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Detroit Rocks for Solar Power Incentives Too

Photo:Flickr/ karpov the wrecked train

It’s really nice that we’re SolarPowerRocks.com and that we have the opportunity to praise the Rock ‘n’ Roll City of Detroit and its utility, DTE Energy, for launching a solar incentive program.

Contrary to popular belief, solar works great in cold weather. In fact, solar panels work better in cold temperatures. What matters with solar is the amount of light that hits the panels, not heat. That’s why it’s great that customers in Detroit, Ann Arbor, Flint, Livonia, and pretty much any city in the thumb of Michigan can benefit from some awesome solar incentives from DTE Energy.

The incentives come in 3 parts:

  • First, you get an upfront cash rebate of $2.40/watt. How much that works out to for you depends on the size (the number of watts) of your solar power system. If you have an average 5kW (5000 watt) system, that multiplies out to $12,000 off the top of your up front costs. Again, you might get a lower rebate if you need fewer solar panels to cover your energy needs. Of course, your costs are lower as well.
  • Second, you get a production incentive. This is similar to a feed in tariff. Essentially, DTE pays you 11 cents for every kilowatt-hour (kWh) of solar power that your system produces. For the same 5kW example above, that adds up to an extra $610 in your pocket every year, give or take. (We’re assuming average Detroit rain, snow, good roof orientation, etc.)
  • Third, like all Americans, you qualify for the 30% Federal tax credit. On a 5kW system, that could mean reducing your net cost another $6,900.
  • Bottom line, with the production incentive, the upfront rebate, and the Federal Tax credit,  your net cost for an average 5kW system is around $6,000 when it’s all added up.

Of course, I haven’t added in net metering and the electric savings over the next 25 years, which will more than make up that $6,000 cost.  To find out how much specifically for you, you really need to get a free estimate from a local installer.

Last modified: May 16, 2019

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Tor a.k.a. "Solar Fred"Tor a.k.a. "Solar Fred"ECD FanNonScalableDan Hahn Recent comment authors
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ECD Fan
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ECD Fan

To Solar Fred: The default PVWatts assumes a derating factor of just 0.95 for snow/soiling. If you read the documentation, you will learn that 0.95 is not realistic for the Great Lakes Area and other snow-inflicted areas. Here is what NREL says about about Minnesota, for example: “Snow remains the longest when sub-freezing temperatures prevail, small PV array tilt angles prevent snow from sliding off, the PV array is closely integrated into the roof, and the roof or other structure in the vicinity facilitates snow drifting onto the PV modules. For a roof-mounted PV system in Minnesota with a tilt… Read more »

Tor a.k.a. "Solar Fred"
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Tor a.k.a. "Solar Fred"

Even considering all of your assumptions are correct, ECD Fan, and I’m not saying they’re not, a $2400/kW rebate ain’t chump change, so you will get a significant up front rebate, PLUS whatever you can get out of the 11 cents/kWH production credit, PLUS the 30% tax credit AND any tax write-off from the mortgage loan. Oh, yeah. And the solar portion of your electricity needs costs you nothing beyond the loan payment. And don’t forget that winter is only a quarter of the year! So yeah, there are going to be snow days, but don’t forget spring, summer, and… Read more »

ECD Fan
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ECD Fan

Solar works great in cold weather, but it works horribly under snow and produces 1000 kWh/kW a year at best in locations such as Detroit (for comparison, solar can get to 1700 kWh/kW in Arizona). So, add another wasteful spending to the long-suffering Michigan ratepayer/taxpayer!

Tor a.k.a. "Solar Fred"
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Tor a.k.a. "Solar Fred"

ECD, don’t know where you get your figures from, but we got ours from a fairly reliable solar software that estimates an average of 462.5 kWh produced per month (5550/year) for a 5kW DC STC system in Detroit. We believe this software is based on PV Watts, the clunky but industry standard created by the NREL. Because this solar software is well respected in the solar industry, we’re going to stand by those figures.

NonScalable
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NonScalable

If that production incentive can stay in-place for 10 years then that last $6000 is paid off. That leaves some 15 to 20 years of free electricity for the investment cost of a battery bank and charge contoller.
More than likely the production incentive will go up as fuel increases in price; that means the power company (over the next 10 years) may turn into a ‘network maintainer’ more like an IT industry rather than electricity supplier.

Dan Hahn
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Dan Hahn

Great suggestions Susan, thanks!

Susan Kraemer
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Susan Kraemer

Wow, couldn’t happen to a more deserving city/state. Detroit really paid hard for the hard landing at the end of the age of fossil-fueled behemoths. Detroiters had no power over the Big Three to make autos efficient. One suggestion, Solar Fred: instead of saying rebates are $2.40 a watt, call it $2,400 a kilowatt, because then people understand it better as a serious chunk of the thousands that they will spend on the solar system. Also, because, from my experience, people get confused with monthly tariff payments when it’s just a dollar or two. The rebate is a lump sum… Read more »

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