they initially purchased. This arrangement will exist until 2021, when the Community Solar regulations expire.
So why the push now for more people to join? It’s simple – taxes, and time.
First, taxes. Federal solar incentives provide Co-Op members 30% of their initial investment back in the form of a tax credit. However, the size of that tax credit is locked in as of December 31st – at least 5% of the total system cost must be invested by year’s end in 2011. So, even if there is a huge and enthusiastic growth of interest in community solar in 2012, the array size will be limited by how much was invested in 2011.
Secondly, time. As outlined above, the majority of the payback to Co-Op members is through the Washington State Community Solar program incentives. These incentives, which started in 2011, are set to expire in 2021. The later an array is installed, the less time it will earn these incentive payments. Of course, the array will still make power well beyond 2021, but we people of modest means often look to at least break even.
Do the numbers work out? Yes. The table below summarizes the numbers for a maximum-sized additional array of 60 kW. Smaller arrays would be proportionally structured. The bottom line – the array will do better than break even, based on state production incentives, by 2021.
What’s NOT included in the analysis below is what happens to the array after 2021. The Co-Op has the option of selling the array at the end of the community solar period, or even signing up with the City of Edmonds for a continued power production agreement. The roof on Frances Anderson is fairly new, and the array will have decades of rated production left in it, so there will be good reason to pursue an arrangement like this.
It’s easy to get cynical in these waning days of Autumn. But what we have here is a genuine ray of sunshine.