Like many of you I have been following the rapid decline in price of photovoltaics (PV) over the last few years. This has galvanized the PV market in many states with tax incentives and high electricity rates. Now that Kansas has net metering and both Westar and KCPL have raised rates considerably, a nascent market has begun gaining momentum in the Sunflower state.
At the capitol in Topeka, these two utilities have attempted this year to roll back the net metering standards so I dusted off my notes from the net metering fight of a decade ago and started exchanging e-mail with folks and was heartened to see a coalition of sorts forming to fight to keep this important solar incentive. The net metering fight is another story you can follow in our legislative updates. This article takes a slightly different turn.
As I took part in this informal ListServe of net metering supporters one piece of information really jumped out at me. We can now put solar PV on our house and eliminate our electric bill with zero out of pocket expense and no maintenance costs. Whoa. My first thought was, “The fellas over at Westar and KCPL probably looked like they were sucking lemons when they found this out. Solar leasing has not occurred in a state that does not have any state incentives-but it does now through Cromwell Solar.
So I journeyed to Lawrence to interview Aron Cromwell, former mayor of Lawrence, and owner of Cromwell Solar to have him explain this in further detail and talk about where things stand in general with regards to solar in the heartland now and in the near future.
BG (Bill Griffith): Aron, can you give me your background and how long your company has been in business?
AC (Aron Cromwell): I have a Bachelor of Science with a concentration in Ecology from the University of Kansas and a Masters Degree in Civil and Environmental Engineering from Michigan Tech. I am a NABCEP certified solar installer and before that spent several years building Energy Star homes. I have also been mayor and a member of the city council and am proud of helping Lawrence get curb-side recycling. In 2000 I bought out an environmental service company and re-oriented it more towards solar, although at that time we concentrated more on solar hot water, as that was more economical at the time.
BG: Describe Cromwell Solar’s growth.
AC: In 2009 we only had 5 full-time employees and by 2011 we were up to over 20 and this was due to the sharp drop in the price of PV panels. No one really saw how quickly the price of the panels would plummet.
BG: While Kansas does not have any state tax credits there is a federal tax cred for solar, please describe it.
AC: There is a 30 percent federal tax credit good through the year 2016. That is significant and add net metering on top of it makes it even more intriguing in Kansas.
BG: On top of that you have an exciting new lease program, how does it work?
AC: The bank we use actually purchases the system, receives the federal tax credit and can depreciate the equipment and the homeowner or business leases the solar array at zero money down and the lease payment is guaranteed to be up to 20 percent less than what the electric bill was. Also, the bank takes care of any maintenance and the installation costs as well. The lease is 15 years and at the end of the lease the homeowner can buy the system at a very nominal cost and enjoy free electricity from that point forward.
BG: So folks can immediately get rid of dirty electricity that is contributing to global warming and save money each month plus add value to their home?
BG. That is absolutely amazing to me. This really breaks open the market in your service area.
AC. It does, in fact, we are looking to expand to Topeka and Manhattan as well as continuing our presence in Lawrence and the Kansas City area.
BG: Can you go over the permitting process that is needed?
AC: It varies in each city or town but a week to a month are normal wait times we see. As cities see more of us the permit costs and approval time both seem to be improving.
BG: How long does it take from the time you analyze a home and the owner gives the green light until they have their new solar installation?
AC: 2-3 months basically waiting on permits and the paperwork and inspection by the utility.
BG: Some of our audience are interested in electric cars. Let’s say they get a PV installation and then in the future acquire an electric car and it adds to their electric load. Can you come back out and add some panels? Sure, we would size the load and make a recommendation-it would not take long to make the addition.
BG: As we speak, there is an attempt by Westar, with KCPL’s tacit agreement, to roll back the net metering statute in Kansas, what would be the effect of this on the state’s solar industry?
AC: We would size systems to be smaller rather than to push clean energy back out on the grid. It would also stop growth and maybe contract it a little bit in the state. So some jobs would be lost. On the other hand if we win this battle we are looking at 100s of new jobs in the state and we have two vocational colleges wanting to train solar installers.
BG. I was at a utility conference in Chicago a couple of years ago and could sense the unease within the industry. Do you see a paradigm shift within the utility industry or just changes around the edges?
AC: Absolutely. They are at a crossroads and really need a different model than the one created 70 years ago.
BG: Any advice for the utilities on how to work with your industry?
AC: They are going to have to work with the solar industry. As you mentioned there is a paradigm shift and we need to discuss how to move from a centralized power model to more of a distributed system. They have an opportunity to help shape this rather than just oppose it.