Community Renewable Energy

Understanding Costs

Fully installed small PV systems can range in cost from $8- $10 per Watt. Community-scale systems should benefit from economies of scale, achieving installed costs of $6-$8 per Watt.  The cost to install a PV system breaks down roughly to:

• PV Modules: 40%-60%
• Inverters: 10%-15%
• Balance of System: 15% (BOS includes mounting equipment, wires, switches, and all other parts not broken out)
• Design and Installation: 15%

Operations and maintenance (O&M) costs for PV systems are proportionately insignificant at less than $.01 per kilowatt-hour.

Estimating energy production

Upfront cost of an installation is one piece of the picture, but just as important to business model development is a pro-forma that shows the costs and values over the system’s lifetime.  A Community Solar project pro forma will need to show the costs and incomes to the developer and/or project owner as well as to participants of the project- those contributing to the system in exchange for some financial return.  The incomes over time will likely include some revenue based on upfront cost or capacity (i.e. a tax credit worth 30% of installed cost) and some based on power produced over time (i.e. a credit for the “virtually net metered” power or a WA State Renewable Energy Production Incentive Payment).  A realistic understanding of the project’s return, is thus tied directly to production estimates.  See the Resource Assessment and Siting sections for more on determining the estimated production of a PV system.  

Incentives

Incentives can interact in complicated ways, and project organizers should seek further information before including these incentives in a project plan. In addition to investigating the available state and federal incentives, project developers should inquire about individual utility incentive programs for solar project development. Utility assistance could take the form of a grant or a rebate, or an in-kind contribution such as engineering support or reduced-cost installation labor. The Database of State Incentives for Renewables and Efficiency, found at www.dsireusa.org, is a fantastic resource for those investigating local, state, and federal incentive programs.

To learn more about specific incentive programs follow the links below:

Federal Incentives: Business Energy Investment Tax Credit (ITC), Modified Accelerated Cost-Recovery System (MACRS) and Bonus Depreciation,Clean Renewable Energy Bonds (CREBs)

State Incentives:

• Oregon: Energy Trust of Oregon, Business Energy Tax Credit, Renewable Energy Systems Tax Exemption
• Washington: Renewable Energy Production Incentive, Sales and Use Tax Exemption