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A second look for solar

The cost of solar electric power generation may have declined enough to make it attractive for businesses

August 5, 2013
By Steve Browne , Marshall Independent

MARSHALL - Five years ago, Dr. Anthony Nwakama decided to spend some extra money for a good cause when he built the Southwest Minnesota Orthopedics and Sports Medicine clinic. He installed solar panels on the roof to generate electricity.

The clinic building has 13,000 square feet of space and 5,000 square feet of solar panels on the roof.

"I did it because I thought it was a source of clean energy," Nwakama said. "We just wanted to help the environment, and we thought having a source of clean energy in a medical place would be good."

Article Photos

Photo by Steve Browne
Dr. Anthony Nwakama installed solar panels on the roof of the Southwest Minnesota Orthopedics and Sports Medicine clinic to generate electricity in 2008. Since then the cost of solar systems has declined at least 60 percent, making it a more viable option for businesses.

Nwakama is what's called in tech circles an "early adopter," one of that group of people willing to buy into the first generation of new technology. Early adopters accept the imperfections and expense of first-generation tech and are essential to the process of ironing out the bugs and bringing down costs.

In this case, the downside of the system is high up-front cost and long payback time. The clinic's $250,000 system generates about 40 percent of the building's power averaged over a year, reducing the monthly bill by $50 to $350 per month. At that rate, Nwakama said, even with the $40,000 rebates from the state Department of Commerce, it would take 25 to 30 years to pay for itself.

Solar power is generally more productive in the summer months but not always.

"It's pretty random," said Jessica Buysse, the clinic's office manager. "There's not really any set months that are better than others, but it's pretty maintenance free."

The long payback time and month-to-month unpredictability have not made solar attractive to businesses until recently.

"Obviously there's a lot of power in the sun, and if you can get it it's great," Nwakama said. "But obviously no one wants to wait 20-30 years."

However, recently developments are making solar electric more attractive for business.

"The cost of solar modules has come down at least 60 percent since 2009," said Curt Shellum, owner and CEO of Rochester-based Solar Connection Inc. "And businesses can take a 30 percent tax deduction five years in a row."

According to Shellum, an equivalent area of high-quality solar panels would cost about $96,800 today. With the tax five-year tax deductions, the system would be paid off in eight years.

Solar panels are robust, resist weather damage and last a long time. According to Shellum, there are 30-year-old solar panels still functioning.

Currently, installation costs increase with the distance the installers have to travel. But with system costs and payback times coming down, existing firms have an incentive to expand into new locations, Shellum said.

 
 

 

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