Increased use of solar power is evident, but some urge caution

The solar industry is booming in Las Vegas. Panels are going up on residential roofs and commercial installations are coming soon, industry experts say. Nevada is already third in the nation for solar projects.

But there are still many questions to consider before pulling the plug on traditional energy sources, experts said.

State and federal governments have incentive programs and tax breaks for Southern Nevada. Some in private industry have embraced the new tools based on a belief in change, while some industry experts are skeptical about purchasing a system that may not yield a high return on investment, especially if an organization has to finance the project.

Robert Boehm, director at UNLV’s Energy Research Center and a professor in the mechanical engineering department, said the technology is sustainable through the large amount of raw materials available such as sand and silicon. Boehm also said Nevada is a good source for this type of energy.

“We have a lot of sun and a lot of open spaces,” Boehm said.

The sunny climate interested Jared Fisher, owner of Las Vegas Cyclery in Summerlin. He designed his shop to be a net-zero building — a structure that produces enough energy to sustain its operations.

Fisher said he was always baffled that solar power wasn’t more prevalent in Las Vegas, especially with so much available fuel.

His 10,000-square-foot facility harnesses a 53-killowatt system, and there are 230 solar panels on his structure. The cost was $225,000, Fisher said. It was given a platinum rating — the highest available under the Leadership in Energy and Environmental Design rating system.

Fisher acknowledges overbuilding, but said he had a higher purpose.

“I wanted a business model that people could use — people could actually work off of,” he said.

Fisher also said he didn’t see any issues with the cost because he no longer pays any energy bills, saving him thousands of dollars annually.

Fisher is still connected to NV Energy’s grid but hasn’t been billed since 2012 when the system was installed because of the energy credits he’s received.

Although Fisher’s building is uncommon, NV Energy is familiar with energy credits. The utility meters each customer’s usage every month to calculate how much energy has been used. The customer with a solar installation will receive a credit or owe money, depending on his or her system’s ability to produce enough energy for the occupant’s usage — something Fisher no longer has to worry about.

“We’re going to be saving a lot more money faster in the future,” Fisher said.

This metering system is used for NV Energy’s SolarGenerations program — part of a package of legislation that is helping to expand solar in the Las Vegas Valley. Under the program, utility customers can receive incentives for having solar panels installed on their houses or businesses.

Jennifer Schuricht, NV Energy spokeswoman, said the program began in 2004. Its $255 million budget has dwindled to just less than $78 million, and the program is scheduled to end Dec. 31, 2020.

“Assuming nothing else happens, or it’s not extended or changed, that program would go away,” said John Hargrove, manager of renewable programs at NV Energy.

Hargrove said NV Energy pays out the incentives two ways: the upfront incentive, a one-time payment made to customers who have systems smaller than 25 kilowatts; and a performance-based incentive, paid over time to customers with systems larger than 25 kilowatts. The performance incentive is determined by what the system produces.

Beyond NV Energy, Nevada has programs to help businesses transition to solar power. One program, using the LEED rating system, can reduce certain property taxes on existing buildings and new construction. Taxes can be reduced by 25 percent to 35 percent and up to five years — all depending on a building’s LEED rating.

“We’ve seen a lot of developers take advantage of those credits,” said Paul Thomsen, director of the governor’s energy office.

Nevada has also adopted stricter codes for new buildings. The International Energy Conservation Code goes into effect in 2015. All new buildings will have to be compliant by that time, Thomsen said. (See Page 8.)

But incentives and regulation are just a part of what Nevada offers. In 2015, the governor’s energy office will oversee a program that offers low-interest loans —ranging from zero percent to 3 percent — to parties wanting to develop alternative energy projects.

“Our goal is to take advantage of Nevada’s unique resources,” Thomsen said.

The federal government, through the American Recovery and Reinvestment Act, offers an incentive of a 30 percent corporate tax for installing solar energy system, a carrot that’s scheduled to expire at the end of 2016.

Government subsidies in the name of expanding solar power are not something new for Stephen Brown, director of the Center for Business and Economic Research at UNLV. Brown says incentives are driving the increase in solar power usage in the state.

“If subsidies were to go away, solar investment would look a lot less attractive,” Brown said.

However, Bryce Wisan, manager at Las Vegas accounting firm WSRP, thinks government subsidies alone are not enough to buy a solar system.

“Unless the purchase can be profitably used in the operation of the business, then it doesn’t make sense,” Wisan said.

WSRP tax manager Eric Mohler agreed with Wisan.

“I wouldn’t let a tax credit lead to the decision to purchase solar,” Mohler said.

Many businesses might choose to finance their new system.

Wisan said getting financing has been difficult over the past several years. But any loan through a banking institution can be obtained if the business has collateral and is profitable, or the business has receivables and has a history of collecting, he said.

Another option is to get financing from the entity selling the equipment. Many solar companies offer terms from 10 to 20 years on purchases. Some companies lease the equipment at a lower rate.

The Small Business Administration’s website also has information on available federal loans and grants through BusinessUSA’s financing wizard.