Local solar installers expect surge
By Doug LeDuc | Greater Fort Wayne Business Weekly
Solar panel installers in northeast Indiana are prepping for a surge in business this year from customers who want to get systems installed while they can still get the best return on their investments given a new state law.
Senate Bill 309 requires power companies operating in Indiana to pay customers retail prices for 30 years for electricity generated through renewable power systems installed before 2018.
Owners of systems installed after the end of this year but before 2022 will have this kind of net metering pricing in place for their excess power for 10 years beyond 2022.
Owners of systems installed after 2022 will not have net metering but will be paid the much lower wholesale price, plus a 25 percent premium for electricity they sell to a power company operating in Indiana.
Eric Hesher, owner of Renewable Energy Systems in Avilla, believes awareness of the new law’s impact in the state is mostly limited to residents who follow its legislation and renewable energy issues, he said.
Some of these residents can be expected to move solar projects they were planning forward to this year to get the 30 years of net metering, and awareness of the legislation’s impact is likely to increase, which also could boost solar panel business in the area.
Renewable Energy Systems is preparing for a rush it anticipates later this year by working overtime now to prevent or minimize any project backlogs, Hesher said.
Even without the new law, as a result of lower prices and advances in solar technology and panel production processes, the company is seeing increased interest in installation.
“We have had a record number of phone calls and a record number of quotes, and we are going to be very busy this year,” he said. “We want to make sure we don’t fall too far behind.”
With the change in net metering on the near horizon, “we know a lot of people are going to wait to the last minute to call us,” he said.
“We want to install as many systems as we can because we want as many people as possible to get the 30-year net metering,” he said.
Prices on solar panel systems have fallen to less than half of what they were 10 years ago but they still are a significant investment, Hesher said. A typical residential system will pay itself off within nine to 10 years with net metering, and then the system will continue to save owners money on electricity they would have had to buy from a power company, he said.
Installation can take four to six weeks for residential projects, including making the arrangements with a power company, and several months for larger commercial projects, he said.
A 30-percent income tax rebate on the systems is available from the federal government, and for commercial systems a 50 percent depreciation bonus also is available this year.
With the federal tax incentives reducing their cost, Mark Brough, owner of SunWalk Solar, said it has installed area systems that immediately increased the value of a commercial building by more than the amount of the investment.
A surge in solar panel installations by customers interested in getting the 30-year net metering probably has started and is likely to grow as installers get further into the year, he said.
“I expect I am experiencing it right now and that people will wait until the last minute,” Brough said.
Longer daylight hours and higher electric bills to pay for summer air conditioning tend to turn thoughts toward residential solar systems.
“It’s usually late June when the phone starts ringing, and then July and August when people start panicking,” he said.
Indiana does not have any state law limiting the effect on solar installation of restrictive covenants from neighborhood to neighborhood, and compliance can add to the time required for a residential project.
It is not uncommon for a home owners’ association to require review and approval of architectural plans for a solar panel project before its installation can take place, Brough said.
For the paperwork processing required to get a residential solar panel system installed and the net metering working, a project would need to begin by the middle of November at the latest in order to have it completed by the end of this year, he said.
The Indiana Distributed Energy Alliance expects the Indiana Utility Regulatory Commission to hold a technical conference to soon to clarify exactly how much of a renewable energy installation must be completed this year in order for it to qualify for the 30-year net metering.
“The legislation is not very clear with what has to be done for a customer by that time,” said Laura Arnold, president of the alliance. “Everybody in the industry, all the electric utilities and all the solar groups will be very interested in this conference.”
Some community group campaigns have sprung up to increase awareness of the net metering changes that are coming and the advantages of installing solar systems this year.
“There are groups all over the state right now trying to figure out how to put installers and customers together to beat this deadline. It’s very very fluid right now,” Arnold said.
In 2016 prices, the average wholesale rate for power in Indiana was 3.5 cents per kilowatt hour, and a 25 percent premium would have brought that close to 4.4 cents per KWH. The average retail price for power was 11 cents per KWH.