The sun’s within reach

Incentives help offset cost of solar water, electric systems

By Toby Van Fleet

Pamplin Media Group, Sep 11, 2007, Updated Oct 30, 2009

L.E. BASKOW / PAMPLIN MEDIA GROUP

After Elisa and Dan Mohrmann refinanced their North Mississippi-area home, they had money to invest in a solar water-heating system. Then they got money back in credits, energy savings and other incentives.

Within earshot of business-dense North Mississippi Avenue, one block on the quieter North Albina Avenue is a mishmash of blooming gardens, overgrown lawns, brightly painted houses, old cars and one unassuming solar panel.

That panel, perhaps a sign of things to come in Portland, shines on the south-facing roof slope of the home of Dan and Elisa Mohrmann.

“We’re not total ‘eco’ kind of people,” says Elisa Mohrmann, the mother of six girls who admits that she practices organic gardening, home-schools her children and recycles. Solar, she says, “just kind of slid in there with our other kinda offbeat lifestyle.”

Last summer, the family was at the Mississippi Street Fair when they stopped by a booth set up by a solar contractor.

“It’s something that we’d read about, even thought about and talked about a little bit,” she says.

Having just refinanced their century-old home, which they bought seven years ago before housing prices in the area exploded, the single-income family – Dan Mohrmann is a roofer – found themselves in a position to explore their options.

“If we hadn’t had the money right at that point in time, it wouldn’t have even been something we would have considered,” Elisa Mohrmann says, explaining that they could not have afforded the upfront cost of a system.

They decided to install a solar water-heating system. And of the $8,000 they spent, they received $5,120 back in incentives and tax credits. “It’s not about the carbon footprint sort of thing,” she says. “It really was the financial benefit.”

In fact, many Portlanders are finding that a solar hot-water system is an accessible first step into solar power.

“There’s less upfront cost for the homeowner so the initial investment is smaller,” says Kacia Brockman, solar program manager at Energy Trust of Oregon, which paid a $1,120 incentive to the Mohrmanns. “And the amount of energy savings you get per dollar invested is higher for a solar water heater than it is for solar electric.”

By “solar electric,” Brockman means a photovoltaic system, often referred to as “PV,” which actually generates the electricity that you would otherwise buy from a utility.

A solar water-heating system – like the one the Mohrmanns installed – does not generate electricity. Instead, it uses solar power to heat up a glycol solution similar to antifreeze, which is then circulated in pipes around a special water tank. The hot water from that tank then feeds into the regular water heater and eventually to the tap.

“That’s where you get the biggest bang for the dollar,” says Andrew Koyaanisqatsi of Solar Energy Solutions Inc., who installed the Mohrmanns’ system. He’s been installing solar systems in Portland since 1987.

He says that in many ways, a solar hot-water system is best suited for larger families like the Mohrmanns, “because the more hot water you use, the greater benefit you’re going to have.”

Credits add up

Unlike the Mohrmanns, John Paddock owns a newer house in the Roseway neighborhood, with a long strip of south-facing rooftop that sits in full sun.

As he worked up a sweat while building a deck in his backyard, it dawned on him: The same sunlight beating down on him could be harnessed to provide his house with power.

He says he was motivated by a variety of reasons, including the impact on the environment, the incentives that would lower the cost, and a desire to be more self-sufficient.

“It was a lot of little things,” he says, adding that solar panels are pretty cool. “You put a panel on your house, and you get electricity,” he says.

Paddock, a 39-year-old UPS driver, bought the house, then new, with his girlfriend, Emily Cornett, two years ago.

He did some research online and received information about solar contractors in the mail from Portland’s Office of Sustainable Development.

Earlier this year, Portland was awarded $200,000 from the U.S. Department of Energy’s Solar America Initiative. The city has pledged to spend that money to help Portlanders integrate solar technology into their homes and businesses.

The city’s Office of Sustainable Development offers classes and workshops on solar energy in conjunction with the Energy Trust and Solar Oregon, a nonprofit focused on outreach and education about solar power.

But Paddock didn’t take any classes. After visits from two different contractors, Paddock chose Mr. Sun Solar to install a 2-kilowatt photovoltaic system. The city of Portland says that a 3-kilowatt system could meet about a quarter of the electricity needs in an average Oregon home over the course of a year.

The Energy Trust says the typical PV system being installed right now is just under 3 kilowatts.

Paddock says the size of his system was partly due to the number of panels his roof would accommodate and partly due to finances. He funded the panel purchase and installation with a home equity loan.

“Fifteen thousand dolllars. That’s all I could afford at the time,” Paddock says. In fact, Paddock’s system cost close to $19,000, but he got about $4,000 back right away.

Like the Mohrmanns, Paddock is cashing in on the three incentives currently available in Oregon: a federal tax credit, a state tax credit and the Energy Trust incentive.

Although he’s getting back $12,080, so far he has benefited only from the $4,080 from the Energy Trust.

He’ll get a $2,000 federal tax credit and a $1,500 state tax credit when he files next year, and then will receive $1,500 from the state each year for another three years.

In the meantime, he’ll be paying off the home equity loan he took out to cover his upfront cost.

One panel can cost $9,000

Koyaanisqatsi acknowledges that many people “are looking for that sweet spot” that the three incentives together can provide, but that’s not the only consideration.

“Most of my clients are looking to actually have a greater impact on their resource impact than a 2-kilowatt system affords,” says Koyaanisqatsi, who says he installs a lot of larger systems, such as 3 or 6 kilowatts, which require a much higher upfront investment since each 1-kilowatt panel costs about $9,000 before incentives.

But his client base represents only a small percentage of those who call him every day about the possibility of solar.

“Everybody wants to go solar,” Koyaanisqatsi says. “But then when the harsh realities of the cost and the roof and the solar access are presented, I’d say a large percentage actually don’t end up doing anything.”

Before becoming his clients, the Mohrmanns had envisioned a larger, more comprehensive solar system that could meet more of their power needs. But because their roof is partially shaded by neighbors’ trees, Koyaanisqatsi recommended they go with a hot water system.

Still, he says, “there are a gazillion houses with great solar exposure.”

Koyaanisqatsi claims his business has tripled in the last two years after a 15-year plateau, and says his clients span the income spectrum. His experience echoes the spike in interest in solar reported by the city, the Energy Trust and the Oregon Department of Energy, which handles the state tax credits.

The spike in demand likely will lead to the price of solar dropping as the market develops, but Koyaanisqatsi believes that cost alone is not what holds people back.

“People that look like they’re living hand-to-mouth are installing solar systems,” he says.

“I think the biggest challenge with solar is not price,” he continues. “I think the biggest challenge with solar is getting the word out that it works here in Portland and that there are incentives.”

Return’s more than tax boon

Solar proponents claim that the payback goes beyond the incentives or the bottom line on a utility bill. Koyaanisqatsi calls the switch to solar a solid investment, with a value that will only increase as energy prices go up.

And then there’s the added value to the home. The Energy Trust’s Brockman says that when people are looking for payback, they should look at a solar installation the same way they look at a bathroom or kitchen remodel.

“Most of my clients aren’t in it for a simple payback. They’re thinking about other economic advantages,” Koyaanisqatsi says.

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