Washington's Taxpayers are Fueling Renewable Energy

PV-Power for EVs!

At a recent get-together hosted by the North Sound Electric Vehicle Association, I got to thinking more about the role our photovoltaic (PV) system plays into the "fueling" of our electric vehicles (EVs). There, at the EVent, were 13 EVs, and it just seemed natural to all of the drivers that we should place the vehicles in front of a large 12.225kW PV array owned by the Association's president. While naturally EVs and PVs share the commonality of electricity, I thought that there must be more to the EV-PV marriage that has a so many electric vehicle owners getting photovoltaics installed.

At our own house, we enjoy indirectly charging our two Nissan LEAFs with the electricity that our 5.4kW PV array produces. Most of our EV charging is done at night, thus, drawing from the grid. Because of net metering, though, our PV system will essentially provide us with over 23,000 miles of home-brewed power a year. 

The thought of driving 23,000 miles for free is not a completely accurate reflection of why we are loving that PV system so much. You see, in Washington state, it is written into law that if a homeowner's PV system (panels and inverters) are made in Washington, then there will be a financial benefit of $0.54 per kWh produced. That feed-in tariff will help pay for the entire cost of our PV system in less than four years!

The feed-in tariff is why some folks get upset when I enthusiastically talk with them about our PV system, and the accompanying incentives that are seemingly too good to be true. Occasionally, I get a snarky "you're welcome" response. However, after examining the data, there appears to be good reason for us in Washington state to use taxpayer money for the investment in, and production of, renewable energy.

Job Creation

According to the Solar Energy Industries Association:

• There are currently more than 112 solar companies at work throughout the value chain in Washington, employing 2,000 individuals. These companies can be broken down across the following categories: 31 manufacturers, 12 manufacturing facilities, 38 contractor/installers, 9 project developers, 12 distributers, and 23 engaged in other solar activities including financing, engineering, and legal support.

• In 2013, $44 million was invested in Washington to install solar for home, business, and utility use. This represented an 88% increase over the previous year, and is expected to grow in 2014.

And the results of the National Solar Jobs Census 2013 provide an in-depth look at job creation:

• Seventy-seven percent of new solar jobs since September 2012 are new jobs, rather than existing positions that have added solar responsibilities.

• The average solar installer earns $23.63 per hour, which is comparable to wages paid to skilled electricians and plumbers, and higher than the average rates for roofers and construction workers.

Better for the Grid

Many west coast utilities purchase electricity from the Bonneville Power Administration (BPA). The BPA sells power generated from the federal dams located throughout the Columbia Basin (read about our trip in a Nissan LEAF to visit the largest such dam, the Grand Coulee Dam). The BPA also controls the vast majority of the region's high voltage transmission lines.

Grand Coulee Dam & Nissan LEAF: They're Electric!

When demand requires more or less power, the BPA can adjust production at its hydroelectric dams and at wind farms on its transmission lines. However, there are times that excess wind generation can cause problems for the grid. Hydroelectric dams can be thought of as massive storage systems, as power generation is modulated by increasing generation, retaining water in the reservoirs, or by spilling water over the dam. Spilling too much water over the dam does, though, pose a risk to salmon downstream.

Enter solar. An increase of homeowner-installed PV provides local utilities more predictive power needs. When utilities and the BPA can improve the predictability of power demands and power supply, consumers end up with lower rates. Regardless if one is an EV owner, a PV producer, or none of the above, lower utility rates are the common good. 

I think that, from now on, when somebody gets twisted out of shape with the thought of their taxpayer money going to programs that support photovoltaics, I will, in turn, tell them "you're welcome!" for contributing to their low electricity rates.

Shared Burden, Shared Benefit

To examine how much the individual tax burden is for the investment of such renewable energy endeavors, one can first look to data from the Bureau of Labor Statistics showing the employment numbers in Washington state. As of June of 2014, there were 3,272,300 employed in the state. Given that we expect to receive about $3800 per year in feed-in tariffs, each taxpayer in our state is burdened with one-tenth of one cent per year for paying us to go solar. Washington state, and other states, make feed-in tariffs enticing for the individual because their governments know that it is a very effective way to spur substantial job growth. Not a bad return!

This takes me back to my original question: Why do so many EV owners install PV at their homes? Occam's razor: the simplest solution is likely the correct one. The EV-PV connection probably comes down to the fact that once somebody goes through the process of researching and understanding the rebates and incentive programs available with either, they are more likely to know where to look for the other. Simple. And as usual, decisions are made based on economics. 

We are in the midst of an energy revolution. Those governing us know this, and hopefully more citizens come to understand that reality, too. With knowledge, the EV-PV benefit can be an amazing individual financial windfall. And the more of us that go EV and PV, the greater the collective economy.

Eee-Vee, Pee-Vee: An EV Owner's Realization that Solar Makes Perfect Sense in Seattle

Eee-Vee

Why did you buy an electric car? Or, why would you buy an EV? Is it the ultra-ECO Nissan LEAF? Or are you into the totally chic Tesla Model S? Whatever your reasons, there is no hiding the fact that there are some very real monetary motivations to going EV too!

One's decision to ultimately buy an EV also means that there will be an investment. An investment of time is necessary to fully understand and realize the financial benefits of the purchase. Here's the short version:

The U.S. federal government subsidizes EV sales by providing owners an income tax rebate on their overall tax burden during the year the EV was purchased. It's an awesome fringe benefit, but the buyer should do some tax prep to be sure that the full $7500 rebate will come back at tax time. This federal incentive is a use-it-or-lose-it affair. Otherwise, leasing is an excellent option, wherein the $7500 tax benefit applies immediately at the point-of-sale with a resulting low, low lease rate for the new EV driver.

In Washington state, where my family lives, EV adoption is also incentivized by forgoing state sales tax on the purchase of any new electric vehicle. Again, though, one needs to research this perk as some plug-in vehicles qualify (Nissan LEAF), and others do not (Chevy Volt).

The longer that an EV driver can keep the car in service, substantial long-term financial advantages will be realized too. With little to no maintenance costs to keep the vehicle on the road, EV drivers can benefit from the fantastic financial return for money not spent on their car. Windshield washer fluid and a new in-cabin air filter once a year is about it.

EV  =  NMG (No More Gas!)

Lastly, there is so much money not spent on "fuel." At 15,000 miles driven a year, an average medium-sized ICE (internal combustion engine) car costs about $0.15 per mile in gas. As compared to a Nissan LEAF, for example, that costs less than $0.03 per mile in electricity.



Pee-Vee

Made in Washington, Itek Energy Solar Panels

Last summer, after trading in our Mazda CX-9 for a second Nissan LEAF, I started researching incentivized energy options. The next bang-for-the-buck "going green" play was the installation of photovoltaics (PVs) on our roof. Our new PV system will actually be more financially beneficial than our EVs!

The easiest way to explain the cash benefits is to show it on a simplified graph:

The above graph represents after-tax incentives and rebates. This is important to clarify because the cash rebates and incentives are provided at different times in that first year of a PV system being installed. Also, these incentives are a mixture of federal, state (Washington), and local (Snohomish County PUD) programs. Others' cash benefits may differ, depending on location.

For those living in Washington and receiving electric service through the Snohomish County PUD, this is the breakdown:

Year One: About $12,000 Cash 

• Federal Tax Rebate: 30% tax rebate*
• State Incentive: Solar production cash incentive of $0.54 per kWh generated**
• Local Incentive: Snohomish County PUD cash incentive of $2500***

Years Two - Six: About $3,100 Cash Annually

• State Incentive: Solar production cash incentive of $0.54 per kWh generated

Now to explain all of those asterisk! 

*The federal tax rebate is used at tax time for 30% of the PV installation cost. In our case, the $21,050 project will allow for a tax rebate of just over $6,300 on our 2014 federal income taxes. And unlike the EV federal tax credit, if one does not have the tax burden to get the full rebate amount, the 30% rebate can be stretched over multiple years so that the whole amount is realized.

**Washington state is incentivizing PV solar production. The base incentive rate is $0.15 per kWh produced. This is if the solar panels and inverter(s) are made outside of Washington state. If Made in Washington panels and inverter(s) are used on the PV project, the state will reward those who buy local with a $0.54 per kWh cash incentive. 

Estimating what the annual solar production will be requires the use of a sophisticated program (Not my brain, silly people!). We can expect the first year solar production to total about 5,800 kWh as measured by AC net output with the System Advisor Model. Our state production incentive will be about $3,100 annually, but our first year payout will be a bit less due to the PV installation happening partway into the calendar year.

The Washington state production incentive is accrued annually as a cash incentive. However, the state production incentive program will expire on June 30, 2020. Thus, the state production incentive in year seven is half of the preceding years.

***Snohomish County PUD incentivizes its electricity costumers to install PV by providing a $2500 cash incentive. This is a $500 per kW installed incentive, up to $2500 total. Since our PV system has a DC rating of 5.4 kW (solar production measured at the solar panels), we'll get the full $2500.

We do have a 10-year loan for the PV system, therefore will have a negative net cashflow (approx. -$2,500/year) for years 8-10. However, once the system is paid off, we'll benefit from lower utility bills for as long as we live in the house. And when it comes time to sell our house, we'll benefit from increased property value from the PV system.

There it is...Eee-Vee, Pee-Vee, and one of the true pleasures of EV ownership: becoming savvy about all of the financial opportunities for going green.