Ed Bajorek is a bottom-line guy. So it wasn’t the feel-good aspects that prompted him to spend serious money for a rooftop solar installation at his appliance and cabinet shop.
“I look at everything long-term,” said Bajorek, owner of K&N Builder Sales. “I suspect in the winter, we won’t have any electric bill. Now is the time to do it, because business is good right now.”
Wind continues to dominate the discussion of renewable energy in Texas, reaching 32.6 million megawatt- hours in 2012, more than in any other state.
Solar power makes up just a sliver of the renewable power flowing to the Texas electric grid, but it had the largest rate of growth last year, increasing by 265 percent to 133,642 megawatt- hours, according to the Electric Reliability Council of Texas. That count only includes commercial-scale solar installations, not the rooftop solar panels installed for residential use.
Energy Secretary Ernest Moniz said last month that he expects solar energy to be “a lot bigger than most people think, sooner than they think.”
And an analysis by the NPD Group predicts demand for solar photovoltaic panels in the U.S. will grow by 20 percent this year.
Demand is greatest in California, Arizona, New Jersey and North Carolina. But Texas ranked No. 9 in the nation for solar growth in 2012, according to a study by GTM Research.
No local incentives in Houston
The wide skies of Texas provide plenty of raw material for solar energy, but the state offers none of the tax breaks or other incentives credited with spurring growth elsewhere.
City-owned utilities in San Antonio and Austin offer rebates, as does at least one company operating in the North Texas utility market. No rebates are available in the Houston area.
There is a 30 percent federal tax break.
But Bajorek said that wasn’t a major factor in taking the $117,000 plunge to install solar panels atop his business.
“If I get some money back next year, good,” he said. “But what it’s going to cost me now, that’s all I care about.”
He expects when the installation is complete, it will cover most of his electric costs and prove an especially good deal if electric rates rise.
Wind energy jumped ahead of solar in Texas partly because it’s easier to do large installations for utility projects, said Jennifer Ronk, senior research scientist at the Houston Advanced Research Center. “It’s more cost-competitive at that large utility scale.”
But even in Texas, there are a few larger solar projects, including the Webberville Solar Farm in Manor, a 35-megawatt project with a long-term contract to sell energy to Austin’s city-owned utility.
Large solar projects, along with the wind projects that are far more common here, qualify for the federal Production Tax Credit, renewed as part of last-minute negotiations in Congress to avert the Jan. 1 tax increases and spending cuts known as the fiscal cliff.
Critics say the credit gives renewables an unfair advantage over conventional forms of electric generation. It provides a 2.2-cent tax break for every kilowatt-hour of energy produced during the first 10 years of operation.
“That discourages people from building new (generating) plants because, whenever the wind blows, they get kicked off the grid,” said Josiah Neeley, a policy analyst for the Texas Public Policy Foundation. “They’re not getting the tax credit, so they can’t compete with the (renewable energy) prices.”
“If wind or solar can compete on the open market, and people want to do that, that’s fine,” he said. “They just shouldn’t be getting subsidies from the government.”
‘The fuel is free’
Solar has remained mostly a residential phenomenon in Texas, despite a few large commercial projects, including the Ikea store on Interstate 10 near West Loop 610in Houston, which last year installed 3,388 rooftop solar panels.
CenterPoint Energy spokeswoman Leticia Lowe said 92 percent of its customers with a renewable energy installation are residential.
Jimmy and Barbara Hemphill are using complementary electric technologies and design for the house they are building in Humble.
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It will have geothermal air conditioning and heating and is situated on the lot so the solar panels are best positioned to catch the sun’s rays. Windows and sliding doors on the north and south sides of the house can be opened to the breeze when humidity is low.
The windows are double-paned, and the walls are heavily insulated.
Because the house is new, Jimmy Hemphill said, they don’t know how much of their electric use the 26 solar panels will provide; they can add more if needed.
“Our goal would be to end up net zero, where we don’t buy any electricity,” he said.
Hemphill said the system cost $24,390. How long it takes to pay for itself will depend, in part, on the price of electricity.
Cal Morton, an executive at Texas Solar Outfitters, said that sort of thinking is drawing more people to solar.
“It’s not a tree-hugging enterprise,” he said. “It’s people who know we have a limited electric grid capacity. With solar, you’re pre-paying your electric bill for 30 years, and you’re locking in that cost, because the fuel is free.”
Most panels are guaranteed for 25 years, but Morton said they often last longer.
Tree-hugger or not, the up-front cost has been a deterrent for many people, and solar’s largest gains have been in San Antonio and Austin, where city-owned utility systems offer rebates to customers who install solar panels. Oncor, an electric transmission and distribution company in North Texas, also has an incentive program.
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The theory is that people who generate their own electricity can offset the need to build more expensive generating plants.
No Houston-area companies offer rebates, although some utilities let customers sell back electricity generated by rooftop panels.
Morton said a residential system can cost $12,000 to $50,000 before the federal tax break.
Helen Brauner, senior vice president for marketing and strategic planning at Green Mountain Energy, said the average solar array on a Texas home is about 5 kilowatts — enough to cover roughly half the household’s energy needs. A system that size typically costs $12,000 to $15,000, she said.
Brauner said many Green Mountain customers are drawn to solar as a way to reduce greenhouse gas emissions.
But Morton said the financial arguments are a lure for others.
“When I was a stockbroker, the challenge was getting consistent returns off the stock market,” he said, referring to his previous career. “With this, I just need the sun to rise.”