residential Black Hills On-Site Solar Power Program

PROGRAM FREQUENTLY ASKED QUESTIONS

The following are commonly asked questions regarding photovoltaic systems.

Q. What is solar electricity?
A. Solar electric or photovoltaics (PV) technology converts sunlight directly into electricity. You may be more familiar with PV cells as solar cells that power watches and calculators. But PV can do much more. It can provide electricity for your home and provide the opportunity for you to take advantage of net metering.

Q. Why use PV?
A. The sun generates enough clean energy in one day to provide a years supply of energy for your home. Why not tap into this abundant resource of clean energy? PV preserves the earth's finite fossil-fuel resources-coal oil, natural gas-and reduces air and noise pollution associated with those energy sources. Recent technological breakthroughs, combined with Black Hills's incentive program and Tax Credit programs have greatly reduced the cost of PV ownership. PV system reliability and durability are outstanding - typical PV systems may last 40 years with minimal maintenance.

Q. How does a solar electricity or PV system work?
A. Photovoltaics, also known as PV, produce electricity from the sun. The solar cell is the basic building block of PV technology. Solar cells are wired together to form a PV module. PV systems begin with the solar module. Modules gather solar energy in the form of sunlight and convert it into direct current (DC) electricity. The more sunlight they receive, the more electricity they produce. Solar modules are the heart of the PV system. In essence, they are the power generators. To convert DC power to alternate current (AC) power, the type of electricity used in your home, a device called an inverter is used. Depending upon the size of the PV system, inverters may be mounted by the PV manufacturer right on the back of a PV module. Inverters may also be wall-mounted separately from the PV system, but within close proximity to the solar panels.

Q. Can I "net meter" solar electricity back to Black Hills?
A. Black Hills will give retail credit to solar customers who feed excess electricity back to the utility's grid. Known as "net metering", this utility policy is implemented by letting the homeowner's electric meter spin backwards. Residents can use solar power to off set their energy needs or send excess energy to the grid.

Q. How does Net Metering work?
A. Your electric meter spins forward when electricity is flowing from Black Hills into your home. The meter also records when power is flowing from your home back to Black Hills. That is, if more electricity is generated through a PV system than your home requires, the excess energy flows back to Black Hills's electric grid system, which is measured and applied to your account. At the end of the month, you are billed only for net consumption - the amount of electricity consumed less the amount of electricity distributed back to Black Hills's grid.

Q. What is Performance Based Incentives (PBI)?
A. Production Based Incentives (PBI) is the vehicle used to compensate customers for the renewable energy credits (RECs). The RECs generated by the solar system is captured with the production meter and is totaled at the end of the year and paid out annually. The rate for the PBI payment is found on your reservation agreement and at the time of offering is listed on the online incentive matrix.

For 2011 and 2012, PBI payment term is as follows:

Small Customer Owned category up to 6 kW is paid over a 9-year period.

Small Third Party Owned category up to 6 kW is paid over a 10-year period.

Medium Sized category greater than 10 kW up to and equal to 100 kW is paid over a 9-year period.

Q. How long do I have to complete my installation?
A. A reservation for systems in the Small System category has 6 months to complete from the date of the application submittal. The Medium System category has 12 months to complete from the date of the application submittal.

Q. What are line diagram requirements for the Small Customer Owned category?
A. A simple 1-line diagram is required showing all the major system components including the production meter and the AC disconnect in relationship to the house/utility meter. See the website section on Level 2 and 1-line diagram for additional details. (Level 2 is only required for systems in the Medium category).

Q. What is the maximum system size I can install?
A. For all system size categories, the maximum system size you can install is 120% of your most recent 12 months usage (kWh) history. Your usage history will be reviewed at the time of your application. If your system size exceeds the 120% rule, your application will be declined and you will need to re-apply with a smaller system size.

Q. Can I change the systems size during application and or installation phase?
A. Yes, as long as the change in size does not change more than 10% of the original system size on the application and does not exceed the 120% rule.

Q. Can I change the solar installer company or developer after I have submitted my application?
A. No, the solar company or developer must remain the same as on the original application. If you must change, a new application must be submitted.

Q. Can I make changes to the solar module equipment manufacture or inverter manufacturer?
A. Yes, as long as the system size does not change more than 10% from the original application and the 120% percent rule for total size to historical usage is maintained. Equipment must be UL Approved and listed on the "Go Solar California" approved equipment list.

Q. Why does Black Hills Energy need proof of insurance?
A. This requirement protects both parties if anyone were to get hurt while working on the meter or electrical service to your home or business. Owning a solar system makes you liable if someone were to get hurt, while working on your service or meter, whether it is a Black Hills employee, firefighter, individual or contractor. Systems owned by a third party developer, the insurance should be in the developer's name.

For systems greater than 10 kW, Black Hills Energy needs to be listed as additionally insured because Colorado is a shared liability State where multiple parties can be determined to be "guilty".

Systems at 10 kW or below require a minimum of $300k personal liability coverage. Systems above 10 kW requires a minimum of $2 million personal liability coverage.

Q. What is the Application Deposit?
A. The Application Deposit is designed to promote the submission of applications which have a high probability of being completed. The application deposit will be refunded to the provider if the solar system is successfully completed within the allotted time frame and the installation is approved for interconnection.

Q. Does a customer always have to sign the Application Deposit form?
A. Yes. Regardless of who is submitting the Application Deposit, Black Hills Energy wants to be sure that customers are aware of the program rules, deposit policy and all the implications associated with owning a solar system. All deposit forms and checks should be sent to:

Black Hills Energy
Attn: Solar Program
105 S. Victoria Ave.
Pueblo, CO 81003

Q. What is the process for applying for a solar incentive and to reach completion to allow interconnection?

A. Submit

We have received your online application.

Reviewed

We have received your deposit, deposit form and 1-line diagram (Medium sized systems must also submit a level 2 review form) and reviewed the customer account for payment history and annual usage in kWh.

Approved Reservation

A reservation letter and accompanying agreements are sent to customer/owner of the solar system.

Receive Executed Agreements

We review and execute final agreements

Final review/inspection

Receive proof of insurance and copy of final invoice.

Review of final installation and agreements including the receipt of State or Local Inspector approval. Order anti-islanding testing and meter installation.

Interconnection is completed.

Completed

Your incentive payment and deposit refund is approved.

Q. What are the options for my excess generation or Solar Bank credits?
A. Continuous Roll Over Credits: Any excess generation form your solar system will be rolled over month to month, year to year and held in your "banked energy" account. Your credits will be there for future use until you use them up. If you chose the roll over option, you will never receive a cash out, even if you close your account. Banked energy credits are not transferable.

Year-End cash out: Any banked energy credits in your account at the end of the calendar year will be cashed out at the current cash out rate. The 2011 cash out rate is 3.48 cents per kWh.

Waive Decision Until Later Date: If you chose to wait to make a decision about accepting the continuous roll over, you will automatically default to the cash out option. You can choose the roll over option at any time. To elect the roll over option, you will need to indicate so in writing.

Q. When can I turn on my solar system?
A. Black Hills Energy will turn your system on and leave it on after we perform the anti-islanding test and the bi-directional meter install. It is acceptable to operate the system for several hours after installation to test the system, but not to leave it on. We ask that the inverter is turned on and left on after the commissioning, but with the AC disconnect in the OFF position. This will prevent the system from operating but allow easy system turn on by our meter technician, by only needing to locate and turning on the AC disconnect.

Q. How does the PBI incentive work?
A. For applications submitted after June 1st 2011, all net metered customers will have two meters, a bi-directional (net meter) and a production meter. The production meter reads actual AC power production of the solar system. A check is issuedwithin 60 days after the end of the year for the actual production at the rate determined in the reservation agreement. The net metering will render a net usage bill where the net usage is the total usage you needed taking into account the solar energy that off-set your usage needs during that month.

For example:

Your solar system produces 6,000 kWh in one month.
You use a total of 4,000 kWh in the same month.
Your excess energy of 2,000 goes into a "banked energy" account for future credit.
Your net usage will be zero (0) for the month, since your production was in excess of your usage.
The production of 6,000 kWh will contribute to the annual PBI incentive payment.

Example two:

Your solar system produced 500 kWh in one month.
Your usage for the month was 1000 kWh.
Your total net usage was 500 kWh that month.
Banked energy credits from "prior banked energy" were 100 kWh, available to credit your bill. Net kWh for billing is 400 kWh for the month.
The production of 500 kWh will contribute to the annual PBI incentive payment.

Q. Why is there still a service charge on my bill when I produce more energy than I use?
A. The service charge is a flat monthly charge that recovers the cost of the metering, billing and service. The facility portion of the charge covers the cost of fixed assets, such as distribution feeders and transformers, needed to provide you energy when your solar system in not producing energy.

Q. What is a production meter?
A. A production meter is a standard meter that is set up for payment rather than for billing. It is used to calculate the annual REC or PBI payments.

Q. Do I need to be connected to the grid?
A. Yes, to qualify for a rebate or PBI, you will need to be connected to the grid. While your system may produce most or your energy needs, Black Hills Energy will provide you reliable and seamless energy for periods when your system is not producing such as during the night or during cloudy days when production is reduced.

Example of a 10 kW system PBI calculation for the Small System category:

If a system is over 6 kW, then a ratio will be used to determine the total kWh to use for the PBI payment. Using a 10 kW system that produces 15,649 kWh/year, would receive a PBI based on 6/10 of the actual production or 60% of 15,649 which equals 9,389 kWh x the PBI payment of $.0945 which equals a payment of $887.26.

The rebate portion of the incentive would be paid as follows: 6kW installed capacity is 6,000 watts x rebate amount ($.75/watt) equals a one time rebate payment of $ 4,500.00. If a 10,000 watt system is installed, the rebate amount will be limited to a rebate based on the first 6,000 watt capacity, a $4,500.00 rebate incentive.

Note: the incentive amounts are for illustration purposes and are subject to change from year to year. Please see the online capacity matrix for current rebate and PBI incentive levels. Also note that capacity allocations may fill up prior to the year end and be closed to new applications. New capacity allocations will be available beginning each calendar year. A wait list will be established if an allocation category is fully reserved, up to 10% of the allocated capacity.

Q. What happens if the sun doesn't shine?
A. Your PV system will continue to produce electricity during cloudy weather, although the total amount will be reduced. Power will automatically be provided through Black Hills at night or during inclement weather.

Q. What does a typical PV panel look like?
A. A typical PV panel consists of solar cells connected electrically to form a module that can measure two to four feet wide and four to six feet long. Some solar modules look just like traditional roof shingles. Many interconnected PV modules are called an array.

Q. Is my home right for a PV system?
A. A PV system needs unobstructed access to the sun's rays for most, or all of the day, throughout the year. PV panels are relatively unaffected by changing weather. In fact, some PV cells actually work better at colder temperatures. PV modules are angled to catch the sun, not snow, so any snow that does collect melts quickly. To maximize the energy production of photovoltaic electricity, PV systems are installed on a southern exposed roof and mounted parallel with the roof at a 35 degree roof pitch with no shading. However, roofs that face east or west may also be acceptable. PV panels should have their surfaces exposed to the sun's rays for most or all of the day, with minimal or no shadows from trees, chimneys and gables between 9 AM and 4 PM.

Q. Home Energy Efficiency and PV
A. An energy efficient home means you can install less PV. Every dollar on energy efficiency in the home saves $10 on your PV electric panels. To become energy efficient in the home, use compact fluorescent light bulbs, which use 75% less energy than the equivalent incandescent. A 15 watt compact fluorescent will produce as much light as a 60 watt incandescent. Also look for energy saving appliances (clothes washers, refrigerators, room A/C, dishwashers. Refrigerators before 1990 are power hogs! Black Hills How To EnergyWise Programs can help you become more energy efficient in the home.

Q. How does shading affect my PV system?
A. Proper placement of your Photo Voltaic (PV) system is critical to the success of the PV systems output. Having even one cell in a PV module in the shade, especially during the best sun hours of the day, can decrease the output for the entire module and possibly the entire system. Since the shaded cell is not producing any moving electrons, it acts like an open circuit to the entire string. This is similar to having one Christmas tree light burned out in a string of lights. No current can flow! When looking to place your PV system, please watch for any type of shading. Shading can include trees, chimneys, TV antennas / satellite dishes, dormers of the house. Step 1- Review your roof for good access to the sun. Does the area for PV system receive full sunlight with no shading? Step 2- If you have 100% of sunlight on a south facing roof, you have an ideal roof for PV, although east and west facing roofs are very good also. If there is shading on your roof, consult with a person trained on PV. This could be a PV contractor from LIPA's Web site, the Long Island Shines Web site, or from the telephone book. Another option is to use LIPA's Solar Pioneer Web site, follow the link to 'Building Your Own PV System' which is the Clean Power Estimator tool. Click on the link of 'Click for Obstruction Analysis'. This link will help determine the impact from the shading. A Solar Pathfinder is a tool commonly used by a contractor to determine the impact of the shading on your potential PV system. Please note: Eligibility for LIPA's rebate can be denied by improper installation of PV system. Improper installation includes orientation and shading.

Q. Can my home accommodate a PV system?
A. The amount of space needed by a PV system is based on the output of the PV system and the type of PV system installed. Most residential systems require as little as 50 square feet (for a small "starter" system) up to as much as 1,000 square feet for larger systems. A typical two-kilowatt system could occupy approximately 200 square feet. If your location limits the physical size of your system, you may want to install a system that uses more efficient PV modules. Greater efficiency means that the module uses less surface area to convert sunlight into a given amount of electric power.

Q. How much PV will I need?
A. As a starting point, you might consider how much of your present electricity needs you would like to meet with your PV system. For example, suppose that you would like to meet 50 percent of your electricity needs with your PV system. You could work with your PV provider to examine past electric bills and determine the size of the PV system needed to achieve that goal. You can contact Black Hills Customer Service and request the total electricity usage, measured in kilowatt-hours, for your household over the last 12 months (or consult your electric bills if you save them.). Ask your PV provider how much your new PV system will produce on an annual basis (also measured in kilowatt-hours) and compare that number to your annual electric demand to get an idea of how much you will save.

Q. How can I estimate the annual energy produced by a PV system?
A. Use this equation to calculate Energy from the PV system : (kW of PV ) x (Energy Production Factor) = kWh/year Divide this number by twelve if you want to determine your estimated monthly energy reduction.

Q. Do I need to be concerned with the condition of my existing roof?
A. A PV system can be installed on any well-structured roof. Typically asphalt shingles are easiest to work with, while slate is the most difficult. If your roof is older and needs to be replaced in the very near future, you may want to replace it at the time the PV system is installed to avoid the future cost of removing and reinstalling your PV system. PV systems are also available that integrate PV cells into the roofing materials themselves. This allows the roof itself to act as the PV collecting device and serves as an excellent option when replacing a roof or designing and/or building anew home. One benefit of an integrated PV system is its ability to offset the cost of roofing materials.

Q. How much does a PV system cost?
A. The total cost of a PV system includes the PV system and installation. Your PV system's cost will depend on a number of factors, including system size and the energy efficiency of your home, whether the home is under construction and whether the PV is integrated into the roof or mounted on top of an existing roof. The cost also varies depending on the PV system rating, size, manufacturer, retailer and installer.

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