Solar power proves steady investment for Janesville man
Photo
Photo
JANESVILLE So you want to invest.
Stock? Too wobbly.
Interest at the banks? Scant.
A rural Janesville man has found an investment that appears to work in any economy: the sun.
The sun, which is not expected to burn out for billions of years, spills massive amounts of energy onto the Earth every day. It also puts cash into Chuck Niles’ pocket.
Niles, a retired General Motors worker, said he’s been thinking about solar power for 25 years. He got serious about it three years ago when he learned that improvements in solar technology have reduced the cost per watt considerably.
Then he heard about government programs that provide huge discounts in startup costs.
Here’s how Niles does the math:
The 90 panels on the roof of Niles’ pole barn and nearby shed on Murray Road south of Janesville cost $130,410, installation included.
A federal program known as Section 1603 of the Recovery Act paid him $39,600. The state Focus on Energy program paid him $32,603.
Niles uses about $35 worth of electricity a month in the barn. The rest goes to Alliant Energy, which pays him monthly. The checks vary with sunshine, but Niles estimates conservatively that the checks will average around $440 a month.
In the meantime, Niles is also getting a federal income-tax break from the depreciation on his investment.
When all the costs and benefits are accounted for, Niles figures his payback period is just five years. He figures his return on investment is about 12 percent.
“It’s unreal,” he said.
Even without the two grants, he figures his return on investment would be 4.5 percent, not a bad return these days.
“I don’t have to worry about the stock market crashing,” Niles said. “I joke around and say the only thing I have to worry about is the sun not shining.”
Seriously, Niles figures the only possible down sides are two unlikely possibilities: The cost of electricity goes down, or someone invents a technology that doesn’t require electricity.
While sunshine is free, Niles did a lot of hard work to get his operation up and running. He figures 40 to 50 hours on filling out government forms online. He had to resubmit one set of forms three times. But the payback was the $39,600.
His advice for anyone wanting to follow in his footsteps is to find a good electrical contractor. He went through three contractors before he found one he liked, American Power of Janesville.
The first three either charged too much or wouldn’t guarantee their work, Niles said.
Focus on Energy requires contractors to be certified, so some of those who are certified seem to think they can charge high prices, Niles said.
Niles called a contractor in Colorado who told him the quotes he was getting were too high.
Quality of work is also a consideration: “You’ve got to be careful about finding an installer that knows what they’re doing because you want this up on the roof for 40 years.”
Equipment in Niles’ barn registers data continuously. He can find out every day how many kilowatt hours his panels are cranking out. He even knows how much of a dent his clean electricity has made in his carbon footprint: From May 5 when the first of the panels went online through midday Saturday, he’s accounted for 22,849 pounds of the sooty stuff.
Niles hopes some day to make the information available to anyone via the Internet and to show off his operation to schoolchildren.
Niles, 59, thinks of those south-facing solar panels as an investment, to be sure, but he’s also thinking about more than money:
“I have three grandkids, and the bottom line is, I’d like to leave them something—more than a trillion dollars in debt and dumping oil into the Gulf.”
For more information
-- Chuck Niles was one of many across the state holding open houses Saturday to show their solar, wind and geothermal energy solutions. The Wisconsin Solar Tour was sponsored by The Midwest Renewable Energy Association. Information is available online at www.the-mrea.org.
-- Niles said he’s willing to advise anyone interested in getting into solar power and will show off his operation, by appointment. He’ll even share copies of the government forms he had to file. Call him on his cell, (608) 751-1460.

Oct 12, 2010 at 12:50 p.m.
Suggest removal
Solar jobs created right here in Wisconsin...
http://www.jsonline.com/blogs/business/1...
Oct 6, 2010 at 9:26 p.m.
Suggest removal
janesvillean,
i would rather my tax dollar not go to fund jobs in china -- that's where i'm going.
unfortunately, all of our tax dollars are creating great jobs in china.
Oct 6, 2010 at 9:22 p.m.
Suggest removal
in response to glock21sf,
I recently saw on PBS a UW University place lecture, and the speaker (an expert in the field of solar cells), I will paraphrase, "with the current state of technology of solar cells and the cost of grid purchased power, the cost of the equipment and installation is never recouped."
He was hopeful that the situation would improve in the future, but some of the materials used in the solar cells are rare and in sometimes not friendly countries, i.e. central Africa.
He based his calculations on a 30 year life span of a typical solar installation.
He seems authoritative enough for me to take him at his word.
From my personal viewpoint, it must be tough to get solar energy at this latitude, and considering the paucity of sunshine during a Wisconsin winter.
Oct 6, 2010 at 3:31 p.m.
Suggest removal
As a living, breathing human being and, as such, dependent upon the earth and many of it’s natural processes for my very survival I will support and promote the use of whatever “future technology” solves our energy demands whose principal or waste product does not have the potential to exterminate life as we know it, should said “future technology” seep or escape in to our environment. Gee TCB, I guess that makes me an “envirologue “ but then I don’t believe most intelligent life would consider that an extreme view. By the way, you didn’t give Mr. Rosen credit when quoting his text.
Oct 6, 2010 at 2:25 p.m.
Suggest removal
Janesvillean,
Windmills, solar, photovoltaic, biomass, etc. may have some long-term potential but currently fall far short of oil, natural gas and coal in their BTU efficiency. Ironically, the most efficient non-fossil fuel energy source is nuclear but is opposed by envirologues, defined as ideologically driven enviro extremists.
Throughout human history, civilizations have routinely faced energy crises. Before we discovered the wonders of petroleum, there was grave concern about the impending depletion of whale oil supplies. In 100 years, we may be faced with shortages of fossil fuels: petroleum, coal, oil shale, tar sands and natural gas. But a recurring lesson of human history is that we tend to solve today's problems with tomorrow's technology — which, by definition, is still unknown. In that regard, I'm confident that human ingenuity will develop a future technology to solve today's energy problems.
Oct 6, 2010 at 1:16 p.m.
Suggest removal
booch11, that is hardly surprising. China is investing in this technology; we are apparently investing in buying from China. That's a tragedy. I'm not sure where you're going, but the answer is clearly not to withdraw the subsidies. We still have ongoing energy needs that we have to meet. Only if there is a domestic market for solar will there be a domestic solar industry.
.
TCB, I hope you do realize that if there is a break-even point AT ALL, then the "most expensive" option is NOT solar. The most expensive option is doing nothing at all and hoping energy costs don't rise. That said, doing nothing has a zero cost, and solar has an initial capital outlay that is difficult to afford without incentives. That does not change the fact that it is more expensive in the long run to continue to use conventional power.
Oct 6, 2010 at 9:53 a.m.
Suggest removal
Gravity.
Your calculation of a 6 year break even seems reasonable and yes, I understand there is an accelerated depreciation schedule for solar (5 years-I believe). Rather than going into arcane accounting vernacular-solar is very expensive and without govt incentives consumers do not freely chose this option. Nor is this investment paying him 4.5% today.
That being said, its his money-he is free to spend (or invest) as he chooses.
Oct 6, 2010 at 9:39 a.m.
Suggest removal
I have some mono crystalline panels that just turned 28 years old. With the PWM charge controllers that have been around ,it wasn’t worth investing in more panels. April of this year I bought a Tristar 60 amp MPPT charge controller and wired it in. Yeah,….. I went out and bought another 1.5 kwhs of blue glass. The controller has a computer in it, and it claims to have given me 660 KWHs so far. Theres no accountants inside the box fudging the numbers, so I feel the numbers are correct.
Electric Service for 08/29/10 to 09/28/10 (30 Days) - 109 Heating Degree Days / 121 Cooling Degree Days
Electricity Used
Meter Number: 0000000000
Actual Reading on 09/28/10 78120
Actual Reading on 08/29/10 77528
Total Electricity Used 592 kWh
Next Scheduled Meter Reading Date 10/28/10
Current Electricity Charges
Residential Electric Service - RG1 30 Days
Facilities (30 days x $.250000/days) $7.50
State Low-Income Assistance Fee $2.66
Energy (592 kWh x $.126110/kWh) $74.66
Fuel Cost Adjustment (592 kWh x $.002510/kWh) $1.49
Point Beach Credit (592 kWh x $.006180-/kWh) $3.66 CR
Subtotal Electricity Charges $82.65
Sales Tax ($79.99 x 5.60%) $4.48
Total Electricity Charges $87.13
________________________________________
My old school math tells me I’m paying more than .13cents a kwh.
MPPT is the ticket. I purchased all my solar needs from Arizonia. This site will explain what you don’t know about solar panels.
www.solar-electric.com/charge_controls/m...
ecar96kw
Oct 6, 2010 at 7:03 a.m.
Suggest removal
http://www.nytimes.com/2010/10/05/scienc... Historically, when the military is involved in a project, it goes mainstream quite nicely.
Oct 5, 2010 at 5:23 p.m.
Suggest removal
Alliant does pay you the same rate they charge you. According to their webpage rates are $.12/KWH in the summer and $.10/KWH in the winter. Customers can voluntarily pay time of day rates, which are $.19 during the day and $.05 at night. Smart business for solar producers since the sun typically shines during the day.
An array this size should produce 2500 KWH per month based on statewide insolation averages. Our little corner of the state may be slightly better than that.
Oct 5, 2010 at 3:41 p.m.
Suggest removal
booch11, as long as you realize that! ; )
Oct 5, 2010 at 3:36 p.m.
Suggest removal
janesvillean,
realizing you are the smartest person in the room, did you know that the majority of the federal dollars subsidizing the solar panel industry have indeed created lots of jobs IN CHINA.
according to the dept of energy, $2.3 billion in green manufacturing credits went to china, south korea and spain. "Chinese manufacturers in particular have taken the lead in creating renewable-energy components" thanks to stimulus funding.
and this from a wsj report, "despite the massive infusion of federal spending, renewable technologies have captured only a tiny share of the energy market and remain heavily dependent on government funding to be viable. Because of the need to constantly renew government funding, private investors remain skittish about committing to new projects."
green jobs have always needed government backing bringing new meaning to the word sustainable.
Oct 5, 2010 at 2:47 p.m.
Suggest removal
I think Alliant is about .07/KWH and I'm assuming they buy back at the same rate they charge?? If that is true, his panels are putting out an average of 6428KWH/month. And, not 120V but he would be using an inverter with a 240V output.
Oct 5, 2010 at 2:07 p.m.
Suggest removal
Hard to believe that those panels produce $450 a month worth of 120 volt AC for use by Alliant. Is there a figure available showing KWH produced by this system, say in a month of normal sunshine.
Oct 5, 2010 at 1:17 p.m.
Suggest removal
TCB, the rest of the return comes from the fact that this is a depreciable asset and the government allows an a pretty favorable depreciation schedule. Factoring in that and 7% inflation on electricity (from National CPI data), I calculate a 6 year payback and 8% annualized ROI. My numbers are based on statewide average insolation. He, presumably, has some actual data for his specific site that allows him to be more accurate than me. So I don't think his numbers are too far off.
Also, can you point me in the direction of a stable investment that returns 4.5%? I have a kid who needs to go to college someday also.
I'll share my calculations with anyone who sends me a PM.
Oct 5, 2010 at 12:38 p.m.
Suggest removal
Sorry I meant to write note but I wrote not. It should say “On that same note why don’t we cut out the subsidies to the oil industries, coil industries, and industrial farms.”
Oct 5, 2010 at 12:02 p.m.
Suggest removal
Janesvillean, I thought you guys say tax cuts are government spending.
Oct 5, 2010 at 11:57 a.m.
Suggest removal
NoLeftist: On that same not why don’t we cut out the subsidies to the oil industries, coil industries, and industrial farms. When you run a small business if you cannot succeed then you go out of business in a large industry you simply get a government subsidy. Remove all of them and then see which are truly viable companies!
Oct 5, 2010 at 11:55 a.m.
Suggest removal
I'd like to see how he determines that his investment is producing a return. His net out of pocket is 58K and he earns approxomately 5200 from Alliant energy. 10 year minimum to break even. That is assuming NO return on 58K spent to feel good about solar.
If he were to invest 58K at 4.5% over ten years never touching the principle he would have 90K-a 32K gain---not too bad. 58K invested for 10 years compounding interest anually at 12% return (his number) = 180K---again assuming that he does not touch the 58K principle...a $122K gain...a very nice return on investment. That 122K less 20% for income taxes would leave a nice college fund for his grand kids but instead they will have a solar barn which may or may not be worth the price paid for solar installation.
In full disclosure I have no problem with this man spending his money they way he wants to. He could put it all on black in Vegas for all I care. However, this article leaves too many facts out and is utterly misleading in the sense that it does not "prove" that investing in solar panels provides a return on investment...unless it proves that there might be positive cash flow after 10 years.....the costs of the system are objective and the benefits are wholly subjective.
Oct 5, 2010 at 11:37 a.m.
Suggest removal
If solar energy was viable economically, the lefties should have no problem cutting off such subsidies given that they are 'corporate loopholes.'
It isn't, and they don't.
And tax credits do cost money - they represent forgone revenue! To hear such stupidity from the same class of idiots that say that tax cuts 'cost' the government money is the height of hypocrisy.
Oct 5, 2010 at 11:19 a.m.
Suggest removal
booch11, and virginia_badger, the point of the spending is not just the jobs, it is the future energy savings. It's also ridiculous -- I mean, laugh-out-loud ignorant, really -- to say these jobs are only possible because of the subsidies, because many, many polluting industries receive government subsidies of one kind or another, yet somehow it is only this type of program that is attacked.
.
The money, by the way, is for the most part NOT in the form of cash given to someone from a taxpayer fund, it is in the form of tax CREDITS. I thought all you types loved a good tax cut. Well, guess what -- this is one way to get one. If you count this tax cut as increasing the debt, well, then you should count the other tax cuts as increasing the debt as well (when Congress debates them they are supposed to by law, but you don't hear it much in campaign ads).
.
Now, that 14-year-old who invented a special type of solar cell? I suppose he's been kidnapped and taken to the same desert isle as the guy who invented the car that ran on water. Seriously, though -- just because you can build something for a science fair does not mean you can scale that to industrial production and make it cost-effective to build or sell. The engineers in the solar industry are making improvements all the time. The problem with this sort of engineering is that all the easy wins come early. The more mature the technology, the harder it is to squeeze even a tiny improvement out (sometimes, unless you're able to do it on a vast scale, but even that doesn't always help).
.
We have to accept the fact that the Laws of Thermodynamics, in particular, and physics generally, make the conversion of potential energy into kinetic energy difficult and costly in terms of efficiency. Even the best internal combustion engine in the world may not exceed 50% efficiency in converting all the *potential* energy in a gallon of oil into *kinetic* energy of forward motion. We don't notice that as an issue, though, because we only measure how many gallons we use, not how efficiently we burned it.
Oct 5, 2010 at 9:47 a.m.
Suggest removal
Unfortunately, the subsidized portion comes out of future tax payers pockets. More debt.
Oct 5, 2010 at 8:29 a.m.
Suggest removal
I love the part about Allient Energy sending him a check each month.
Oct 5, 2010 at 6:36 a.m.
Suggest removal
booch... did you read the part about 4.5% return w/o gov? did you do any research about solor energy? maybe you would find how goverment subsitides have made germany the world leader in solar cell tech and lower cost to fraction of what it was just a decade ago.. or that spain is so far ahead of us that they are building mega sized solar power pants in the south west.
Oct 5, 2010 at 12:41 a.m.
Suggest removal
Here's the kicker. A few years ago a 14 year old boy designed and built a new kind of solar cell. It worked and generated power efficiently. More importantly, it worked and generated electricity an night. It made power from the photons in the invisible spectrum of light as well as the visible spectrum. Power production 24 hours a day. Has anybody heard what ever happened to that kid or his advanced solar cells?
I believe he displayed them at a science fair of some sorts.
Oct 5, 2010 at 12:16 a.m.
Suggest removal
the only way these so-called "green" jobs are sustainable is through GOVERNMENT GRANTS. sad but true.
Oct 4, 2010 at 10:58 p.m.
Suggest removal
so what did Mr. Niles do to ensure that his building would hold the additional weight of the solar panels, or did he just blow it off? The City of Janesville requires a structural analysis and some contractors are just installing these without any review if they can get away with it. I don't know any metal building supplier that builds a building to withstand the additional weight. Can't wait to see this building with 12 inches of wet snow on it!!!
Oct 4, 2010 at 10:22 p.m.
Suggest removal
without investment there is not growth. demand will drive research and volume and then you get lower cost... DUH !
Oct 4, 2010 at 9:44 p.m.
Suggest removal
There is no such thing as a one-size-fits-all break-even period for solar. It varies considerably based on the sunlight availability, the cost of electricity in a given period, the electricity needs of an installation, the ability of an installation to sell excess back to the grid and/or store it for off-peak use, and so forth. What is true right now is that there are more options for solar than ever, efficiency continues to improve, and the incentives are there to make the initial investment. If you know you'll still be in your house ten years or more from now, it's most likely a good investment. If you're moving in 3-5 years, don't do it, because you just won't get your money back, incentives or not.
Oct 4, 2010 at 7:42 p.m.
Suggest removal
I looked into the cost of solar several years ago and the breakeven point was around 15 years even WITH the government incentives. Maybe costs are lower now and incentives higher??
Oct 4, 2010 at 7:38 p.m.
Suggest removal
Senator Reid has hooked us up with a lot of solor power in Nevada. He has been the pacesetter in this area.
Oct 4, 2010 at 7:36 p.m.
Suggest removal
In Wisconsin solar would 'break even' after 11 years without all the energy programs and discounts, and tax incentives. If you count the increase in property value in your calculations the payback is somewhere between 1 and 6 years. There just isn't enough data yet to definitively calculate the change in property value more precisely than that.
Oct 4, 2010 at 7:31 p.m.
Suggest removal
Bill6328, what evidence do you have to back up your claims??? I know a Janesville Electrician that is in the solar panel business and he says exactly the opposite. I am a friend and am not in the market for this, so he was not trying to sell me anything.
Oct 4, 2010 at 6:53 p.m.
Suggest removal
Without the discounts, energy programs, and tax breaks, electricity from solar cells never even remotely reaches the break-even point when it comes to the cost of materials and installation.
Solar has mostly been used in remote locations where the existing power grid does not provide service.
Oct 4, 2010 at 4:57 p.m.
Suggest removal
I would love to have solar panels. Thanks for this article and his site and phone number.
Oct 4, 2010 at 4:28 p.m.
Suggest removal
One more thing about this: Mr. Niles told me today that state law forbids any increase in your property assessment for installing solar, wind, geothermal, etc. In other words, the increased value of your property does not mean you pay more property tax.
-- Gazette reporter Frank Schultz
Before you post a comment, consider this:
Note: GazetteXtra.com does not condone or review every comment. Read more in our User Policy AgreementPost Comment
Commenting requires registration.