Tonight I was invited to part of a panel before a public group at the Naples Community Hospital. I guess you could call it a Solar Panel.
Here is the text of my brief speech:
“I would like to address the most common misconception about solar energy: Solar energy is expensive and cannot survive without government and utility incentives.
The most common solar product installed in Southwest Florida is not solar electric or solar water heating for the home; it’s solar pool heating. Solar thermal energy has been effectively heating pools for four decades in Southwest Florida, and forms the bread and butter of the local solar energy industry. For virtually all of the 38 years that my employer has been installing solar pool heaters, there have been no rebates or tax credits. There has always been a clear and attractive return on investment with solar pool heaters vs. gas or electric heat pumps without any incentives whatsoever.
Solar electricity has long been seen as out-of-reach technology for the masses, and was admittedly expensive in the recent past. What most people don’t realize is that solar electric systems have come down in price dramatically in the last few years. In fact, wholesale solar electric panel costs have come down over 80% in just the last three years! The total installed price of a system has come down by 60%. Here’s a key fact: The cost of purchasing a solar electric system today without incentives is less than the cost of the same system with incentives three years ago! I should mention that there is still a 30% Federal Tax Credit available for solar electric systems.
Some effective solar energy products like solar water heaters currently have great incentives available, but don’t garner much attention. Others like solar attic fans and solar tubular skylights may have no incentives, yet the price point makes them a popular entry-level solar energy product.
Incentives can be very disruptive. They skew the market and create the perception that the true cost of a product is too high for it to stand on its own. The FL State Solar Rebate program (which is long behind us) was underfunded by the Florida legislature and left the industry with a black eye. Incentives encourage sellers to artificially inflate selling prices. Limited incentive programs like some utility rebates create an unfair playing field for potential buyers and ultimately reduce the adoption of customer owned solar energy systems. The solar industry and its customers gladly embraced all available incentives over the years. The news and marketing message from the industry ingrained the public perception that incentives are a fundamental requirement for solar energy.
The local Southwest Florida solar energy consumer has little to worry about when it comes to net installed prices. This happens to be the most price competitive area in the nation for solar pool heating systems, brought on by fierce competition and strong demand. Typical solar electric prices locally are a full $1 per watt lower than the national average – about 20% lower than states that have healthy incentive programs. While incentives have helped spur demand for solar energy in many states, the demand is largely a result of a slew of leasing companies chasing rebates, which has the effect of reducing the dollar benefit to the ultimate consumer. Incentives are, and should be, a short-term stimulus to an emerging industry.
The solar industry has emerged. We shouldn’t worry about solar rebates anymore. The likelihood of expanded Federal programs or new State programs for distributed solar power generation are less than remote. Utility rebate programs currently in place are ineffective and should not be renewed, at least in their current form. The combination of plummeting component costs, a highly competitive local marketplace, and a growing demand for solar products nation- and world-wide is great for the industry. The misconception that solar energy needs incentives to be successful is old news. Hopefully we can put the myth to bed here tonight!”