Say ‘Yah’ to da U.P.’s Sunshine, eh?
MTU scientist says high rates make rooftop solar a good Up North deal
Solar Power | September 29, 2014 | By Jim Dulzo
About the Author
Jim Dulzo is the Michigan Land Use Institute’s senior energy policy adviser. Reach him at email@example.com.
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|Abhilash Kantamneni used data from solar panels at Houghton's Keweenaw Research Center, where he works, to determine that small-scale solar systems make good economic sense in many parts of Michigan's Upper Peninsula.|
One of the brightest bolts of sunshine at the recent Solar Powering Michigan conference came from, of all places, way up north in Houghton, Mich.—and delivered by a speaker from, of all places, Chennai, India.
Abhilash Kantamneni, a Ph.D. candidate in computer science at Michigan Technological University, showed up at the Traverse City event with an unexpected, spot-on message for Michiganders living in the cold, snowy, and, when it comes to energy costs, pricey Upper Peninsula: There is a large, untapped, economically smart opportunity to develop rooftop solar systems for homes and small businesses in the U.P.
The budding scientist walked a roomful of solar installers through his surprising numbers at a breakout session that considered the technology’s sales potential in Michigan.
Kantamneni is no solar salesman. But, he says, his data-based approach to life makes him a strong advocate for using the technology in Houghton and other places with high electricity prices in the U.P. His work convinces him that, even without pro-solar policies like the ones helping sun power take off in other not-very sunny states, Yoopers who use solar to eliminate their electric bills will earn a remarkably quick return on their investment.
It all started in 2009, when he drove from the Houghton airport to the MTU campus to start work on his master’s degree in astrophysics. Along the way, he was shocked at what he did not see out the car window.
“I had been reading about how the U.S. was overtaking China in renewable energy, so I expected to see lots of solar panels. But I did not see any of them,” he recalled. “And whenever I asked about it, the answer I got was always, ‘We get a lot of snow—250 inches, and big trucks to push it all off the roads.’”
Kantamneni eventually stopped thinking about his question. But several years, a few trips back to India, and a completed degree later, he moved to a Houghton apartment where, unlike in the dorms, he was responsible for his electric bill. He was shocked when the first one arrived.
“It was for $220, and I thought, ‘No way is this right!’” he said.
But it was right. As he soon discovered, “In Houghton we have some of the highest electric rates in the nation—higher than in 49 other states.”
Necessity and Invention
That prompted him to look closely at the performance of the only panels he’d seen in Houghton—at the Keweenaw Research Center, where he works.
“I’m trained as a scientist, so I wanted to see some data from those panels. They’d been doing some analysis of the best angle to set them at, and I spent six or seven months looking at the numbers.”
Factoring in Michigan’s net metering law, local electric rates, Houghton’s annual sunshine quotient, and plummeting panel prices led him to a eureka moment: “It turns out that if you only put up as many panels as you actually need, [and] use net metering to bank the energy they make during the summer months as credit to compensate for lower generation in the winter, then it makes economic sense.”
That is true for two reasons, he said.
First, the research center’s work confirmed that putting panels at a higher angle in the winter allows them not only to shed snow easily, but also catch more rays, both from winter’s low-in-the sky sun and from the snow, which reflects 85 percent of the sunlight that strikes it.
Second, even Michigan’s relatively mild-mannered net metering law works well when local power is pricey, because utilities pay customers for their panel power at those high retail rates, producing a faster per-kilowatt-hour payback.
“So I ran all these numbers, and figured out you could pay off an investment in solar panels quicker here, in Houghton, than almost anywhere else in the country. And that’s true even though we have, on average, only about 3.8 hours of useable sunlight every day, while Arizona and California and other places like that have something like 7.5,” he said. “That doesn’t matter so much, since our electric rates are so high that the solar investment can be paid off in about 7½ or 8 years.”
That equals a solid, 13-percent annual return on investment, likely followed by 20 years of free electricity before the panels die.
Spreading the Good News
Kantamneni quickly began spreading the good news: Given solar’s falling costs, it makes economic sense to plug into the sun in much of the U.P., even though, aside from net metering, Michigan lacks supportive solar policies like the tax credits, utility rebates, and mandates that have made solar a very big business in other states with similar amounts of sunshine.
Soon, he was getting emails and phone calls from people asking, “How do I go solar? My bills are really high. How do I save money?”
Like a good scientist, Kantamneni started sharing his data. Today, via the research center, he maintains an online ranking of Michigan’s best solar markets based on the local electric rates for 17 utilities in the state, and an online calculator that uses Michigan-specific irradiance and electric rate statistics to figure out how big a system to build and how quickly it pays for itself. He also posted what he describes as an “A to Z guidebook” about installing solar panels in Houghton, and the rest of the state.
“I extended the analysis I used for Houghton to the whole state,” he explained. “I tried to rank the areas more conducive to solar based on average local rates, how fast those rates have increased in the past few years, and the average electricity consumption in the area.
“Now all they have to do is enter their electric bill numbers, and the calculator spits out how many panels they should buy, the payback period, the size of a monthly loan payment, and how much coal you are not using.”
His solar data spelunking also led Kantamneni to another positive force for solar power—Michigan Saves. The nonprofit, which has teamed up with a Houghton credit union, provides no-equity, low-interest, long-term loans for efficiency and clean energy projects—particularly for homeowners and small businesses—as well as certified, experienced solar installers.
“Michigan Saves is really great,” he said. ‘I don’t know if anyone else in the country is providing that kind of service. I would say that if you can line up all the factors people would need—this is what the data is, this is the money you will save, and here is the financing—you will find people will sign right up.”
Kantamneni thinks that may now be happening in Houghton.
“I can’t take full credit, but as of 2012, there were only 30 kilowatts of solar panels installed in Houghton, in a county of 35,000 people. Since then, we’ve added close to another 60 Kw. Just last week, a solar installer from downstate came up here and looked at roofs for businesses and schools at many different locations. So I think it is very likely we will add close to another 220 Kw soon.”
Bottom Up and Top Down
Given the many unpaid, volunteer, pro-solar activities Kantamneni is pursuing, it’s hard to believe he’ll finish his Ph. D. anytime soon.
Among other things, he says he’s helping the City of Houghton with rooftop solar; leading Houghton County’s efforts to win a national energy efficiency competition; talking to the local electric co-op board about community solar; writing a bi-weekly column for a local economic development agency; helping an Indian tribe recruit a Texas solar panel assembler to set up shop; pushing for property assessed clean energy (PACE) financing; and doing a bit of teaching at local middle schools.
“This is an effort to give back to the community,” he said of his extensive pro bono work. “I think the true purpose of education is to help the people around you, and I hope that through my career, I continue to meet that goal.”
Despite his self-taught expertise on the science and economics of solar power in Michigan, Kantamneni has little interest in wading into the political fray, where big changes, while powerful when they occur, are difficult to make. That’s true especially in Michigan where, until recently, state lawmakers had done little to advance clean energy since the Granholm administration enacted the state’s current, about-to-expire renewables mandate.
“I like bottom-up approaches,” he explained. “Instead of going to Lansing and sitting in a bar with legislators trying to be a lobbyist, I’ve seen people gain traction by picking a small project, doing a really good job with it, and then people come to you. It’s like they smell the coffee from the coffee pot. Then the legislators take notice, and you might see some action.”
However, Kantamneni does think that Michigan needs to improve its solar policies., even with high power prices enabling solar development in the U.P. The net metering rules are very limiting, he said, if Michiganders are going to develop significant amounts of customer-owned sun power.
“The challenge is finding a middle ground between the interest of consumers and utilities, while also balancing intangible benefits like job creation, environmental standards, and national energy security,” he wrote in one of his online essays. “While technical solutions already exist, utilities need to incorporate such key developments and upgrade their outdated business models. For this to happen, our states need to start developing smart energy policy roadmaps for the future.”
Jim Dulzo is the Michigan Land Use Institute’s senior energy policy specialist. Reach him at firstname.lastname@example.org.
941 days ago, 1:17pm | by Gail Griffith | Report Comment
Thanks, Abhi, for letting us know that solar is a real and economically sound investment for us Yoopers. Our Unitarian Universalist Congregation in Marquette is planning to outfit our meeting house with solar panels. We'll take advantage of some of your research!
941 days ago, 1:47pm | by Abhilash Kantamneni | Report Comment
I am glad you liked the article Gail. I have worked with members of the Unitarian Universalist Congregation in Keeweenaw/Houghton on their projects, and I would recommend connecting with them to pursue your common goal of going solar.
941 days ago, 4:30pm | by Susan DeGroff | Report Comment
Great article! Do you have recommendations for people living in the eastern UP with Cloverland Electric? Is it cost effective? If so, over what period of time? Do you have any recommendations for solar panel companies in that area?
I'm amazed at how much passive solar energy there is on a sunny day in winter. The furnace rarely kicks on during daylight hours.
941 days ago, 7:13pm | by Abhilash Kantamneni | Report Comment
Residents of Cloverland are blessed by some of the cheapest electric rates, and the lowest rate increases in the state of Michigan.
By popular demand, I updated the calculator to make it easier to measure the payback by simply selecting your utility from a drop down menu.
I ran some quick numbers, and it looks like in Cloverland the payback period is 18 years for a system that is half-financed, half paid upfront.
While that might sound like a lot of time, it is important to remember that you are locking your rates down for the next 45 years, i.e, the average lifetime of the solar panels.
In other words, net-metered solar is ALWAYS cost effective, not only do you save on your electric bills, but over the life of your solar system you always end on net positive.
I cannot unfortunately recommend any specific installers in your area, but use the calculator as a tool to make sure you are getting a good deal from them.
I wish you luck.
941 days ago, 7:30pm | by Susan DeGroff | Report Comment
Thank you. I'm assuming if it were paid in total with no financing it would be less than 18 years?
941 days ago, 8:08pm | by Abhilash Kantamneni | Report Comment
Yes Susan, you will be looking at a 15-16 year payback, along with a close to 300% ROI over the next 45 years. I hope this helps.
938 days ago, 3:53pm | by Jordan Crolly | Report Comment
Thanks for sharing this article with me, Abhi. If anyone is interested in receiving a solar project proposal, then please feel free to reach out to me. I'm an Energy Engineer for the solar installer that Abhi referenced, J. Ranck Electric. email@example.com
911 days ago, 12:38am | by Marshall Ryerson | Report Comment
I am pleased you have chosen to investigate turning unused rooftop space into an income generating revenue stream.
While energy costs continue to rise, solar collection costs have dropped considerably making the feasibility of rooftop solar very attractive for upcoming roofing projects. Key to a successful project is single source system accountability and single source membrane system responsibility.
Funding for appropriate projects, can often be obtained through the PACE financing program with little or no upfront money. Since the roof is considered the framework, owners can work with their accountant, to submit the entire roof system costs for the 30% federal tax credit. At the present, IRS guidelines allow a 5 year accelerated depreciation schedule as well. Many ROI calculations have shown 10 year ROI’s. I would be happy to discuss feasibility in more detail. Marshall Ryerson - Manufacturers Rep - 616-299-1751 firstname.lastname@example.org