Oregon's residential solar market: steady not stellar
By Gretchen Holzgang
The residential solar market in Oregon is steady but far from thriving.
With the end of the Business Energy Tax Credit, the residential solar market is expected to be a bright spot in the solar industry. Despite this, industry experts are not expecting to see large growth in Oregon’s residential market for 2012.
“I think (the residential solar market) will continue to grow, but I doubt we’ll see a three to four times increase like we did from 2010 to 2011,” said Glenn Montgomery, executive director of the Oregon Solar Energy Industries Association.
Predictions for the Oregon residential solar market are similar to the U.S. solar industry as a whole. Nationally the industry is expected to experience a period of slower growth, according to a November ClearSky Advisors U.S PV Market Forecast.
Although Oregon’s Residential Energy Tax Credit remains at $3 per watt, other available incentives in Oregon are reducing. The Energy Trust of Oregon offers incentives through Pacific Power and Portland General Electric. The Pacific Power incentives are dropping this year to $1.25 per direct current watt. The PGE incentive is holding steady at the same $1.75 rate.
In addition, the feed-in tariff program isn’t expected to generate much to the overall growth for the residential solar market. The five-year pilot program, authorized by the Oregon Legislature in 2009, allows solar system owners to sell energy back to participating utilities.
Though the program is popular, the Oregon Public Utility Commission voted to lower payments to participants to hedge the program’s popularity, it still has a low capacity rate.
“Unless the feed-in tariff rate is increased, we won’t see a tremendous amount of growth on the residential solar side,” said Montgomery.
Some funding programs for residential solar are expected to grow this year.
Third-party ownership, or solar leasing offered by companies such as SolarCity and SunRun, is becoming an increasingly popular option.
The third-party leasing model, introduced in Oregon in 2011, is expected to support steady growth in the residential solar market. “I think more people will be opting for leasing rather than owning in Oregon,” said Clair Carison, executive director of Solar Oregon.
Montgomery also predicts an increase in solar leasing, saying it could account to up to half of all residential solar installations in 2012.
With this model, a third-party owns, installs and operates the system and has a long-term agreement with the homeowner for the cost of purchasing the energy generated by the system — making it more affordable for homeowners to go solar.
In addition to saving on the upfront cost of putting in a solar system, which can cost anywhere between $6,500 to $10,000 for each kilowatt of capacity before incentives, the homeowner can still take advantage of state tax credits for the system.
“We have a lot of people who would like to install solar but don’t have the money for the upfront costs,” said Montgomery.
Community solar projects, sometimes referred to as “Solarize” projects, are expected to be another area of growth. Community solar projects are bulk-purchase programs in which a system is owned by multiple community members.
“Many communities around the state are organizing Solarize group purchase campaigns,” including the Gresham, Oregon City and Lake Oswego communities, said Lee Rahr, solar program specialist for residential projects at the city of Portland Bureau of Planning and Sustainability.
Solar Oregon has also seen an increase in community residential solar programs. “We are working with six communities so far in 2012,” said Carison.
The new horizon of community-funded solar is an exciting development for 2012,” said Jaimes Valdez, the solar program specialist for commercial projects at the city of Portland Bureau of Planning and Sustainability. “This will, hopefully, allow affordable incremental participation in solar by a broad range of residents, including renters, condo owners and those with limited solar resources on their own homes.”
Although growth in the residential solar market is expected to be lower in 2012 then the past two year, solar power has become a much more mainstream energy source. “We couldn’t say that three to four years ago,” said Montgomery.
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