Harnessing the Sun: the state and opportunity of solar in Maine

By Tux Turkel

Going solar wasn’t a big stretch for Serena Graham. She grew up in an environmentally-aware family, with a father and two cousins who had solar-electric panels. So when she and her husband bought a 1962-built house in Waterville, they insulated and air-sealed and dumped oil heat fora wood pellet boiler. They replaced power-hungry lights with LEDs, to reduce electric demand.

Those upgrades set the stage last year for taking advantage of a south-facing roof and installing a 5.6 kilowatt solar array, which is designed to meet all of the home’s electric load. The system cost $12,000 after a federal investment tax credit. Even last winter, when the sun angle was low and there were fewer clear days, the panels had slashed a typical $100-a-month electric bill to $25, saving $900 a year.

For Graham and her husband, having their home generate as much energy on an annual basis as it’s using—a concept called net zero—is important.

“It was only a matter of time for us, because the cost of PV (photovoltaic panels) was falling,” she said. “We wanted to be net zero. That’s always been our goal.”

What finally made that goal possible was the improved economics of solar. Graham fi gures that after the system’s paid for in around 13 years, it will provide free electricity for at least 10 years.

Other Mainers are going through a similar thought process in 2016. This mix of wanting to do the right thing, while also making the numbers add up, is driving the growth of solar energy at Maine homes.

Equipment prices have fallen so much that the investment in solar electricity can pay for itself in 8 to 13 years, depending on factors including the size of the system, the home’s orientation, and how the purchase is financed. That may seem like a long period to some, but solar installers point out that panels have no moving parts and typically carry 25-year warranties, so they will be generating free power long after their costs are amortized. For a growing number of homeowners, it’s a comfort not to worry about what happens to electric rates in the future.

This long-term perspective is important in Maine today. Maine may be the first state to greet the sunrise, but with one major exception, Maine state government has largely turned its back on solar energy. Incentives and policies that have solar energy flourishing elsewhere have lost political support here in recent years, notably in the governor’s office.

But there was some encouraging news earlier this year. A stakeholder group that included utilities, solar installers and some state officials has reached a compromise on a proposal aimed at greatly increasing solar generating capacity in Maine. It was being considered by the Legislature in March, and its fate was unclear at publication time.

Despite the politics, Maine residents are expressing great interest in solar energy. To meet the demand, installers have been taking advantage of falling equipment prices and partnering with towns to organize “Solarize” programs that offer discounts for bulk purchases by residents. They also are building “community solar farms,” which attract homeowners who want the benefits of solar but can’t install panels at their houses.

These initiatives rely heavily on two government policies: The first is a federal Investment Tax Credit for solar energy. Late last year, Congress extended the credit through 2021. It’s a big victory for renewable energy, chopping 30 percent off the installed cost. This critical credit was set to expire, so the long “runway,” as installers say, now gives the industry a predictable flight path and timeline to make investments.

“With the extension of the tax credit, Maine’s solar companies are now positioned to invest more resources and meet the growing demand,” said Vaughan Woodruff, who installed Graham’s system and is the owner of Insource Renewables in Pittsfield.

The second key policy is a state rule called net metering. This is the mechanism through which residents with solar electric panels are compensated by their utility for the power they generate. When the sun’s shining and the panels put out more power than needed, the extra electricity is sold back to the grid. Residents then get credits from their utility toward future demand, when it’s dark or cloudy.

Net metering is being reviewed in Maine by lawmakers and utility regulators. The outcome is crucial, especially for homeowners and installers, because most work in Maine is being done in the residential sector.

That’s why 2016 is shaping up to be a pivotal time for solar and for Maine’s small but ambitious installation industry. “The future of Maine’s solar industry is highly dependent on policy and/or regulatory decisions in the coming months,” Woodruff said. “Our commercial and industrial markets are non-existent, but that could change, if current discussions progress in a positive direction. But we could also see (negative) policy developments significantly alter our burgeoning residential sector.”

Woodruff laments that, in almost any ranking, Maine is a laggard. The latest state-by-state analysis by the Solarpowerrocks.com web site ranks Maine 28th in the nation and gives it an overall grade of “C,” despite favorably high electricity rates and an existing net meter rule.

The reasons? Maine lacks key incentives that in other states are fueling growth. Take New York, for instance. It earns an A+ rating, thanks to a full slate of tax credits, rebates and tax exemptions. Those factors cut the average payback time in New York to seven years.

These combined policies also translate into jobs and economic activity. No other state comes close to California, with 54,690 solar jobs in the most recent census by the Solar Foundation. But Massachusetts ranked second, with 9,400 jobs and with a 46 percent growth rate. New York came in 4th, with 7,284 jobs and a nearly 40 percent annual growth rate. Maine ranked 43rd, with 400 jobs.

It’s noteworthy that these top-ranked states are in the Northeast, where some people think it’s too cold to make good use of solar energy. But the amount of sunshine matters more than temperature, and it turns out that Maine, especially the coastal plain where many people live, catches a good dose of rays. According to the National Climate Data Center, Portland receives 57 percent possible sunshine and averages 101 clear days a year. That’s as many clear days as Tampa, Florida, which receives 66 percent sunshine.

The combination of good solar potential, a desire to do the right thing and improved economics has come together over the years at Deb McDonough’s house in Scarborough. Inspired in 2002 by a lecture on energy and the environment, Deb McDonough set out to reduce her family’s dependence on fossil fuels.

McDonough began by tightening her 1994-built Scarborough home. Then she swapped oil heat for wood pellets. By 2007, she was embracing the sun, first to heat water and then to generate electricity, which also helps charge a Nissan Leaf electric car.

McDonough’s house, with its south-facing roof, made the most of that sunshine as she slowly weaned her family off oil. A 60-tube solar hot water heater kept the oil boiler from fi ring in the summer, and a second unit warmed the kitchen floor. A 3.3-kilowatt array, followed by a 2-kilowatt series, met the home’s annual electric demand.

That equation changed in 2013, when the Nissan Leaf arrived. Charging an electric vehicle created additional power demand. But the family liked the Leaf so much that they replaced it last year with a new one.

“Every project is projected to pay for itself through energy savings within the warranty of the equipment,” she said. “With some, namely the water heater and newer solar electric, they are generating a net savings much more quickly.”

Residents are finding other ways to begin their transition to sun power. Recently, many have begun banding together with neighbors, installers and town officials in the Solarize movement, which allows them to leverage the power of group purchasing to save money on installations.

The Solarize concept is a national model that was first launched in Maine in 2014, in Freeport, and since has expanded to other towns and regions. Through a competitive bidding process, the town chose two installers to run the program and put up the systems. The installers worked with the town to generate interest, so they could install as many systems as possible during a certain time period. Volume purchases of equipment allowed them to offer discounts.

By the close of the sign-up period, 180 Freeport residents expressed interest. In the end, 41 projects were installed with more than 240 kilowatts of capacity. A typical 4.4 kilowatt system, which can meet the needs of a typical home, had a gross price of $15,270. The Solarize discount cut that by $800, and the federal tax credit took the net cost down to $10,073, which has a simple payback of 11 years.

“From the start, I’ve been surprised by the interest,” said Donna Larson, Freeport’s town planner and the program’s organizer.

Larson kept hearing from people who saw the panels at a neighbor’s house and had heard good things. That led to a second phase of the program, which was announced early this year. It will include the abutting towns of Pownal and Durham.

Solarize Freeport has spawned similar programs in Brunswick, a collection of towns in the midcoast area and other parts of the state.

But Solarize programs don’t work for everyone. Some homes lack a good southern orientation for their roof or have a shady yard. Others may be in a condominium development, for instance, and have a homeowners association that prohibits rooftop panels. But for those residents, another option is emerging—the community solar farm.

“We see tremendous benefits for folks when solar on their property isn’t the best choice,” said Phil Coupe, cofounder of ReVision Energy in Portland, the state’s largest solar installer.

ReVision installed a community solar farm in Freeport late last year on land behind the Maine Idyll Motor Court. The 200-panel array, rated at 75 kilowatts, is visible from Interstate 95.

Here’s how the deal works: ReVision leases the land from Maine Idyll, which receives an annual payment. It then solicits interest from residents anywhere in Central Maine Power Co.’s service territory, which covers most of the state south of the Bangor area, who want to buy shares of the solar farm. By law, community solar farms in Maine are limited to 10 shareholders, including the host, which in this case is Maine Idyll. It’s possible that the limit could be expanded, depending on the outcome of the solar bill under consideration in the Legislature. Shareholders are eligible for the 30 percent federal tax credit and get the benefits of net metering. CMP credits their electric bill for the power generated, just as if the panels were installed on their homes.

This arrangement was perfect for Craig Snapp of Brunswick. Snapp and his wife live in a planned-unit development and have renovated and heavily insulated their home so it can be easily warmed with electric heat pumps. But condominium rules prohibit solar panels and besides, Snapp said, his roofline runs east-west. “This solar farm concept gives us a way to participate in solar electricity,” he said.

Snapp purchased a 10-percent share. It cost $25,000, after taking the tax credit. If he moves, he can sell his share in the solar farm, as long as the buyer lives in CMP territory. “We can basically say we are net zero,” he said. “It’s an asset to our home, to our meter.”

Lynne Gilbert made a similar calculation. She and her husband live in Bristol in a home also warmed by electric heat pumps. She wanted to offset all the power, on an annual basis, through solar. So along with other Lincoln County residents concerned about climate change, she helped organize the Edgecomb Community Solar Farm Association. She now serves as president. The solar farm, which has 182 panels and is rated at 46 kilowatts, was set up last summer on a member’s barn and surrounding land.

The Gilberts bought a 21-percent share, costing $22,400 after the federal tax credit. Based on their home’s power consumption, Gilbert expects the investment to pay for itself within 12 years.

“As long as the Public Utilities Commission doesn’t mess with net metering too much, we figure it’s an excellent investment,” she said.

ReVision, which did the Edgecomb project, also has been a pioneer in financial arrangements in which non-profit institutions that can’t make use of the 30 percent tax credit still can harvest the sun’s energy. Called “power purchase agreements,” these arrangements are becoming more popular at schools and churches in Maine, and are being created on larger scales.

Power purchase agreements come in various forms. Determined to use the south-facing roof of their church, Deb McDonough’s family took out a home equity loan and set up a limited liability corporation. The power deal let her tap federal tax credits to help put solar-electric panels on the non-profit St. Ansgar Lutheran Church in Portland, in 2014. Beyond cutting the congregation’s electric bill, the panels make a statement. “They say publicly that the environment and the earth are important to us,” she said.

In another example, the Friends School of Portland opened a new building in Cumberland last year that meets the rigorous Passive House certification standard for ultralow energy use. It was first such school in Maine.

But what makes the school net zero is a partnership between ReVision Energy, the school and the nearby OceanView at Falmouth retirement community. OceanView paid for a 114-panel solar array that will generate 100 percent of the school’s power needs on an annual basis. ReVision installed it. OceanView takes the tax credit and the school will get the cost and environmental benefits of the solar electricity. The power purchase agreement also provides an option for the Friends School to own the system after seven years.

The quest for solar net zero is limited by one reality— unless it can be stored, electricity must be used when it’s generated. So for now, the vast majority of solar homes remain connected to the grid, so they can have power at night and on cloudy days. Advances in battery technology may change that in the years ahead.

There’s plenty of buzz these days about the Powerwall, a lithium-ion battery for home use made by electric car startup Tesla. Early versions, which cost $3,500 for a 10-kilowatt unit, minus installation, are being bought for homes and businesses with solar panels. Powerwall can run some lights and appliances in the morning and evening when the sun’s not shining. In areas where utilities have time-of-use rates, Powerwall can kick in during the hours when power is most expensive.

While Tesla grabs international headlines, a Maine-made partnership is making inroads in the solar battery storage space. ReVision is working with Westbrook-based Pika Energy to offer the Pika Energy Island. It’s a solar electric system connected to batteries through a Pika inverter. The inverter functions even when the grid goes down, to convert the solar panels’ DC current into AC, for home use.

The Pika Energy Island is best suited now for back-up power during a blackout, according to Chip Means, the company’s director of sales development. The system has the capacity to run critical loads, such as lights, heating systems and refrigerators. For a comparable investment, roughly $10,000, it can take the place of a gas generator, while eliminating the fuel and maintenance costs.

But the solar panels also can play a daily role. During a sunny day, they charge the battery instead of exporting power to the grid. At night, that stored power can help run lights and other loads.

At ReVision, Coupe said some customers installing solar today want to be in a position to have advanced battery storage in the future, as it evolves.

“We’re not in a big hurry to disconnect our customers from the utility grid,” Coupe said. “But battery storage is part of the long term transition. We are having the conversation. People ask about storage. We say, ‘It’s coming.’ ’’

More on this topic:
Net metering and the state of solar policy in Maine
Is solar right for your home?