The Big Push: What Drives Solar Markets?

February 11th, 2013

Let's start the day off with a brief educational lesson, shall we? The image shown below is a global insolation map.  What it describes is the total average amount of 'peak solar activity' that strikes any region of the world during a typical day. The lighter regions towards the earth's poles receive less sun per day, while the darker red regions near the equator receive on average the most amount of sun per day.  In other words, It gets really sunny around the middle, Africa, the Middle East, and Central America. Have you ever wondered why there isn't more solar electricity production in regions with the most sun? It would make sense, right? The reason why this is not the case goes beyond just a simple matter of placing panels where it's sunny. I'll explain below. :) 

World Insolation Map. (Source: www.oynot.com)

Do you know which country has the highest solar capacity in the world? The answer is Germany. They are the world's leader in newly installed solar panels, and have the highest amount of their nation's electrical needs come from solar electricity, among world solar leading countries. The United States, despite our enormous push over the last few years to build renewable resources, ranked only 5th in new installations by the end of 2011.  And the reason for this has nothing to do with how much sun is shining on Germany. In fact, our beer drinking buddies receive about the same amount of sun per year as typically seen in the pacific northwest states of Washington or Oregon. Germany's success in renewable solar electricity is a result of an aggressive and popular government policy.

Source: World Energy Outlook 2012

In the 1990's, there was a strong push in the German government to go green and produce more electricity from renewable sources. Laws were changed to make it easier for citizens and businesses to build solar on their rooftops, and feed-in tariffs were enacted so individuals could sell their electricity back to the utility at a set price for several years. The resulting effects from the law changes made it financially advantageous for people to use solar power. Other big moves like providing money for renewable energy research, and setting goals to eliminate nuclear power have driven up the solar market and dramatically reduced solar panel and installation prices within the country. Despite our recent successes in solar in the U.S., we are still in an infancy stage of growth, and therefore much more progress must be made to bring us to the next level of renewable energy capacity. New policies that favor growth in the renewable sector must be pushed forward, and soft costs like permitting restrictions, interconnection requirements, and legal paperwork must be made cheaper, streamlined, and more available to the public. These will all eventually happen, but the sooner they are put in place, the better it will be for the public.

Finally, there has been a great deal of skepticism as to the cost of solar, the feasibility, energy storage, and overall plausibility that it could be a major source of electrical power generation. Also that the role of government in driving solar should be limited, relying on free market policies to do the majority of the work. I believe the biggest evidence of proof that government can play a positive role in solar energy is the drop in price over the past few years. Since 2006 the cost of solar has dropped more than 50%. And experts suggest there is still much more room to lower costs in the future. The same certainly cannot be said about the price of gas, which has more than doubled in the last 4 years.  As for limited government roles in energy policy, the federal government is currently subsidizing an estimated $10-52 billion dollars annually for fossil fuels, an amount that far exceeds what is currently provided for solar and renewables. At current price trends, if solar were to be placed on a level playing field as fossil fuels, it would be cheaper for everyone to switch to solar electricity.

Tax Subsidies for Fossil Fuels far outweigh current Federal Solar Funding (Source: peswiki.com)

Thanks for visiting, I hope you enjoy the reads and continue to support our push for solar energy as a major player in global electricity production. For further news links and information, please visit www.risingphoenixsolar.com. Have a sunny weekend!

The Sunnier Side of Solar: Visit to Cabo San Lucas

January 30th, 2013


I recently returned from a family vacation to Cabo San Lucas, Mexico, and I could think of no better opportunity to talk about foreign investment in solar than discuss my trip! I will warn you there, there is a ton of relaxing, sun soaking, delicious food, and entertainment! So sit back and enjoy! :)

The Baja Region of California receives nearly 5 peak sun hours per day (above top), making it an ideal region for taking advantage of solar. Not to mention the beautiful weather with few clouds to hinder solar output (above bottom)

My journey began early Wednesday morning, on January 16th, with a 5:20am flight to Philadelphia to meet my sister for our connection to Phoenix, and then San Jose Del Cabo. Unfortunately, bad weather slowed our departure, and after a long day of flying to Philly, Charlotte, then Ft. Lauderdale, we finally reach Phoenix only to be too late to make any Cabo flights, so we lost a day. But we weren't about to let it hinder our spirits. By mid afternoon the next day, we were already relaxing on the beach in Cabo!



Mexico currently leads Latin American nations in solar output, with a total capacity of 37MW as of 2011. Although this number is relatively small compared to the US, it does show that our neighbor to the south is proactively involved in renewable energy for their country. As I toured both towns of the cape (San Jose, and San Lucas) I made sure to keep my eyes peeled for any sign of renewable energy. Cabo has exploded over the past 10 years, almost exclusively due to the tourist industry, and the large resorts and hotels should be an example of clean energy in the region and invest in solar to subsidize their electricity usage, hot water for the swimming pools, washing linens, and open building designs to maximize sunlight during the day. Many of the beach side resorts already are built with an open feel in mind, but I was hoping to see more solar installed on buildings. While out in the bay of Cabo visiting the Arch of Cortez, I scanned the harbor and saw only one hotel that clearly had solar on their rooftops, Casa Dorado Resort and Spa Cabo San Lucas. That doesn't mean there aren't several other hotels that have invested in renewable energy, but in downtown Cabo, this was the only one visible from the water. I also did some investigation through google maps to see any rooftop arrays, but the most recent photos are outdated and do not accurately reflect what is potentially there today.

(Above Top and Bottom) Solar hot water collectors on the rooftop of Casa Dorado Resort and Spa, Cabo San Lucas

I also spoke with the manager of the Grand Mayan Resort and Spa, in San Jose Del Cabo, to inquire about their renewable energy goals, as I had heard that they receive 30% of their electricity needs from renewable sources. They informed me that while that may be the case at some of the other Grand Mayan Resort locations, they did not currently meet this goal in San Jose. He did, however, mention that they do have a very strong recycling program to reduce waste. This is a great start, and I hope they continue to push for more green alternatives!


Needless to say, I had a wonderful time, but I was happy to be back home in North Carolina, despite the cold weather (it was 80 and sunny every day of my vacation).  I hope that if I do visit there again, I will see a much higher capacity of solar installed in the region. With so many of the large resorts being US-based, it is important that in business we represent a strong example of environmental responsibility to other countries. Investing in solar is EXACTLY the way we can do this! Stay warm everyone!

Beaufiful beaches and peaceful scenery make Cabo a great travel destination

The beautiful Arch of Cortez, A highlight marker of Cabo San Lucas

My family (sister, Carolyn, and mother, Shari) and I enjoying a walk around the harbor of downtown Cabo San Lucas

Farm Risk Management Through Renewable Energy

January 11th, 2013


Farm Development Now (http://www.farmdevnow.com/welcome.html) presented 'Risk Management Through Renewable Energy and Crop Insurance' today at the McKimmon Center in Raleigh, drawing a crowd of approximately 300 farmers, particularly African American and Native American farmers to participate in workshops for renewable energy, crop insurance, and farm financing. Several exhibitors were present to assist farmers, including NC Solar Now, Yes! Solar Solutions, Future Farmers of America, and several farm loan and financing agencies. The worskhop was free to attend.

The opening welcome session was chaired by Dr. Mark Little, Acting Program Director, Economic Development at the Kenan Institute of Private Enterprise at the University of North Carolina, Chapel Hill. Anthony Locklear, Executive Director of Native American Interfaith Ministries, and Rosalind Gray, Esq. Founder of the Sun Farmers Institute, also gave opening speeches. The room was then divided into groups and attended workshops for Renewable Energy Projects on the Farm, and Farm Loans and Crop Insurance. I attended both, but for the purposes of this blog will discuss only the Renewable Energy Workshop. 

NCSEA Director Paul Quinlan Addressing the Farmers at Todays Solar Workshop.

The Renewable Energy Workshop was presented by Dr. Reginald Parker, CEO and Founder of 510nano, a minority owned green solar development firm, and Time Webb, CFO of 510nano. The aim of the talk was to educate rural farmers of alternative methods of producing income through renewable energy use. Over the past few years solar farms have been experience an economic boom in North Carolina, thanks to the state's generous renewable energy tax credit program, and several farmers throughout the state have been able to reap the benefits of it, coming as much needed relief during past droughts, poor farming techniques, and the decline in demand of the tobacco crop. The basics of several renewable systems were presented, including solar, wind, geothermal, and biomass, and helpful and insightful ideas on how to monetize resources to create a stable income. At the end of the talk there was a Q&A session where attendees could ask several questions, some of the most common concerns were the profitability of solar farms, how to interconnect electricity to the grid, and how to obtain proper financing to build proper solar infrastructure onto their land.

A free luncheon was provided during the event for all attendees.

The day concluded with some last remarks by representatives from local finance companies, Melissa Malkin-Weber, Self Help Credit Union, Rick Larson, Natural Capital Invesment Fund, David Thigpen, USDA Rural Development, and closing remarks by Rosalind Gray, Sun Farmers Institute The workshop plans to meet again in April to provide more assistance for renewable energy for farms and further educate farmers in North Carolina.

What you need to know about Solar Tax Credits: Part 2

December 16th, 2012


Part 2: North Carolina State 35% Solar Tax Credit


Living in North Carolina is a great advantage for those interested in solar. Not only do you get to benefit from the Federal Solar Tax Credit that I discussed in Part 1 of this series, you also can take advantage of our state solar tax credit, one of the most generous and aggressive renewable energy programs in the country. In this part of the tax credit series, I will go over the basics of the tax credit for both residential and business use, and how you can best take advantage of this great (and limited!) opportunity. 

Combining federal and state tax incentives can save individuals nearly 80% off solar systems

I'll begin by going over the residential tax credit for solar (and other qualifying renewable) installations. It is available until January 1st, 2016, so you have some time to review the details if you need to.  You also receive an 80% abatement on the property tax value of the installation, so you shouldn't have to worry about a heavy increase in your property tax if you build on your home. There are some rules that must be followed in order to qualify for the residential renewable tax credit. The first, and probably the most obvious, is the solar array MUST be installed in North Carolina. The tax credit is spread out in 7% increments over 5 years. You can apply the tax credit towards personal income tax, gross premiums tax (this is a tax on insurance companies), or franchise taxes. Additionally, the tax credit may only be applied to 50% of your tax liability. In other words, if you have a tax bill of $10,000 at the end of the year, you may only apply up to $5,000 in credits against what you owe. Because of these rules, the numbers become tricky, and typically unless you make above a certain income level, the tax credit will do little to assist you in building a solar system. There are also some caps on how much you can receive in tax credits, based on the type of system you would install. They are as follows

– $1,400 for solar thermal or hot water heating, including swimming pools
– $3,500 for solar active space heating, combined active space and domestic hot water systems,
and passive space heating;
– $8,400 for geothermal heat pumps or equipment
– $10,500 for solar photovoltaics, wind, or other renewable-energy systems


Now that we've gone over a few of the rules, let's crunch some numbers in an example:

You decide to build a 5 kilowatt solar photovoltaic array on the roof of your home. The cost of the array is $25,000. Applying the 35% state tax credit would result in $8,750 (that's $25,000 x 0.35) in tax credits spread out over 5 years. For each year, you would receive $1,750 in tax credits. Now remember, this is a credit, and by law you can only apply it against 50% of your annual liability. So in order to take the full $1,750, you must owe at least $3,500 in state income tax to take the full amount of the credit. At the current rate of about 7% state income tax rate, you will need to make an income of at least $50,000 annually to take the full credit. Typically this minimum amount is not a problem, as most people who are willing to spend $25,000 on solar will make more than this annually. Still, it should be considered so you know exactly what is available to you.

Now the state credit is federally taxable, so Uncle Sam is going to look at your tax credit as income and will want its share of the money coming to you. This is an unfortunate ruling by the IRS, but it must be paid. The amount owed will be based on your tax rate. So if you are in the 25% federal income tax bracket, using the above example you will owe $437.50 each year you take the $1,750 tax credit to the federal government. By the time you've gone through 5 years of collecting that credit, your original $8,750 in state tax credits will really only be $6,562.50.

Wow. That was a lot of math. I apologize if there was any confusion over this, but once all of this information can be deciphered (most likely by an accountant), you can combine both the state and federal tax credits and see quite a large savings in your solar system purchase!

Apple Inc.'s large scale solar farm in Maiden, NC

For the corporate tax credit, many of the same restrictions apply to the general qualifications of building a solar array, but the cap on system installations is raised to $2.5 Million dollars. Because this value is so high, there has been a nice boom in large solar farms in the state over the past few years. Companies with large tax liabilities will typically build solar farms, connect to a utility grid in either Duke or Progress Energy territory, and sell the electricity back to the utility for a profit. Unfortunately, because these numbers are in the form of tax credits, you must be a very large and very profitable company within the state to be able to have this lucrative opportunity! This, in my opinion, was one of the major flaws in the state tax credit when it was enacted. It is heavily in favor towards large profitable companies, but quite restrictive in promoting growth in residential or small business solar installations.

DSIRE Renewable Database (www.dsireusa.org)

The Database of State Incentives for Renewables & Efficiency (DSIRE) was first developed in 1995 and is based in the North Carolina Solar Center. The site is a great tool if you wish to learn more about state and renewable federal incentives. Even if you are not located in North Carolina, DSIRE's database keeps up-to-date information on state incentives throughout the country. Please click on the link and check out what is currently being offered in your home state. In addition to government programs, there are several incentives, grants, and rebates offered by utilities and electric cooperatives that you may also qualify for.

This has probably been my most advanced discussion on solar since I started this blog in September.  I've really only covered the surface, and there is much more that can be written, but I also want to keep everything I write as simple and easy to understand as I possibly can, so I will end things on a good note and let you get back to your family for the holidays and enjoy time spent with loved ones. Have a Merry Christmas and a Sunny New Year!

What you need to know about Tax Credits Part 1

December 14th, 2012

The end of the year is almost upon us, and since everyone is talking about tax strategies and fiscal cliffs and federal programs, I feel it would be appropriate to discuss tax credits for solar and how you can use them to help install solar for your home or small business. I will warn you, there will be some numbers and a few details involved, so I will try to keep things plain and simple so that you will have a working knowledge of how you can take maximum advantage of the tax credits and programs available to you. I'm going to divide this up into 2 parts and publish separately so you may take in this information slowly and digest and if you have any questions, don't hesitate to ask!

Knowing all the solar tax credits available to you can save a LOT of money when it's time to file your tax returns

Part 1. The Federal 30% Investment Tax Credit.


The Federal Tax Credit was enacted by The Energy Policy Act of 2005, and provides a 30% tax credit to individuals and businesses installing approved solar systems. It was later amended to also include wind and other renewable energy systems. This tax credit is available until December 31st, 2016, or until congress decides to change the law. After the reelection of President Obama, it is probably unlikely that Washington will prematurely end the program, but who really knows, right? Nonetheless, while it is still available, if you are considering putting solar on your home, this is going to be your best friend.

A very good question I hear from a lot of home owners is "What parts of the system qualify for the tax credit?" It is actually quite a bit, and this comes as good news to everyone. The solar modules, wiring, racking, inverters, power point trackers, batteries, piping, and any other parts or materials needed to complete the installation and interconnect to the home counts towards the tax credit. So does the labor, development, on-site preparation, and any additional installer fees that might be included in the final bill. Things that wouldn't be included, for instance, if you decide to build a ground mounted solar array on a newly purchased piece of land. The purchase value of the land is not included into the tax credit equation. Or if you decide to lay a new roof on your home and then put down a solar array. The roof would not be counted towards the federal tax credit. Still, this is quite a relief to many homeowners knowing they are getting a tax credit for nearly all the cost of a new solar system.

You must remember, though, this is a tax CREDIT. You don't receive a check, the amount is not discounted from your installer's bill. You are still required to pay the full amount due for services. The credit is received on your tax returns the following year and you reduce the amount you owe to the IRS by the credit you received from the solar installation. Let's do an example.

You purchase a 5 kilowatt solar system on your home from your local solar installer. The final bill due is $20,000. With the Federal 30% tax credit, you will receive $6,000 in tax credits which can be applied to your tax returns. If you owe $8,000 in taxes, then you subtract $6,000 from $8,000, and now your tax bill will be reduced to $2,000. This is where you get your money back for the installation.

But what if your taxes are lower than the credit you received? Let's say in the previous example you only owed $3,000 in a single tax year. Unfortunately, you can only reduce your taxes to the maximum of what you owe. The government will not issue you a check for the remainder $3,000 credit. Wouldn't that be nice if they did? What you can do, though, is forward the remainder $3,000 in tax credits to the following tax year. So when it comes time to file for the following year, you may apply the remainder to what you owe against future taxes.

So, if you are anticipating recouping all of your tax credits in your first year, you must make sure you have the tax liability to do so! Otherwise you will be forced to take the credits incrementally until they are used up.


In the next part of this discussion I will go over the North Carolina State Tax credit and some online resources you can use to help find additional tax incentives in your home state.


Merry Christmas!