The cost of installing solar-power systems on homes and businesses in Montana is as low as it’s ever been, industry officials say.
Yet expanding the scope of such systems for businesses and larger entities here is largely restricted by limits on “net metering,” which allows a business to sell excess power that its solar system generates.
“I think it really inhibits the growth of the solar industry, by putting a 50-kilowatt cap on (net-metered) systems,” says Todd Scott, co-owner of Bozeman Brewing Co., which installed a solar-power system on the roof of the brewery last year. “If that cap were larger, or it didn’t exist at all, you’re going to have some of the larger companies more interested in investing in solar.”
NorthWestern Energy, the state’s dominant electric utility, opposes allowing larger net-metered solar-power systems – unless changes are made in the payment system.
The company says net-metered customers may not be paying their fair share of maintaining NorthWestern’s statewide electric “grid,” which all customers use.
NorthWestern also worries that adding more, larger net-metered systems may have unknown impacts on the overall grid and other customers, says company spokeswoman Claudia Rapkoch.
“We have to recognize that not every customer is going to be in a position to put private solar on their home (or business),” she told MTN News. “So you have to make something that is fair and equitable to all.”
These questions are being examined by a legislative panel, which has requested drafts of several bills – including one that would quintuple the 50-kilowatt cap for tax-exempt structures.
Meanwhile, solar installers say they’re still busy installing mostly smaller systems, such as those on homes.
“What we’re seeing is it’s becoming more accessible to everyone,” says Brad Van Wert of Harvest Solar in Bozeman. “We’re able to sell systems to people much more affordably. … It’s much more affordable than people think.”
In the past half-dozen years, the cost of installing a roof-top solar system on a home or business has dropped from about $7 to $3.50 per installed watt, or less, Van Wert says.
A solar-power system for most homes in Montana ranges from 4,500 to 7,000 watts, depending on the size of the house or how much power one wants to generate.
At $3 per watt, those systems cost $13,500 to $21,000 to install — but that’s before a 30 percent federal income-tax credit and an additional state income-tax credit. Once those are figured in, the cost range drops to $8,500 to $14,000.
Installers say with a net-metered system, the cost of those systems can be paid off in a dozen years or so, depending on how much power one uses – or generates.
On a net-metered system, whenever you generate more power than you consume, that excess flows back and is sold to the utility. If you generate less power than you need, such as during the winter, you buy power from the utility.
At the end of the year, the sale credits and your purchases are netted out on your bill.
Gary Weiner, a Bozeman homeowner who installed a net-metered system last year, says he sized his system to pay for 80 percent of his power, but so far it appears to be producing 90 percent of his electricity.
“It pretty much eliminated my electric bill after installation,” he told MTN News. “It feels good powering my house with alternative energy and not using fossil fuels.”
Weiner says the system is “idiot-proof” once it’s installed and has a 30-year warranty.
At Bozeman Brewing, a large part of the business’ roof is covered with solar panels.
Scott says Bozeman Brewing’s 47-kilowatt system, installed last year, generates about one-third of the business’ electricity. He wanted to put in a larger system, but the 50-kilowatt limit prevented a bigger net-metered system.
Scott estimates that the system will pay for itself in eight years, and then essentially generate free power for as long as the solar panels last.
“We would have gladly tripled or quadrupled,” he told MTN News. “If we could have put a larger system and tied it into the grid, we would have.”
Under current laws, NorthWestern pays net-metered customers the same amount for excess power that it charges them for power the customers buy – about 11 cents per kilowatt hour. The average home consumes about 750 kWh per month, or 9,000 kWh a year.
Rapkoch says the company believes it should not have to pay full price for that excess power, because the 11 cents paid to NorthWestern for power covers the cost of maintaining the entire electric grid: Power lines and poles, meters, substations.
The owner of a roof-top solar system does not have those costs, so it shouldn’t necessarily be paid that all-inclusive price for its power, she says. The excess power from roof-top solar systems also comes into the system whenever it’s generated, and not necessarily when it’s needed elsewhere, she adds.
“A private solar customer should be reimbursed, or receive a credit … based on the value of the energy that they provide,” Rapkoch says.
She says the company may prefer creating a different “class” of regulated customer for net-metered systems, that has different electric rates.
The Energy and Transportation Interim Committee of the Legislature voted last month to draft several bills on net-metering. It will examine the drafts at a future meeting and may vote on whether to advance them to the 2017 Legislature.
Rep. Daniel Zolnikov, R-Billings, who voted to draft some of the bills, told MTN News that he supports raising the 50-kilowatt cap for net-metered systems.
“Right now it’s basically a barrier to entry for anyone to try to compete against the monopoly of the utilities in the state,” he says.
He also says fears about widespread, negative impacts of more solar-power systems appear overblown.
“There are very few people using this, and so increasing the cap will not hurt,” Zolnikov says. “It will also collect (more) data. Once we get that data, we’ll see if there’s a real cost shift or not.”
Ben Brouwer, policy director for the Montana Renewable Energy Association, says solar power is producing only one- or two-tenths of the electricity generated in Montana.
“There is tremendous potential for solar to grow here,” he told MTN News. “We have a very good solar resource and a lot of interest from consumers. … I think it’s important that some of the barriers to solar are addressed.”