After submitting my building permit application, the city planning department called. Because the array on the pergola would be electrically connected to the home, they were lumping my project in the “accessory structure” category, which includes garages and workshops. Unfortunately, the city’s land development code (LDC) didn’t allow them in front of a home—only beside or behind.
Absurdly, the pergola could have been built without any permit if it wasn’t electrically connected to the house—it was small enough not to trigger the requirement. Instead, I had to file for a variance, which included paying more money. The city sent a variance meeting notice to my neighbors, and published it in the local newspaper and on the city website. In preparation for the meeting, I read the entire LDC and wrote a five-page briefing on why I felt they should approve the variance, which ranged from alignment with state and city energy policy goals, to perceived inconsistencies with the code itself, to an analysis of why the roof and backyard (and cutting down trees) weren’t reasonable alternatives.
After I submitted my briefing, the city planner called a few days before the variance meeting to negotiate. They would call it a “garden structure” if I added some lattice and planted some grape vines to hide the underside of the PV modules from the street, making its primary purpose about the garden and not the solar. I don’t blame the city—they need to have a consistent decision-making process—it’s just that if you’re the first one to do something, it can take longer and cost more. Six weeks and $542 later, I had my permit and could start building.
The construction phase was easier than the permitting. A few months earlier, we discovered that our main water line was leaking and a three-foot-deep trench would need to be excavated from the street to the house, passing next to the pergola location. As part of that process, we laid conduit in the same trench for the 125-foot run to the garage, where the inverter was to be located. A local contractor took care of building the pergola, and Alpenglow Solar handled the PV installation in a couple of days. The local municipal utility replaced the existing analog meter with a bidirectional electronic meter at no charge and inspected the system the next day, finding no issues.
The system cost more than most—the permits, a portion of the trenching and conduit, building the pergola, and using the premium modules all added to the costs. But the state had a rebate program and a tax credit that helped defray the costs. The system is net metered (retail rates average 9.5 cents per kWh), with an annual true-up—any surplus electricity the system generates is paid out each April at 5 cents per kWh. We pay a minimum $3.80 per month utility charge, regardless of our consumption, to cover the utility’s fixed costs.
But I had to wait until tax time to take advantage of the state and federal tax credits, and the state rebate was taxable on my federal income taxes. This isn’t ideal, but if you tax the rebate you don’t have to subtract it from the total system costs when you calculate the 30% tax credit. State rebates are generally taxable; utility rebates are generally not. (Consult your tax accountant for specifics.)
The incentive paperwork was manageable, but I had to apply separately to the two state programs, one for the rebate program and one for the tax credit program. There is also no renewable energy credit (REC) market in Utah, and exporting the RECs to another state is cost-prohibitive, but can be a revenue stream available in some other states.
Our existing homeowners insurance policy provides $15,000 in coverage for external structures like garages and it put the PV pergola in the same category. Since the pergola and the garage are separated by 100 feet, the risk of catastrophes on both at the same time is small, so we felt it unnecessary to increase protection.
What’s the payback? For me, solar energy is a hobby (which aligns with my ethics) like someone else’s fishing boat or swimming pool—things that aren’t subjected to cost-benefit analyses. Unlike fishing or swimming, however, solar is a hobby that generates some income in the form of savings on our utility bill.
In strictly economic terms, the rate of return for your PV system depends on three things—solar resource (in Utah, it’s good); electricity prices (Utah: low); and state policies or incentives (Utah: high then, but now low). In our particular situation, it’s a low rate of return (but so is my savings account rate these days). With the combination of incentives I received and the possibility of low-interest rates on a mortgage refinance, the system would have nearly evened out—i.e. annual loan costs were only slightly higher than the annual electricity savings—if I had chosen that option.