More Ypsilanti businesses are finding huge financial savings in solar energy
A home at 403 S. Huron St. has 55 solar panels.
Tom Perkins | For AnnArbor.com
Kevin Krzyzanski is no longer paying DTE Energy for electricity. In fact, for the next 20 years, there's a good chance DTE could be paying him for his contribution to the power grid.
That’s because Krzyzanski installed a 55 solar panel array on the roof and carport of the home he rents out, which is capable of producing 13 kilowatts daily.
When the sun is shining during the day, he sends excess power he produces but doesn't use into the DTE grid. DTE gives Krzyzanski credit for that energy, and the credits are used when the sun isn't shining and the home pulls power out of the grid.
Like several other business owners in Ypsilanti, Krzyzanski is finding that solar energy, which was once something he found fascinating but never made financial sense, can be a smarter investment than in the past.
His rental home at 403 S. Huron St. is one of a small but growing group of buildings in Ypsilanti utilizing solar power that includes the River Street Bakery, Ypsilanti Food Co-op, Adams STEM Academy and the Ypsilanti City Hall. In addition, the Corner Brewery is undertaking a large solar energy project that will provide both electricity and hot water to the building by the end of the year.
Krzyzanski made the project financially possible through several measures. He utilized a federal tax credit covering 30 percent of the installation. He also applied for the now-expired DTE Solar Currents program, which offered $2.40 cents up front for every watt his 13 kilowatt system was capable of generating. Additionally, the program pays 11 cents for every kilowatt he generates for 20 years.
Krzyzanski rents the home out, so it qualifies as a commercial property. When he does his taxes this year, he will be able to use the six-year depreciation instead of 30-year.
The bottom line — after taking out a loan for $82,000 to purchase highly efficient solar panels, the total out-of-pocket cost came to around $24,000. Krzyzanski expects to have the array paid off within five years.
“As a hobbyist I wanted to (use solar energy), but as business owner I never could do it,” he said. “But when I saw the new incentives available it became less of a 'green' thing and more of a financial thing. I said to people ‘You would be a fool to pass up on the opportunity.’ ”
Corner Brewery owners Matt and Rene Greff will begin installing a 156-hybrid solar panel system on their roof and southern awning next week. When complete by the end of the year, they expect the brewery's gas and electric bills will be cut in half, saving them about $20,000 annually.
The hybrid panels they are installing are made by Power Panel in downtown Detroit and work by trapping heat with photovoltaic plates placed over the solar panels. That heats tubes underneath the panels that then run hot water to a highly insulated hot water storage unit.
Matt Greff said he expects the $155,000 investment, which is partly funded by the federal tax break and various DTE incentives, will pay itself off within five years.
The decision to invest in renewable energies came after being informed of the benefits by a variety of experts. Solar Ypsi’s Dave Strenski approached the Greffs after they opened and explained why their building was uniquely positioned to have a successful solar array. An energy audit offered through the Ann Arbor Downtown Development Authority further informed them on the benefits, and a team from the University of Michigan’s School of Natural Resources master’s program did a full analysis of the brewery's energy use and available incentives for a thesis project.
After listening to the recommendations from the students’ “Green Brewery” project, the Greffs decided to move forward with the system.
“The ‘Why?’ is partly because we’re interested in reducing our carbon footprint and partly because it just makes sense on the bottom line,” Rene Greff said.
In Depot Town, the Ypsilanti Food Co-op is partly run on solar power and its River Street Bakery is run fully on renewable energy via its solar panels and a wood-burning stove. The buildings hold a total of 42 panels that can produce a combined total of 8.3 KW of electricity in peak hours. On sunny days, the bakery exports its excess energy back into DTE’s power grid and receives credits it can apply toward energy on cloudy days or at night.
Ultimately, the bakery ends up creating more power than it uses, director Corinne Sikorski said.
The installation was covered by a $44,000 Michigan Department of Labor, Energy and Economic Growth grant.
Like others in Ypsilanti, Strenski played a role in persuading the co-op to consider solar energy and installing the panels, and the project was recently featured in Google video. Sikorski said the co-op has always prioritized reducing the amount of energy it uses, and solar energy made sense as the business expanded.
“The co-op has always attempted to have as low of an impact as possible going back to when we started,” she said. “It has never been about ‘How can we market ourselves as being more green?’ it has just been what we are.”
Strenski also recently helped the Adams STEM Academy secure a grant through the Michigan Renewable Schools Program. That allowed the district to install 10 panels on its roof. Although it generates only a percentage of the schools’ energy needs, Strenski says one of the benefits is the real time graphs on Solar Ypsi demonstrates to students and others how much energy is used.
Real time energy graphs for Adams, the co-op, River Street Bakery, Adams and City Hall are all available on Solarypsi.org, along with a wealth of information on each project and solar energy. Strenski said the site, which was developed with EMU student Nick Estep, also will soon have real time energy usage graphs for Krzyzanski's building and likely the Corner Brewery in the future.
The site also has information on the Oct. 1 National Solar Tour, which will feature all of Ypsilanti's solar sites, including the Corner Brewery. Participants are invited to visit each location, where Strenski and other solar experts will be on hand to answer questions about each project.
Comments
rjchampagne
Sat, Sep 24, 2011 : 10:08 p.m.
How does spending 82k to pay the electric bill for one house make any sense. No wonder the government is broke at all levels. Washtenaw county has come to the point, where there is no economic development unless the taxpayers pay for it.
Dave
Tue, Sep 20, 2011 : 4:19 p.m.
One question of practicality if I may... ...what happens when it snows?
Kevin
Wed, Sep 21, 2011 : 8:59 p.m.
Regarding clouds, the impact ranges from negligible to crippling. On the sunnier days in the last few weeks, I've generated around 45-50kWh per day. On cloudy days, that drops to around 25kWh. However, a few days ago when we had really torrential rain, I generated a whopping 6kWh. :) That's why PVWatts is such a wonderful tool in figuring out average sun insolation in a location before you commit to such a large project.
Kevin
Wed, Sep 21, 2011 : 8:47 p.m.
My solar installers provided me with a solar "broom". The idea is that I can brush off the snow after a heavy snowstorm. The panels on the roof are at a 45 degrees incline so they aren't likely to accumulate too much. The carport is a flatter 12 degrees so I may need to get out there a few times. Or not. The other thing to keep in mind is that over 85% of my yearly production occurs between March and November. Out of the other 3 months, there may be some snow coverage but if I were to never clean a single panel the sun would likely melt off the snow in due time. Even if the panels were offline for half the time during those 3 months I'd still generate 92% of my potential without having to do a thing. As this is my first year, I intend to be extremely diligent with the snow removal. Perhaps next winter I will leave it be and compare the results to see if the effort was worth it.
Craig Lounsbury
Tue, Sep 20, 2011 : 6:24 p.m.
what about heavy cloud cover? And how "delicate" are they with respect to snow removal?
Mark Hergott
Tue, Sep 20, 2011 : 5:07 p.m.
If the panels are not cleaned of snow, then no electricity is produced.
L. C. Burgundy
Tue, Sep 20, 2011 : 2:13 p.m.
Having actually run the numbers myself within the past year, if you exclude tax subsidization and utility company subsidization (i.e., having others involuntarily pay for you to have solar panels) and other incentives, the real payback period for solar panels is on the order of about 30-50 years. This isn't the green economy you were looking for.
Kevin
Wed, Sep 21, 2011 : 8:35 p.m.
I've been running numbers for 5 years and, every time, the payback was between 20-30 years. The truth is, the technology is moving quickly (in those 5 years, efficiency is up close to 50% and costs are down around the same) but, admittedly, if it wasn't for the federal tax credit and the DTE program, it would still likely be 20+ years. That's why I brought up the business aspect in the original interview -- the "green" guy in me has been waiting for years for the return on investment to become short enough to appease my business sensibilities. With this current setup, it's likely that this 20 year investment will outpace any stock market investment that I could have made with the same money. To simplify, this wasn't just a "green" endeavor but, rather, a well though out investment that has the potential (completely dependent on the next 20 years of the stock market, of course) of being the safest haven for my money. That's also not considering the fact that I am more competitive with my rental units now that utility costs are lower as well as the simple fact that I'm getting a lot of interest in renting my apartments due to the "cool" factor. I used to get a handful of applications when my units became empty. Now, I get several dozen applications in a matter of days.
Craig Lounsbury
Tue, Sep 20, 2011 : 6:19 p.m.
I'm just asking questions about how much these things cost Mark. The story is incomplete and the experts quoted sell the product. I wish the reporter asked more questions than he did. I wish he asked to see electric bills from the bakery to show their net profit. I'd like to know how well that set of panels on the carport are going to work in January with 6 inches of snow on them. I'd like to know how a cloudy day impacts electrical production given that here in MI over the course of a year we see the sun less than 50% of the time its up due to cloud cover. If You think asking questions means I'm anti-green energy your wrong. But ignorance in the name of green doesn't work for me.
Mark Hergott
Tue, Sep 20, 2011 : 5:03 p.m.
I don't understand people like you. The panels provide power to the grid during the peak of consumption. The utilities WANT solar panels. If there were no tax subsidies for oil and coal at the very beginning, we would still be using water wheels and wood. Take away the tax incentives, and the utilities will STILL pay for the electricity. Do you have any idea how many dollars society spends on you to allow you the opportunity to complain about being forced to pay taxes?
Craig Lounsbury
Tue, Sep 20, 2011 : 3:18 p.m.
which falls in with my question of how an $82,000 loan can turn in to $24,000 out of pocket.
Atticus F.
Tue, Sep 20, 2011 : 1:49 p.m.
What a great story! I wonder how far $5,000-$7,000 would get me if I did a self install.
Atticus F.
Tue, Sep 20, 2011 : 8:23 p.m.
Thanks Mark, that might make sense. I could probably fabricate a couple mounting brackets and wire it for under $800. Even if it took more than 10 years to pay off, just the thought of being self relient from DTE would make it worth the extra cost.
Craig Lounsbury
Tue, Sep 20, 2011 : 6:26 p.m.
"2.7 kilowatts peak" what does that mean? what is the time frame in that reference?
Mark Hergott
Tue, Sep 20, 2011 : 5:18 p.m.
A 270 watt solar panel can be ordered from The Home Depot for $579.00, a 2800 watt grid tied inverter would cost $1,379.00. So, ten panels and a grid tied inverter would cost you $7,169. The cost of brackets, wiring, and such would push you close to ten grand. 2.7 kilowatts peak would probably pay you back in about ten years.
grye
Tue, Sep 20, 2011 : 1:26 p.m.
Just think of the additional savings should he install a wind operated generator.
Craig Lounsbury
Tue, Sep 20, 2011 : 1:15 p.m.
Its worth noting that someday in the next 20-30 years at most, the house will need a new roof and at that time 55 solar panels removed and reinstalled won't be cheap. It will add a considerable cost to the new roof....in the thousands not the hundreds I would venture. And hopefully in the interm whatever fasteners are holding those panels on the roof (penetrating the roof system) won't spring a leak.
Kevin
Wed, Sep 21, 2011 : 8:27 p.m.
Craig, a few things: As Mark suggested, the panels *do* help protect the roof. Not completely, but they do more good than harm, or so I was told. That said, I shared your apprehension. However, there are two factors of note. First, those shingles (and the garage addition itself) are less than 2 years old and should have 20+ years in them. Two, the array will pay for itself in 5 years but will continue to produce energy (and provide the DTE SolarCurrents payments to me) for another 15. I stand to profit between $1200-1500 per year for each of those years. More than likely, when it's time to replace the roof, I will not only have banked more than enough money to cover it, I will likely also be wanting to replace my 20 year old panels that are 19.1% efficient (best on the market in 2011) with the likely 40%+ efficient panels that are available in 2031. There's very little risk involved due to the fact that I will be receiving actual, physical payments from DTE. Additionally, the panels are guaranteed to provide 90% of their rated output after 12 years and 80% of their rated output after 25 years. Additionally, the inverters are warrantied for 15 years. I suspect there will be a few maintenance costs with the inverters but insignificant when compared to the financial income. I hope that helps!
Craig Lounsbury
Wed, Sep 21, 2011 : 3:12 a.m.
the "issue" is simply that they are installed over a limited life product and will have to be uninstalled when that limited life product eventually fails. The issue isn't with the install just that the product underneath someday will fail. And when the roof fails you can't ignore it. Its just a fact.....unless those solar panels actually replace the shingles rather than hoover over them.
whatsupwithMI
Wed, Sep 21, 2011 : 12:36 a.m.
I'd be more even impressed, Craig, if you had first hand knowledge that there would be an issue with the install....
Craig Lounsbury
Tue, Sep 20, 2011 : 6:04 p.m.
You'd have a point if the panels laid flat on the roof thus replacing shingles and went to the peak . Clearly they don't go to the peak in the picture so unless they are replacing a shingled roof by laying flat on the deck then water will get behind the panels. Do you know that they lay flat on the deck and no roofing is required under them? If that is the case I retract my concern. Otherwise if they sit above the shingles water will get under them and the roof will deteriorate. looking at the admittedly small picture those panels look like they sit above the shingles a bit. I'm willing to be enlightened if you have first hand knowledge about how those panels were installed.
Mark Hergott
Tue, Sep 20, 2011 : 4:53 p.m.
Actually, the panels preserve the roof underneath them quite well, greatly extending the life of the roof. Think about it. The sun does not beat down on the roof, and the rain does not get to the roof either. Granted, the areas of the roof at the edge of the panels will age. But to patch those is much cheaper than a whole roof tear down.
Craig Lounsbury
Tue, Sep 20, 2011 : 1:05 p.m.
"The bottom line — after taking out a loan for $82,000 to purchase highly efficient solar panels, the total out-of-pocket cost came to around $24,000. " I ain't the brightest bulb in the chandelier, can somebody clarify those numbers?
Kevin
Wed, Sep 21, 2011 : 8:18 p.m.
Craig, I'll expand for you: The retail cost of the panels/inverters was $82k. There's a 30% tax credit (-$24,600) and DTE covered $2.40/watt (-$31,680). I had estimated the out of pocket at $24k when I was talking to Tom. It was actually just over $25k. I hope that makes it a little clearer.
Gordon
Tue, Sep 20, 2011 : 12:53 p.m.
5 year pay-back is great. Whenever I have looked at it the pay-back was too long to make sense. Certainly the advantages were knowing all the different sources of money available, the study done by the grad students, and the solid business plan of the Corner Brewery and others. Would be nice if more Public information was available in one spot for more businesses and possibely home owners to learn & apply to their situtions. It's risky business because the technology is changing; but one did have have to own a 486 computer system to be able to operate a WIN 7 system or a MAC. First thing comes to my mind are Condo developments which could possibely have a large impact on the cost & the energy savings. They are basically structured like a business.