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Richmond Solar Farm is a Smart Investment

 
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Richmond Solar Farm
Photo credit: Jeff Forward

Source: Katie Emerson - VECAN

In 2011, Jeff Forward sought an investment vehicle that would provide a reasonable rate of return and his home appeared an attractive site for solar. It is an old farmstead with plenty of unproductive, open space and it happens to have a transmission line in the backyard. To begin the project, he penciled out the costs of installing a residential system; however, the set up numbers didn't quite add up in his favor. Being conscious of energy consumption, he had already done a lot to reduce his home’s energy use. So, a typical 4 kW residential system would produce more electricity than his home needed. And after some research, he also figured out that the tax incentives for solar favored commercial installations.

Forward was in a unique position to undertake this project. With years of professional expertise as an energy consultant, he had an understanding of how he might make it work. Since his energy consultant firm is an out-of home business, Forward looked into making his solar project commercial, instead of residential. He decided he could do this if he formed a group with his neighbors, built a larger system and received an income by “selling” them the solar credits from that systems output. This change of approach allowed him to take advantage of federal tax incentives and provided him with an excellent return on investment. Forward engaged his neighbors and easily got three neighboring households onboard. In fact, Forward could have potentially advertised for group members anywhere within his utility’s service territory—the distance from the array isn’t a restriction. 

They installed a 13 kW system on eight ground-mounted poles. The system is producing about 15,000 kW hours each year. While Forward provided the total upfront investment, his neighbors pay him the solar credit that is attributed to their electric bills. His neighbors aren’t necessarily saving money in this ‘group net metering’ agreement, but the project hasn’t cost them anything either. Their main incentive for being involved in a project like this is that their energy is coming from a local, renewable source. 

In 2012, Forward expanded his project, nearly doubling it to a 25 kW array, powering two more homes and providing clean, affordable electricity to six homes in total. 

KEYS TO SUCCESS 

  • Solar PV is as much about tax incentives as it is about energy. Do your research. There are a variety of tax incentives, both from state and federal government sources. They can involve a lot of documentation, and meeting strict deadlines, so knowing in advance what these incentive programs require is important.
  • Solar is a good investment and getting better all the time. The cost of panels, one of the biggest costs of a system has come down by 50% over the last year alone.
  • Group net metering provides an opportunity for small investors to invest in something they believe in while still providing an attractive rate of return.


For more details on the specific financial aspects view a longer report in VECAN’s solar toolbox.

VECAN Full Study - Richmond Solar Farm