With a recent decision by the Public Service Commission of Wisconsin, the Focus on Energy program is set to end its incentive program for residential solar and small wind energy systems. This will be the second early termination of our collective investment in renewable energy in the past three years.
The MREA has been actively involved in the Wisconsin renewable energy market for nearly 25 years. And, without reservation, we can say that in all of those years, there has never been a better time to buy a solar system for your home or business. This remains true without the meager incentive offered by Focus on Energy.
While the price of fossil fuel generated electricity continues to rise, the cost of solar power has dropped significantly. According to the Wisconsin State Energy Office, more than 60 percent of the electricity in the state is generated by burning coal at a cost of almost a $1 billion to out-of-state coal providers. According to the Energy Information Administration (EIA), the price of coal for electric generation rose 24 percent from 2007-2011. This represents a constant upward pressure on electric rates, averaging 6 percent per year over the last decade.
On the flip side, when Focus on Energy first started providing incentives for solar systems, the cost was between $8-$11 per watt installed. Today, according to a report from the Solar Energies Industries Association (SEIA), the average price is $4.93 per watt installed for residential solar systems. And in Wisconsin, we have consistently seen prices of $4/watt for residential and commercial systems installed in the last year. This represents a more than 60 percent price decrease in just five years.
Beyond this, new financial models, including community shared solar, are further driving prices down. According to SEIA, community shared solar projects have demonstrated installed costs as low as $2.14 per watt.
Amidst these improving market conditions, renewable energy incentive programs can help create market stability and can be phased out, if they are no longer needed. California is the number one state in solar installations and has a very effective renewable energy incentive program, the California Solar Initiative (CSI). In the CSI program, financial incentives are slowly reduced and eventually phased out. Unlike their Wisconsin counterparts, California businesses have certainty about incentives and can market and plan accordingly. Even with reduced incentives, the solar market in California continues to grow at an impressive pace. In the first quarter of 2013 the residential solar market in California grew 39 percent over the same time period in 2012 and in this same time period, nearly 20 percent of California’s installed solar was installed without state incentives. This success is a result of a well-designed, transparent state incentive program.
In contrast, we can look at Wisconsin’s incentive program. In 2009, Wisconsin saw 267 solar electric systems installed with Focus on Energy incentives. During the first six months of 2013, only 47 solar electric systems were installed with Focus incentives. This decline is occurring despite the systems costing less than half the amount of 2009. The price of solar continues to drop and the number of solar installations throughout the rest of the country continue to rise, it is increasingly clear incentive uncertainty in Wisconsin is having a negative impact on the market.
With affordable costs and an uncertain future for electric prices, now is a great time to invest in a residential solar system, even without Focus on Energy incentives. There is no need to wait for the Public Service Commission to get their act together. You can ask the PSC to overturn this poor decision here: http://1.usa.gov/1c3kxMH, comments are due by August 13, 2013. Now is the time to invest in your clean energy future. As Thomas Edison once said: “I’d put my money on the sun and solar energy. What a source of power! I hope we don’t have to wait till oil and coal run out before we tackle that.”
Doug Stingle is the Development Director at Midwest Renewable Energy Association
The Midwest Renewable Energy Association (MREA) is a non-profit 501(c)(3) educational organization. Founded in 1990, the MREA promotes renewable energy, energy efficiency, and sustainable living through education and demonstration. To learn more, call 715-592-6595 or visit www.midwestrenew.org.
