Solar in WA? Yes, and lots of it

Lately, it seems like it’s all Washington State renewable news, all the time. A slew of recently passed policies have the potential to dramatically increase solar energy’s presence in the State:

• Solar manufacturing tax incentive increase
• Production incentive cap raised; community solar now eligible
• Exemption of renewable sales and use tax
• Homeowner’s associations can’t prohibit the installation of PV panels

I admit; I’m envious.

I called Heather Mulligan, an old friend and current Market Manager for PSE’s Green Power program, to ask how these new solar policies would affect their current renewable energy programs.

“We’ve been busy,” said Mulligan.” “Solar is certainly starting to pick up.”

This from a state with robust wind and hydropower resources.

PSE’s updated IRP confirms its long-standing goal to develop more renewable energy resources, primarily wind power. “Wind has been our first play for providing utility-scale renewables to the portfolio,” said Andy Wappler, PSE’s public relations manager for energy resources.

PSE’s Hopkins Ridge Wind Facility, in Southeast Washington, and Wild Horse Wind Facility, in Central Washington, are the top utility producers of wind power in the Northwest. The wind facilities’ 386 megawatts of generating capacity is enough to serve 100,000 homes.

“We’ve got a much better situation with wind than most communities,” said Wappler, “because we’re able to hook wind into our existing hydro-based grid. Hydro is a good way to follow wind. It’s a challenge, but a doable challenge, as opposed to a show stopper for renewable energy, as transmission is sometimes presented in the national media.”

In addition, PSE installed a 450 kW photovoltaic installation at their Wild Horse Wind Farm in late 2007. Another 50 kW will be added to the site by Silicon Energy, a Washington State manufacturer of solar panels.

Solar is a player in Washington State’s renewable economy. In fact, Washington State has as much, if not more solar capacity than Germany, the country with the most installed solar.

“The demand for solar comes from our customer base,” said Tom MacLean, Manager of PSE’s customer renewable energy programs, “which is a very green customer base. Any kind of renewable energy on the grid is favorable with our customers.”

Not only is the number of solar installations on the rise, but the system size is also increasing.

“I remember back in the early Million Solar Roofs days when we planned for 500W systems,” laughed Mulligan. “In fact, we wondered who’d be installing 1kW systems. Now, we’re seeing about 4kW size systems for residential applications.”

“It’s interesting,” said Jake Wade, Program Manager for Net and Production Metering, “that despite the current economic environment, we’re seeing more installations this year than last. Last year, our customers installed 117 PV systems. This year, we’ve already seen 100 systems installed, bringing our total number of net metered customers to 426. We expect to see another 100-plus systems installed for the second half of this year. It’s reasonable to assume that the increase can be attributed to last year’s passage of the federal tax credit. But if you look at the provisions in SB 6170, like the 100% sales and use tax exemption for solar energy systems under 10kW, and the production incentive increase from $2,000 to $5,000/year, we’re expecting an even larger boost in the number of installed systems for 2009.”

As expected, the commercial sector is lagging behind the residential market.

“We’ve talked with several companies about going solar,” said Wade, “but it’s a hard sell for them here; our rates are low. One of the big box stores headquartered in Washington State has indicated they love solar, think it’s great, and they’ll probably solarize their stores…starting with their California ones. It’s hard to argue with them; California’s Solar Initiative has a $2B budget and offers attractive, direct incentives to consumers for PV.”

That doesn’t intimidate PSE. Now that community solar projects are able to receive the production incentive, PSE believes those projects will help solar keep a high profile in Washington State.

Community solar projects are solar energy systems owned by local entities and placed on local government property, or owned by utilities and funded voluntarily by utility customers.

“Last year, Sakai Intermediate School on Bainbridge Island received a grant from PSE’s Solar Schools Program for 1.1kW, which was then expanded to include community participation,” said Micah Haman, Program Manager for PSE’s Solar Schools Program. “In fact, Bainbridge was the first community where PSE kicked in $25K for the project, and the enthusiastic community raised $30K for a larger system. They installed a 5.1kW system for Phase 1. The system is pre-wired for a total of 15kW. A future phase only requires panels and an inverter.”

Vashon Island, south of Bainbridge Island, also received PSE funding for community solar on the island. Mulligan awarded $20K to The Solar Initiative, a project of Sustainable Vashon, for solar on the Land Trust Building and Vashon HouseHold’s Charter House apartments.

Like MacLean said: the demand for solar comes from PSE’s customer base. In fact, Vashon Island has the highest percentage of participants per capita in PSE’s Green Power Program where customers pay an additional amount to fund alternative energy projects. At seven percent, Vashon’s participation in the Green Power Program is more than three times that of other communities.

“We’ve got lots of unique communities in our service territory,” said Mulligan, “and we’ve been encouraging them to think about community solar. Right now, there are three to four communities in PSE’s electric service area that are looking into community solar projects in light of the new legislation, including Vashon and Bainbridge Island.

Under SB 6170, community solar projects will now receive Washington’s production incentive for renewables; the base rate is set at $0.30/kWh. But the actual incentive may be higher, ranging from $0.30/kWh to $1.08/kWh, as the incentive rate increases for modules and inverters manufactured in Washington. Individual participants in a community solar project are also eligible for the production incentive, up to a cap of $5,000 per participant. A very sweet deal.

“The availability of Washington-made equipment will make for a very busy year due to the increased incentive payments” said Jake. “Right now, Washington State is unique in offering a different tiers of performance-based incentive payments. We are really looking forward to Washington-made modules coming into the market.”

SB 6170 also includes utility-owned community solar projects. “This will take utilities longer to put this into place than the community-owned model because it’s more complicated,” said Mulligan. “Utilities want to offer this because they know their customers want different options to participate.”

PSE and Seattle City Light recently offered solar code training for building inspectors, code officials, Labor and Industry to prepare them for the expected increase in solar installations. According to Mulligan, some 120 took the three-day training, taught by Bill Brooks.

On the horizon, PSE is preparing internally for the growth in customer-generated renewables. “We’re also working to make our net metering process as customer- friendly as possible,” said Jake Wade.

PSE already has wireless meter reading. “It’s interesting to get requests for the new meters,” said Wade. “For the longest time, consumers felt meters were an eyesore. Now the want to know if they can have their meter next to the front door for all to see.”

Mulligan smiles. “It’s fun to see where the Washington market is going.”

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