The Basics
Solar energy technologies convert the sun’s light into usable electricity or heat. Solar energy systems can be divided into two major categories: photovoltaic and thermal. Photovoltaic cells produce electricity directly, while solar thermal systems produce heat for buildings, industrial processes or domestic hot water. Thermal systems can also generate electricity by operating heat engines or by producing steam to spin electric turbines. Solar energy systems have no fuel costs, so most of their cost comes from the original investment in the equipment. The total installed costs of solar applications vary depending on the type of financing used. Solar photovoltaics generally range from $6-$10 per watt installed, or $12,000-$30,000 for a typical 2-3 kilowatt residential-scale system. A solar hot water system sized for a typical home is much cheaper and costs between $3,500 and $8,000 depending on the size and type of the system (above prices exclude any incentives or rebates).
The Northwest receives more than enough sunlight to meet our entire energy needs for the foreseeable future. As the map above illustrates, the Northwest’s highest potential is in southeastern Oregon and southern Idaho; however, there are no “bad” solar sites—even the rainiest parts of the Northwest receive almost half as much solar energy as the deserts of California and Arizona, and they receive more than Germany, which has made itself a solar energy leader.
Photovoltaics (PVs) convert sunlight directly into electricity, using semiconductors made from silicon or other materials. Photovoltaic modules mounted on homes in the Northwest can produce electricity at a levelized cost of 20-60 cents per kilowatt-hour (kWh) before incentives. Incentives can bring the levelized cost down considerably to 10-20 cents per kWh.
PVs generate power on a much smaller scale than traditional utility power plants, so they can often provide high-value electricity exactly where and when it is needed. PVs are often the best choice for supplying power for remote, “off-grid” sites or in situations where the transmission or distribution system would otherwise need to be upgraded in order to meet peak demands. Distribution line extensions of more than half a mile are generally more expensive than investing in a PV system for a typical home.
Other cost-effective PV applications include building-integrated power generation, meeting high summer demand for electricity (e.g., air conditioning), pumping water, lighting signs and powering equipment used for communications, safety or signaling.
Prices for photovoltaics are falling as markets expand. Solar PV demand has grown consistently by 20-25% per year over the past 20 years while solar cell prices fell from $27 per watt of capacity in 1982 to less than $4 per watt today.
Direct-use thermal systems are usually located on individual buildings, where they use solar energy directly as a source of heat. The most common systems use sunlight to heat water for houses or swimming pools, or use collector systems or passive solar architecture to heat living and working spaces. These systems can replace electric heating for as little as three cents per kilowatt-hour, and utility and state incentives reduce the costs even further in some cases.
Solar power is an extremely clean way to generate electricity. There are no air emissions associated with the operation of solar modules or direct application technologies. Residential-scale passive construction, photovoltaic, solar water heating, and other direct applications reduce power generation from traditional sources and the associated environmental impacts.
Utilities in all four Northwestern states offer net metering programs, which make it easy for customers to install solar electric systems at their homes or businesses. In a net metering program, customers feed extra power generated by their solar equipment during the day into the utility’s electrical grid for distribution to other customers. Then, at night or other times when the customer needs more power than their system generates, the building draws power back from the utility grid.
Net metering allows customers to install solar equipment without the need for expensive storage systems, and without wasting extra power generated when sunlight is at its peak. Such programs also provide a simple, standardized way for customers to use solar systems while retaining access to utility-supplied power.
In most net metering programs, the utility installs a special ‘dual-reading’ meter at the customers building which keeps track of both energy consumed by the building, and energy generated by the solar array. The customer is billed only for the net amount of electricity that they draw from the utility, effectively receiving the utility’s full retail price for the electricity they generated themselves.
| Annual U.S. Solar Installations by Technology  Source: Interstate Renewable Energy Council 6 |
Net metering is available from utilities throughout Oregon and Washington, and law requires most Montana utilities to offer it as well. Additionally, Idaho Power and Rocky Mountain Power offer net metering in Idaho in accord with a Public Utilities Commission rule.
Every state in the Northwest offers incentives for solar energy development. Oregon, Idaho and Montana all offer low-interest loans and substantial tax credits for solar systems bought by businesses, individuals or governments. Washington now offers a production incentive of $0.15/kilowatt-hour or more for electricity from solar energy, depending on where the technology was manufactured. Montana and Oregon also exempt solar systems from property tax assessment, while Idaho and Washington exempt solar system purchases from sales taxes. Many local utilities and regional organizations also provide incentives. For example, the Energy Trust of Oregon offers additional rebates and loans to customers of Oregon’s two largest utilities and many utilities offer additional rebates, loans, or production incentives for solar energy systems.
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