Solar Energy Powering Savings in Ohio
The pace of solar installations is heating up in Ohio and companies are reaping the economic and PR benefits.
It took 40 years for 1 million solar energy systems to be installed in America, a feat that was accomplished in May 2016. It’s expected it will take only two additional years for the second million installations to occur. The rise of solar in America is based on several factors, including the need for energy independence, the rising cost of electricity prices, and the environmental benefit of not having to burn fossil fuels.
As of March 30, 2017, approximately 2,250 solar energy systems have been installed in Ohio. This includes 470 installations in the 13 counties that comprise Northeast Ohio, totaling 23 MW. For every 1 MW of solar installed, approximately 164 homes can be powered. This means approximately 3,800 homes are powered through solar energy in Northeast Ohio. In Cuyahoga County alone there are approximately 160 solar installations totaling 7.75 MW.
According to a recent report from the Solar Foundation, there are more than 5,800 people working in solar in the state of Ohio. Cuyahoga County employs the most people in the state, with just more than 1,000 people employed in the industry. The bulk of solar jobs are blue collar installation jobs that pay good wages and cannot be exported. The largest solar installation company in the region is YellowLite, which is headquartered in downtown Cleveland and services the entire state.
In 2016, YellowLite installed 102 systems, including 93 in Ohio. Looking at accepted SREC (Solar Renewable Energy Credit) applications through the PUCO, we found a total of 389 systems were accepted for SRECs in 2016. According to their numbers, Yellowlite has installed nearly one out of every four solar energy systems in Ohio.
Why go solar?
The most important reason people decide to go solar is economic. Residential and commercial clients recoup their initial investment and receive decades of free electricity. Solar panels are the largest cost of an installation. They are rugged, durable pieces of technology that have no moving parts and require no maintenance. The industry standard warranty length is 25 years, with most research indicating many panels will last for 10 or more years beyond the end of the warranty.
Residential solar installations generally have a payback between eight and 10 years. There are fixed costs involved for every installation which include the labor, permitting, and administrative costs. Larger systems have a shorter payback based on the marginal decrease in price per panel as the system size increases. Solar energy systems are exempt from state sales and property taxes. They will generally not increase a homeowner’s insurance premium. Best of all, if the house is put on the market, system owners can expect a premium upon sale that is generally equal to the initial contract cost minus depreciation based on the 25-year expected lifetime of the system.
For companies that install solar on their commercial properties, the payback rate is measured at around five to seven years. Businesses can not only take advantage of the 30% Federal ITC (The Investment Tax Credit (ITC) is currently a 30 percent federal tax credit claimed against the tax liability of residential (Section 25D) and commercial and utility (Section 48) investors in solar energy property) , they can depreciate their investment at an accelerated rate through Modified Accelerated Cost Recovery System MACRS. Businesses can lock in energy rates for decades while hedging against rising electricity prices.
Businesses that add solar also accrue additional intangible benefits. Solar can enhance your brand, serve as a newsworthy event that can be shared with local media, and demonstrate that a business is concerned about sustainability, which is viewed as popular in the community. Branding a company as green can also lead to greater employee retention which, over the course of time, can be far more economically lucrative than the energy savings that result.
Solar is a viable option in Northeast Ohio. More and more residents and businesses are considering solar as an economic hedge against rising electricity costs as well as the most important single action that can be taken to reduce your environmental impact.
Ryan Veith is a Communications Manager for YellowLite, a solar installation company serving Ohio that has done more than 340 solar installations.