One of the best technology breakthroughs in the solar energy world in the last few years was the invention of the micro inverter. Solar panels produce DC electricity. The inverter is the main electrical component that converts the DC electricity to AC electricity that our homes can use. The micro inverter by Enphase is attached to each solar panel and converts the DC solar energy to AC right at the source. There are several advantages to this.

1. Better overall production. Having each panel paired with its own inverter mitigates the effect of shade on your array.

2. No single point of failure. If one inverter fails it only slightly affects the overall production of the solar array.

3. Per module monitoring. On of the most exciting aspects of Enphase is that it allows the system owner to track the production of each solar panel in the array. If one panel or inverter fails or is under performing you will receive an alert from Enphase. Below is a snapshot of the powerful monitoring software.

Sean Keener Residence

On August 17th the Keener residence system went online. Pacific Power came and swapped out the standard meter with a bidirectional meter, and also installed a solar production meter. According to Pacific Power, this was the first complete feed-in tariff in the Portland metro area. Future City Solar LLC installed the system paying specific attention to designing a system to achieve maximum solar output. This was achieved through the use of a tilt up racking system and Enphase micro inverter technology.

On July 1, 2010 Oregon utilities PGE, Pacific Power, and Idaho Power started accepting applications for a new feed-in tariff program (FIT). This new incentive program is based on the German model which has seen wild success over the years. The idea is simple. A customer who is accepted into the program enters into a 15 year agreement with the utility to get paid for the kilowatt-hours that their system generates. The rate is determined by the system size and location. For most residential customers west of the Cascades the initial rate was set at 65 cents per kwh.

The program was so wildly popular that it sold out within the first 15 minutes. Our company, Future City Solar, was able to submit two applications before the capacity was filled. It seems clear that with this much demand, the initial feed-in tariff rate was set a bit too high to be sustainable. The idea of the pilot program is that the utilities will release blocks of additional capacity every six months. Each time a new block is released, the incentive rate will change slightly in order to find the rate that is most sustainable. It is predicted that the next block that opens on October 1, 2010 will be set at 58 cents per kwh.

Although the idea of the feed-in tariff or solar payment program seems simple enough there are aspects of the program that have created confusion and concern for many customers. I will attempt to address many of the questions I get from customers.

What is the actual rate you get paid? The actual rate that you get paid from the utility is the incentive rate minus the average rate that you pay for electricity. For example,

 65 cents (agreement rate with utility)

- 8  cents (the average rate you pay for electricity)

57 cents  (the net rate you will receive from utility)

Is the money you receive considered taxable income? I suggest you consult your accountant but it seems that the income is considered taxable. As of yet there is no definitive answer on if you will pay taxes on the overall 65 cents/kwh or the net 57 cents per kwh. Also, it is probable that you will be able to depreciate a portion of the system but, once again, please consult your accountant on tax matters.

How do I choose between the feed-in tariff and the state tax credit/Energy Trust rebate? Great question. Part of the decision is based on the quality of your site. Since you are getting paid for actual kwh that you produce it makes sense to install on a site that has a pitched South facing roof with little shade.

There are also yearly costs associated with the feed-in tariff system. Your utility will charge you $10/month for a meter reading fee, and the homeowner will also be responsible for caring liability insurance for the system at an estimated cost of $200/year. You can expect to pay roughly $300-$400 per year during the 15 year contract period.

For small residential systems, 1kW-4kW, these “hidden costs” can detract significantly from your overall return on investment. For residential systems up to 4kW, we have found that customers will get a better return on their investment by using the Energy Trust rebate, state tax credit, and federal tax credit. Residential systems from 4kW-10kW will see a better return by going with the feed-in tariff.