A sunny outlook

04/01/2008 02:00:00 AM

Soaring energy prices, rebates and the environment drive solar investments

By Vicky Boyd

When Dan Cummings put pencil to paper about two years ago to examine the potential economic benefits of installing a solar-generation system, he ended up with a 7.5 percent return on investment.

Although other investments could have potentially earned the Chico, Calif., almond grower greater returns, Cummings says other factors weighed into his decision to move forward with the project.

“We try to be innovative, and we like to be as efficient as possible with inputs,” Cummings says. “We’re looking at 7 1/2 percent ROI after taxes. It’s not a windfall investment, but I think energy independence is important, and there’s not a whole lot we can do to be more efficient. This is something we wanted to explore.”

Like Cummings, Craig Ledbetter, a third-generation winegrape grower near Lodi, says his family also considered non-economic factors when they evaluated a solar-generation system nearly a year and a half ago.

“Even if we hadn’t gotten the [state energy] rebates, we still most likely would have done it because it’s the right thing to do environmentally,” says Ledbetter, vice president of operations and a partner in Vino Farms. “With the costs of inputs growing, we have to figure out how to slow those inputs down, and this is one of those ways. The tax incentive and rebates make it very worthwhile.”

A handful of states, including California and New Jersey, offer rebates or other incentives to energy users who install solar panels. Visit the Database of State Incentives for Renewable Energy at http://www.dsireusa.org to see if similar programs are available in your state.

An electricity savings account
Cummings and Ledbetter are two of a small but growing number of producers who have installed solar-generation systems in an effort to become more efficient.

Most systems do not provide electricity directly to farms. Instead, they are hooked into to the state’s power grid.

When the sun shines, the electricity that is generated flows past a meter, and the owner receives credit for the number of kilowatts produced. Cummings compared it with making a deposit to your electricity savings account

As you use electricity to pump water or run your irrigation systems, for example, you draw from that savings account. At the end of the month, you receive a bill for the amount you used above what you generated, or you receive a statement saying you owe nothing since you generated more than you used.

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