My recent (simplified) levelized cost analysis for commercial PV, at $5,252 a kW installed in WI, over 25 years and with a 5% loan (no shading, no maintenance, no output degradation), is 13.8 cents per kWh as shown on the slide below. This includes a 56% reduction in the installed price due to the ITC and depreciation. With the previously available $600 a kW Focus base incentive, the levelized cost drops to 11.5 cents per kWh.

Arch Electric recently installed and commissioned a 19.32-kilowatt solar electric (PV) system for First Congregational Church, UCC in the City of Sheboygan.

The solar array consists of 84 solar modules and was installed on the roof of the church building with a custom-designed ballast rack system that required only 1 roof penetration into the building.

On an annual basis the Solar PV System will produce over 24,000 kilowatt hours of electricity and save the church more than $2,800.

The solar panel manufacturer has a facility in Georgia, the racking system was designed and manufactured in Southeast Wisconsin, and the NABCEP Certified installers from Arch Electric are local residents. Based in Plymouth, WI, Arch Electric is a leading designer and installer of renewable energy throughout the Midwest, having commissioned over 2-Megawatts of renewable energy on businesses, homes, churches, farms, YMCA’s and other organizations.

Arch Electric also installed a solar electric system at St. Nicholas Senior Apartments in Sheboygan.

A group of Wisconsin cities and nonprofit organizations was awarded $467,188 on Thursday to help develop ways to remove red tape with the goal of bringing down the cost for homeowners and businesses to add solar power.

The funding from the U.S. Department of Energy was part of $12 million awarded nationwide to 22 different projects.

“We’re making it quicker, easier and cheaper for Americans to go solar,” said Energy Secretary Steven Chu during a conference call with reporters about the Solar Rooftop Challenge. “This is about eliminating some of the hassle and costs of installing solar.”

A maze of local permitting requirements can add $2,500 to the price of a solar system on average nationwide, according to an analysis by the solar installation firm SunRun Inc.

The program is part of a series of initiatives launched by the Energy Department, called the SunShot Initiative, that aim to bring down the cost of solar so that it’s competitive with other forms of energy, without subsidies, by the end of the decade.

The Wisconsin team receiving the award includes the Midwest Renewable Energy Association of Custer, the cities of Milwaukee, Madison and Marshfield, as well as Madison Solar Consulting, Renew Wisconsin and the Wisconsin Solar Energy Industries Association.

When the sun shines, Al Schultz makes money. Specifically, the 32 photovoltaic panels on his roof turn the sun’s rays into electricity that powers his home in Ebner Coulee. If he doesn’t need the power, he sells it to Xcel Energy.

“There is a certain peace of mind,” said the self-employed contractor. “It’s kind of a nice thought to think all your power is paid for.”

Schultz is one of a small but growing number of area homeowners who’ve taken advantage of new, cheaper solar technology, which coupled with state and federal incentives have brought residential solar electric systems within reach of more regular folks looking to lessen their dependence on fossil fuels, lower their utility bills and even make some money.

But changes on the horizon have cast a shadow over the solar industry’s future in Wisconsin. . . .

“Right now it’s out of reach for 90 percent of the home-owning population,” said Michael Vickerman, executive director of RENEW Wisconsin, a nonprofit that promotes economically and environmentally sustainable energy in Wisconsin. . . .

Money from Focus on Energy is still available this year, but rebates will be frozen in January as FOE implements new formulas used to evaluate cost effectiveness and rebalances its portfolio of energy savings and renewables.

Program administrator William Haas said next year’s renewable incentives won’t be decided until early spring.

Solar advocates like Vickerman say the energy policy hierarchy, which values efficiency – use reduction – over renewables in terms of cost effectiveness, is misguided.

“However much efficiency is injected, it doesn’t have any change in the resource mix,” he said. “Diversifying resource mix has value.”

Solar panels may reduce dependence on fossil fuels, but dollar for dollar, Haas said, high-efficiency lighting delivers better savings.

Dearing points out that his customers have already weatherized and bought high-efficiency appliances.

“Our customers call us after they’ve done the low-hanging fruit,” he said. “We’re expensive. This is big dollar stuff. This is the future.”

Vickerman says the future of the solar industry depends on policy.

“If we proceed without any policy changes there won’t be much happening,” he said. “You’ll see a number of solar installers go out of business.”

Excerpts from O’Neal’s e-mail (Harming WI Industry: Poor Handling of Focus on Energy Renewables Program) to the PSC and Governor Walker:

Full Spectrum Solar employs seventeen people directly in good paying construction jobs in WI. Many more are employed indirectly as subcontractors and in manufacturing and distribution of the products we use. We are very concerned about the handling of the renewable energy program by the Shaw Group. Nearly all the Focus on Energy incentives for renewable energy systems require that they be installed by the end of this calendar year, but there is no indication whether there will be any renewable energy programs at all next year. In fact, the Shaw Group has not even selected subcontractors to administer this program next year! This uncertainty, along with the normal year-end rush to secure federal tax credits, is creating a massive push to get systems installed by the end of this year. This is requiring installers to hire additional employees and take on additional vehicles and tools, without any assurance of future work. If there is no Focus renewable program at the beginning of next year, but a possibility of a future program, every potential customer will put their work on hold. It is hard to imagine a funding approach that would be more destructive to the renewable energy industry in Wisconsin than what seems to be getting set up by Focus on Energy.

Excerpts from the response of Robert Norcross, Administrator, Gas and Electric Division at the PSC:

The Commission appreciates hearing your perspective on the Focus on Energy renewable programs. While I understand your concerns, changes to the renewable programs are necessary to ensure their sustainability in the long run. Administrative rules require that the portfolio of Focus on Energy programs achieve a cost-benefit ratio of at least 1.0, based on the Total Resource Cost test. With the exception of biomass, no renewable resource measure meets this criteria. In the past, inclusion of non-cost-effective renewable resources was deemed appropriate as the goal of Focus on Energy was to assist in building the renewable infrastructure. Previously, this has not greatly affected the cost-effectiveness of the overall portfolio of programs because renewable projects were a fairly small component of Focus on Energy. However, in 2011 there was a significant increase in renewable projects approved. This resulted in about twice the entire 2011 renewable budget being committed by mid-year. It also put the entire Focus on Energy program in jeopardy of not being cost-effective.

Niels Wolter then offered his analysis of the PSC’s reliance on the Total Resource Cost test and the resulting consequences:

The TRC test is not from the customer’s perspective. It does not include a solar electric system owner’s federal tax benefits, nor does it consider their electric bill reductions. Rather it considers the system from a broader societal perspective. That means that the value of the generation is what it costs a utility to generate the power and meet demand (marginal cost). So what was an economically viable system for a customer may become non viable from the TRC perspective.

Read more about the TRC test here (starting on page 6-5).

Interestingly given how these cost tests work, reducing the Focus on Energy incentive level, does not improve the solar electric program’s benefit cost ratio. If the Focus program has a given amount of incentive funds and demand for incentives outstrips supply, then reducing the incentive per kW would result in more people installing systems, and the Focus program’s portfolio (all the technologies they support) benefit cost ratio would be further reduced. In other words, the reduced incentive would result in more people making the non economic decision (based on the TRCt test) of installing a solar electric system, and pull down the TRC of the entire Focus program. So reducing incentive levels is not a solution to this issue… strangely raising the incentive levels would. But that’s not going to happen.

The TRC tests seems to be an alternative reality that no one lives in… and strange things can happen there.

The solar sector is expanding nationwide, a new report out Monday found, but a renewable energy advocate warned that Wisconsin could see a pullback in solar projects and growth next year.

“Our report shows that there are over 100,000 solar jobs at over 17,000 employment sites nationwide, and despite an extremely sluggish economy, the solar industry is creating jobs nearly 10 times faster than everyone else,” said Andrea Luecke, executive director of The Solar Foundation in Washington, D.C., and former director of the Milwaukee Shines program.

The solar industry’s job growth has been 6.8% over the past year, at a time when the economy was growing by less than 1%.

The solar jobs census also found that solar employers expect to increase the number of solar workers by 24%, representing nearly 24,000 net new jobs by August 2012. Over the next 12 months, nearly half of solar firms expect to add jobs.

Milwaukee is seeing job growth from solar components manufacturing – including the panel factory Helios USA, which opened this year, and the Ingeteam factory that will soon being producing solar inverters.

But the picture for installations isn’t as bright for next year in Wisconsin, despite incentive programs launched in Milwaukee and Madison. There is a flurry of activity this year, but 2012 activity could “fall off the cliff,” said Michael Vickerman, executive director of Renew Wisconsin.

Setbacks for solar projects include the suspension of funding incentives for nonresidential solar by the Focus on Energy program, as well as the cancellation of a program by We Energies that provided incentives for renewable projects.

“There are still a few projects in the pipeline and the second half of this year will be a good one for the industry and installation contractors – as long as they don’t pay any attention to the cliff, the abyss, that’s in store for them this January,” Vickerman said.

From the North Woods to the Illinois border, from Lake Michigan to the Mississippi River, growing numbers of Wisconsin factories, businesses, schools, hospitals, fire stations, apartment buildings and breweries have installed systems that heat their water with the power of the sun.

A newly launched online map on RENEW Wisconsin’s web site displays the locations of more than 60 nonresidential solar hot water systems installed in the state. Each flagged system is accompanied by a box containing information on the owner, installation contractor, system size and date of installation. Many of these systems are linked to their installers’ web sites, accompanied by photos.

The solar hot water map joins the family of on-line renewable energy maps developed by RENEW Wisconsin in the past year. Some maps are resource-specific; others break out renewable energy systems by county.

“These maps verify the enormously positive effect that Wisconsin’s clean energy initiatives like Focus on Energy have had in creating such a vibrant economic sector,” said RENEW executive director Michael Vickerman.

Created in 1999 and strengthened in 2006, Focus on Energy is a ratepayer-funded initiative that helps Wisconsin residents and businesses employ energy efficiency measures and install renewable energy systems.

“In the past five years, Focus on Energy incentives have been instrumental in putting solar hot water on the map in Wisconsin,” Vickerman said. “No other Midwestern state has come close to experiencing Wisconsin’s success in advancing this particular application of solar energy.”

The table below shows the five largest solar hot water installations operating in Wisconsin, two are located at University of Wisconsin campuses.

Owner: UW-Oshkosh
Installer: H&H Solar, Green Sky Energetics
County: Winnebago
Capacity: 6,800 square feet (total)
Year installed: 2010, 2011

Kalahari Resorts
Terrytown Plumbing/H&H Solar
Sauk
4,160
2007

Menomonie Indian Tribe
Energy Concepts
Menomonie
2,600
2010

UW-Stevens Point
Hooper Corp./ Pertzborn Plumbing
Portage
2,240 (total)
2011

Avis Rent-a-Car (multiple locations)
Mitchell’s Heating & Cooling
Outagamie
2,160 (total)
2007

Milwaukee-based Hot Water Products, one of the largest stocking distributors for solar thermal and domestic hot water systems in the Midwest, supplied and designed four of these systems and many others in Wisconsin over the last five years. In addition to training contractors in this field, Hot Water Products also assists them with system design and equipment sizing support.

This year, installation activity has been brisk, but most installation contractors are bracing for a sharp slowdown in 2012, due to a Focus on Energy decision on July 1st to suspend renewable energy grants and incentives to nonresidential customers. The announcement of the funding suspension came after the Legislature voted in June to lop $20 million from Focus on Energy’s 2012 budget.

“The longer Focus on Energy’s funding suspension goes on, the deeper the damage will be. Installers are holding their breath as they wait for Focus on Energy to restore renewable energy funding assistance.”

Installers and system owners wishing to add their installations to the map should contact Alex Brasch at brasch@renewwisconsin.org.

Solar panels produced by Helios Solar Works of Milwaukee will be used by the U.S. Army, the FBI and other government customers under a strategic partnership announced Tuesday by Arista Power Inc.

Arista is a manufacturer of wind turbines and renewable energy storage systems based in Rochester, N.Y.

Financial terms of the partnership weren’t disclosed.

Helios will supply Arista with panels and will refer solar business opportunities to Arista. Arista has agreed to distribute Helios products to the military.

“One of the major benefits of our high-performance modules is their flexibility, which makes it possible to design systems that satisfy a variety of needs, from residential, commercial and governmental applications,” said Steve Ostrenga, Helios chief executive. “We view this as a perfect fit with Arista Power’s products, which are scalable and can be adapted to serve a variety of markets.”

The announcement comes as Helios is seeing demand for made-in-Milwaukee solar panels from the military, Ostrenga said in an interview. Helios is making panels for military bases in Arkansas, New York and Virginia.

“We’re getting a lot of movement in the military because the military has made a stance that, because of energy security, they want to be energy independent,” he said.

A large order for a military base in San Diego began production this week.

As a result of the demand, the company recently added a second shift, and employment is now at about 30 people, Ostrenga said. Plans are in the works for a third shift.

The Department of Defense released an energy strategy last month that incorporates greener technologies as a way to protect soldiers. Thousands of U.S. servicemen have lost their lives in attacks on fuel and other supply convoys in Iraq and Afghanistan.

“As long as U.S. forces rely on large volumes of energy, particularly petroleum-based fuels, the vulnerability and volatility of supplies will continue to raise risks and costs for the armed forces,” the Pentagon said in a report to Congress.