TPUD to dim solar power incentive

Don Mulvey of Mulvey’s Electric Alternative Energy in Hayfork has a more sunny view of payback from solar installation than Trinity Public Utilities District officials. PHIL NELSON | THE TRINITY JOURNAL A handful of Trinity County residences have gone solar in the last year, thanks in part to a solar power incentive payment from the Trinity Public Utilities District that is the highest in the state.

Today the utility district board will reconsider the largesse, which came about more in self-defense than out of a desire to fund solar power in Trinity County.

Under SB 107 passed in 2006, all utilities in California are required to offer an incentive payment to customers installing solar power, but at $4.30 per installed watt, the TPUD is well over the state’s minimum requirement which is now $2.09 and declining each year. The incentive decreases on the theory that new technology it has spurred will reduce costs of a system to a point where a subsidy is not needed.

The higher TPUD incentive was set out of concern that this mountainous and forested area would not achieve state-set goals for incentive payments and installations, leading to more ill-fitting laws, TPUD General Manager Rick Coleman said.

“A higher incentive was chosen to be able to demonstrate that the district is being more than cooperative in this matter, despite the ‘poor’ results,” Coleman stated in background materials to the board.

At this point the district has paid out $111,000 for five installations, and it is ahead of the state’s schedule for money expended but behind as far as the installed capacity goal. It’s time to revisit the issue, according to Coleman, before solar installations increase to the point that the program will have to be funded with a general rate increase or a solar surcharge for all TPUD customers.

At the meeting today (Jan. 20), scheduled for 2 p m. at the TPUD community room, TPUD directors are to consider Coleman’s recommendation to lower the payment to $3.14 per installed watt and decreasing by 22 cents a year — which will keep it above the state’s mandate, also dropping, until matching it just before SB 107 requirements expire.

In an interview, Coleman said he is a proponent of development of solar power in areas where there is more sunshine and it makes sense. But for the TPUD the state mandate amounts to subsidizing solar systems which in turn will reduce district revenue from power sales.

“Think of the fallacy of this thing,” he said.

Unlike most utilities, TPUD cannot legally turn around and sell the energy the solar systems displace, he added.

The solar power users in this program are not off the grid — they can use power they produce to offset their TPUD bills, or, when they generate more than they use, it can be applied for credit over the next year.

It’s not such a bad deal for utilities that pay a lot for their power, but the TPUD purchases low-cost hydroelectric power and its main cost is not for the power itself but costs of the distribution system, Coleman said.

“If enough customers install solar cells, the district would be required to raise rates or change its rate structure to include a monthly fee, regardless of consumption, in order to recover enough revenue to acquire, construct and maintain the distribution facilities,” he said.

From the perspective of the solar/TPUD customer, Coleman doesn’t think the program pencils out very well, either. With the state’s minimum incentive payment, even for solar customers getting the maximum tax credits the payback in reduced electricity bills in TPUD’s territory would take 30 to 60 years, he said. Coleman estimates that in an area with more sunshine where electricity rates are higher — such as the Mojave Desert in PG&E territory — payback would take three to five years.

From Hayfork, Don Mulvey of Mulvey’s Electric Alternative Energy has a different perspective, although he’s not surprised to see the TPUD incentive drop and agreed, “They were the highest in the state.”

Mulvey has installed four systems under the TPUD program so far, including systems at his home and business put in over the summer. He is preparing to work on two more.

Although he has one potential customer who has said he won’t have a system installed if the TPUD incentive decreases, Mulvey believes others will forge ahead. His payback estimates are more favorable than Coleman’s.

He noted that last year when the TPUD credit was at its highest he had one customer paying only $1,400 out of pocket when a large tax credit was also factored in.

“In just over a year with the savings on his power bill he was going to have his money back,” Mulvey said, adding that even at the state minimum incentive payment, anyone should be able to pay off their costs through reduced energy bills in five years or less.

A 6,000 watt system costs around $45,000 for equipment, installation, permits and other costs, he said.

“It’s an evolving thing,” Mulvey said, noting that although the incentives are dropping, the cost to put in a system is dropping as well, and solar panel prices have already gone down since he put in his systems.