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Is solar power for you?

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Things to know before switching

By Martin Salazar

Solar power has been around for decades, but until recently most area residents have seen it as a novelty rather than a real option for their own homes and businesses.

That view has changed in recent years with Renewable Energy Credits, or RECs, and tax credits currently being offered that make converting to solar energy more affordable.

“The recent price drop of solar modules combined with tax credits and Renewable Energy Credits makes now the best time ever to go solar,” says Ben Remmers, an employee of Energy Concepts, a local company that installs solar photovoltaic systems. “In the Las Vegas area, PNM is the only utility that pays the customer for RECs... This means that PNM pays you ... for you to use the clean solar electricity generated on your south-facing roof.”

Remmers says a properly designed and installed solar photovoltaic system can make all the electricity needed in a building, meaning no more electric bill and even the electric utility sending a customer a check instead of a bill.
If you’re thinking about turning to solar energy, Remmers says there are a few things you should know.

Types of systems available:
• Grid-tie: Solar energy generated supplies your needs, and the extra energy goes onto the grid. It’s a lot cheaper than most other system and makes up most of Energy Concepts’ new business. With this type of system, if PNM loses power, you would also lose power.

• Hybrid grid-tie with backup: It runs as a grid-tie system most of the time but does have a battery backup that allows you to store energy for later use.

• Off-grid system: As the name implies, this is a stand-alone system where large battery banks are installed to enable you to have energy even when the sun isn’t shining. Because large battery banks are installed, this is a costlier system

• Solar water pumping system: One of the simplest ways to use solar, providing energy to a pump.

Incentives available
The federal government is offering tax credits of 30 percent while the state is offering tax credits of 10 percent of the total installed cost. The tax credits are available at least through the end of the year. Remmers adds that customers can opt to stop income tax withholdings on their paychecks once they’ve had a system installed.

The other incentive is the utility Renewable Energy Credits being offered by PNM, which currently stands at 5 cents per kilowatt hour plus net metering.

Net metering means that when you generate more than what you need, you build up a credit. With the Renewable Energy Credit, PNM pays a customer for every kilowatt they generate, including the energy they generate for themselves. The amount of the Renewable Energy Credit has been going down and will likely continue to decrease as more customers turn to solar power. But customers lock into a specific credit for eight years when they install their system.

The Mora-San Miguel Electric Co-op offers net metering but doesn’t offer Renewable Energy Credits.

How much does it cost
to convert to solar?

It depends on how much power is needed. Energy Concepts looks at a year’s worth of utility bills and designs a system based on that usage. Residential customers can expect to pay $15,000 to $45,000 to convert to solar, Remmers says. But that amount is offset by available credits.

How long will it take for the system to pay for itself?

PNM customers can expect a six- to nine-year payback. Mora-San Miguel Electric Co-op customers can expect a nine-to-12-year payback. Remmers says the return on investment is about 10 to 15 percent. To calculate the payback time, Remmers looks at the monthly energy bills that will either decrease significantly or be eliminated, at the income tax credits and the renewable energy credits available. All that offsets the amount a customer will initially spend on converting to solar energy. Even when a customer takes out a loan to pay for the conversion, Remmers says, the loan payment is often less or comparable to the customer’s electric bill, so it’s a net-positive situation.

How long will solar panels last?
Remmers says the life expectancy of the solar panels is 30 to 50 years. The ones Energy Concepts uses come with a 25-year warranty. Solar panels need little or no maintenance and have no moving parts, which is one of the biggest positives, Remmers says. Customers will likely have to replace the system inverter once.