Oregon Approves Feed-in Tariff Program

Incentives for going solar in Oregon just got a whole lot better. Last Friday the Oregon Public Utilities Commission approved rules for a feed-in tariff incentive program that is being hailed as the best in the country. The incentive will be introduced initially as a pilot program on July 1st and will pay solar owners up to $0.65 for each kilowatt-hour (kWh) of electricity produced for a period of up to 15 years (specifics on incentive rates are given in the tables below). These payments are comparable in size to the incentives paid to German residents which has made Germany the world's largest solar power producer.

The incentive is available to customers of Portland General Electric, Pacific Power, and Idaho Power. If you are interested you will need to reserve in advance, and there is expected to be a rush of applications come July 1st when the program opens. The pilot program will be limited to 25 megawatts (MW) of solar generating capacity, however, small-scale systems like home solar power systems are favored under the law and allocated three quarters of the total capacity. To gauge the potential success of this program one only has to look to Ontario, Canada, where a similar program was adopted last fall. Since then the solar adoption rates have skyrocketed.

Ray Baum, chairman of the Oregon Public Utility Commission, said this in a news release,

While Oregon may not be the first state that comes to mind when you think about solar, I believe this state has a lot of potential and these pilot projects will show us if we can encourage the use of this renewable resource in a cost-effective way.

Solar owners who decide to take advantage of the feed-in tariff program will still be eligible for the 30% federal tax credit but not the state rebates. However, when we ran some example numbers they still look pretty darn good.

Let's say you install a 6 kW system in Portland, if your installation is in an ideal location you could expected to produce about 6,480 kWh of electricity in the first year. As you are probably aware, solar module electricity production declines slowly over the 20 to 25 year life, at the rate of about 1% annually. Therefore, if we take into account a 1% annual decline, your 6 kW system should produce 90,680 kWh of electricity over the 15 year period that the feed-in tariff program is in effect. With an incentive rate of $0.65/kWh your total payment over the 15 years will be $58,942.

Now considering that the average cost to install a solar power system is about $7/Watt, the installation costs for a 6 kW system will be $42,000. After applying the 30% federal tax credit of $12,600 the total installation cost will be $29,400. The only other cost to consider is the inverter replacement, which will be required after a maximum of 15 years of operation. This piece of hardware carries a warranty of 10-15 years and will cost about $3,000 to replace. However, in 15 years the cost will most likely be much lower. Factoring in the replacement of the inverter brings the total cost to $32,400, which is considerably less than the incentive you will receive.

To find out more about how much you could save, fill out our free evaluation form and we will connect you with qualified Oregon solar installers who can provide you with tailored, no obligation quotes

Feed-in Tariff Rates by Region

 Matthew Ryder-Smith