 Welcome to the third sustainable Sheboygan's spotlight program where we discuss sustainable activities in Sheboygan and we try to cover the topics that are discussed in Sheboygan's publication of the sustainability plan. You can stop by our sustainable task force meetings. The next one will be Thursday, March 26 from 12 p.m. to 1 p.m. in the third floor of City Hall. And today's one of the topics in the sustainability plan is energy. And today's topic is solar energy. Solar installations have increased dramatically over the past decade, residentially and commercially. Here to discuss solar broadly and locally is Chris from Archaeologic and Plymouth. Thank you Chris for coming. Could you please introduce yourself and give us a little bit of background on solar energy locally in Sheboygan and in Wisconsin. Sure, absolutely. First of all, thank you Heather for having me. This is quite an opportunity. So as you said, my name is Chris Merklein. I'm a general manager and part owner of Archaelectric. We're based out of Plymouth, Wisconsin and we've been installing solar for over 10 years now. We got into the business before it was cool. We actually had to travel to California to get the proper training because nobody in the West really knew how to do it. But we went out there. My business partner and my boss Ed went out to California and got the proper training and he brought that back to Wisconsin and was quickly recognized as one of the only people in Wisconsin who really knew how to do this. So he's been one of the pioneers in Wisconsin and has been installing solar since 2014 with great success. Fast forward to now, 2015, we install solar every day, year round. Under normal Wisconsin weather conditions, we have guys on the roof even in the cold and in the snow. We've had great success in Milwaukee County, Sheboygan County, Fond du Lac, Manitouac. We've been as far as Florida installing solar. And now we're recognized as one of the leaders in the state of Wisconsin for installing solar electricity. Excellent. Could you tell us a little bit more about some specific projects in Wisconsin and in Sheboygan? Sure. Well recently, 2014 was a great year for us. We had a lot of fun but it was in Milwaukee County. There was a few neighborhood group by programs for example that we did 50 or 60 residential installs. And at the same time we're in Milwaukee doing 100kw install on the wall of the Milwaukee County Public Museum. So those are two big success stories for us and that's a good segue for later on. I'd like to talk about solar Sheboygan. Okay, great. And could you tell us about any installations that you've done here in Sheboygan? Sure. Well, not specifically. I'd rather not share customers' names but we have many solar installations in Sheboygan County. And more importantly, we have a lot of repeat customers here in Sheboygan. Okay, excellent. And just to back it up a little bit, could you tell us the basics of how solar energy works? How can we actually harness and convert sunlight into electricity? Oh, sure. Absolutely. Well, the slide will show you the basic PV system. PV stands for photovoltaics. It's an interchangeable word synonymous with solar. So the sun shines and the photons hit a solar panel. The solar panel, the electrons inside the materials in the solar panel get excited and we create a circuit and it creates a DC electricity. As you know, a home or a business, they don't know how to use DC electricity. Everything operates on AC. So that DC power first has to be inverted into AC power for your home or your business to use. So depending on which utility you're in, first and foremost, the job of the electrons that are created are to serve that building's demands. It's going to turn the lights on. It's going to run your refrigerator, your TV. In the event that the solar panels are producing more electricity than what the building needs, then it gets to send the electricity back to the grid and your meter will literally run backwards. Thank you. So how could a solar installation possibly impact the infrastructure of a home or business? For example, one I think of is the roof. A roof. Well, there's a couple of different examples. We have two different slides to show. This slide right here is a direct roof mount system, and that is where we do attach to the structure of a roof, and the panels themselves are attached to a racking system that hold it maybe five or six inches off of the roof. We want to have air flow underneath to keep the solar panels cool. The cooler, the better. In terms of impact to the building, it's very minimal. In most cases, the building is completely structurally sound, and we don't need to complicate things at all. But every now and then we'll run into a home or a business where it's questionable, or the homeowner would just feel better knowing 100% for sure that they won't have an issue with that additional weight or wind load up there. In that event, we have a professional engineer that we work closely with who understands solar, the live loads and the dead loads and so forth, and that person will walk through and take detailed pictures and measurements and provide us and the homeowner or the business owner with a letter with his professional engineer stamp on it saying, I've reviewed the structure and everything is okay. You can install this system and sleep good at night. Another option is ground mount systems. Some people, their roof maybe it faces the wrong direction, east or west, or perhaps it's shaded by too many trees. In that case, the other option is a ground mount system, which doesn't affect the building at all. Then we can go out into the yard and slide number four is a yard system which has three poles. These are actually trackers. There are positives and negatives to going out in the yard as there are going on your roof. The positives to going out in the yard is that normally there's 100% what we call solar access. The solar panels are going to see the sun all the time. The downside is that it costs a little bit more to drill the hole and to pour the concrete that's going to hold the pole and these solar panels up. And then two follow-up questions to that. What if a person's roof needs to be replaced anytime in the near future? And then number two, so you kind of think about the life of a roof or the waste jingles and then also what's the life of the solar panels once they're installed? Sure. Great question. And the roofing question comes up with everybody. If you've just installed your roof a year or two or five ago even, you're just fine. Don't worry about it. But if you're on the borderline where you're thinking, oh my goodness, my roof is 15 or 20 or 25 years old, I should maybe think about re-roofing. We'll be the first people to tell you. You want to take care of your roof first. And there are some clever things that we can do with the tax credits and so forth to help lower that cost or that impact if you do the project at the same time as the solar. But yeah, make no mistake. If your roof is reaching the end of its useful life, you should tackle that problem first. And then what's the life of the solar panel? Oh, a solar panel. They will live for 30, 35, 40 plus years. And that's been proven. And the manufacturing process is getting better. So we don't know exactly how long they'll last now, but the manufacturers of the solar panels are so confident in their product that it's industry standard now they have what's called a performance warranty. And they say that 25 years after you first install your solar panels, they're still going to be 80% as efficient as they were on day one or they'll replace them for free. Excellent. Okay. So you have my interest and I'm sure you have other people's interest. What is the next step? Or steps? Well, the next steps. That's a good point. Well, we have some information, neighborhood information meetings. Neighborhood info meetings is what we're calling them. And you can learn more at solarsheboygan.com. We have a list of the dates. The next one is tomorrow night actually on March 19th at 5.30 PM in the Sheboygan library in the Roka room, which is upstairs, I believe. But one of the things that you're going to hear about at a neighborhood info meeting, I'll just touch on it briefly, is slide number five. I talk often about the three limiting factors to any solar project. Any solar project, whether it's going on a business or on a person's yard or on their home's roof, there are three limiting factors. And I talk about this with everybody. The first is available space, whether it's on your roof or out in your yard. There's only X number of square feet, so we can only fit so many panels. Even if you had an unlimited budget, we can only fit so many panels on your property. So that's one limiting factor. The next is kilowatt hour consumption or KWH consumption on your existing facility. It's not a wise financial move to install a system that produces more energy than what you use. An optimum system designs to about 100%, and that's about it. And that is if you're grid tied. It's a poor financial move to overbuild because at the end of a month, if you end up sending more electricity back to the grid than what you've consumed, the utilities don't pay you very well for that. They pay you what's called an avoided cost rate or wholesale rate, which is just a small fraction of what the retail rate is, what you and I pay for when they send us our bill. And the last limiting factor, of course, is budget. We all live on budget, whether it's our business or our home. You can only spend so many dollars. So when I sit down with a homeowner or business owner, we'll talk about these three things. And we simply design our system to the lowest of those denominators. If somebody's budget is the limiting factor, they only have X number of dollars that they can spend on this, but they have a huge southern roof. Well, then we'll get to what that dollar amount is and we'll design to the dollar amount. On the other hand, if they have all kinds of money and they're not worried about that, but they've just got a tiny little south-facing roof and no yard, well, that's the limiting factor. We can only fit so many panels on that roof. So it sounds like what's included in this is an assessment. So that would be the actual next step. So if somebody's interested, say, hey, I want to know more about these solar panels, they would call you. You would come in to do an assessment, take all these things into consideration, and help the homeowner make the right decision for them. Absolutely, yes. Our onsite site assessments are free of charge and there's certainly no obligation. What a site assessment can be as quick as 15 or 20 minutes if somebody's on their lunch break and they just really need to get going. Or in a lot of cases, it takes up to an hour because everybody always has really good, intelligent questions about what is this solar system really going to mean to me? How's it going to change my lifestyle and so forth? But what we'll do is we'll essentially get to the bottom of those three limiting factors or those three questions. I'll take a look at their roof and we'll take some measurements. If there's a question about how much shading there is, it's important to not have too many trees in the way. If you're investing in solar panels, obviously you want them to see the sun. So in questionable areas, if there are some trees but still a lot of sky, I'll be very happy to climb on the roof and I use a piece of equipment called the Solometric Sun Eye. It's a digital camera that has a fisheye lens and it takes a picture of the skyline and through that fisheye lens it kind of bends everything and it puts a grid over the top of it. I import that digital picture or pictures depending on how big the roof is into my computer and we have some special software. And that software is smart enough to know, it recognized that there's a tree in the way. So in the winter months when the sun is really low in the horizon, from eight o'clock until maybe 9.30 in the morning, that tree is gonna partially shade part of this system. Well, through the software and through our experience, we're good enough to very accurately predict. What does that mean to you in terms of KWH, kilowatt hours that are produced? But most importantly, we translate that into dollars. What is that tree costing me ever you're being there? Does it really make financial sense for us to invest in this system? So all those things we go through in the free onsite assessment. Excellent, could you discuss a little bit of financial impacts, upfront costs, and then potential savings with a solar system for residential or commercial customers? Yes, absolutely. First of all, give a little bit of a history how solar has come a long way. 10 years ago or 15 years ago, the majority of people who were installing solar PV on their homes or businesses were those who just cared more than the average person about the environment. They really wanted to do the right thing, and the financial impacts didn't mean as much to them. Of course, they were hoping to get a return on their investment, but more importantly, they felt good about doing the right thing for the environment and reducing their carbon footprint and all of that good stuff. Things have changed drastically over the last 10 years, the last five and especially the last two. The cost of installing solar has come down so far that all of a sudden it's a really, really safe financial investment. What we always say is that you're investing in two different things with solar. Now, sidetrack for a second. If you're investing in the stock market, think of all the different variables that you're taking a risk on. When you're investing in solar, it's a much safer bet. You're investing on two things. First, you assume the sun is going to continue to shine as it always has, and two, you assume that utility rates are gonna at least stay the same if not continue to increase as they always have, which an interesting side note. We did a study recently on utility rates and how they've increased over time, and every utility is different. I'm not going to badmouth anybody, but on average, utility rates have increased at two and a half times the speed of general inflation. Take that in consideration. That is a huge, huge number. That's a big impact. I was blown away when we found out two and a half times the general rate of inflation. Wow. So, we have, in terms of the safe investment, again, you're investing in the sun and that the utility rates are going to continue to increase. Something else that our customers feel quite good about is reducing their dependency on the utilities. Now, the utilities are fantastic. I think it's wonderful that we can go to three little holes in our wall and plug in our refrigerator and it magically works. That's pretty cool. But nevertheless, if you look at the bigger picture, our customers are starting to feel good about keeping more of our energy dollars here in Wisconsin. 12 and a half billion dollars Wisconsin sends out of state recently to purchase coal and natural gas. Those are huge numbers. Wisconsin has zero coal and zero natural gas that we can depend on, but we do have people who install solar. So when you invest a dollar in solar, you're investing in Wisconsin's economy because you're putting somebody to work. Whereas when you send 12 and a half billion dollars out of state to buy coal and natural gas, that never comes back to Wisconsin. And last but not least, people are starting to recognize that. And I don't want to make it a political topic. Somehow it has become a political topic, but I should share that of our customers. We have the furthest left liberal Democrats on the whole spectrum as customers. Everybody in between. And I have the furthest right wing conservative Tea Party Republicans as customers of ours. And when it comes to solar, and when I'm talking to them one-on-one, again, you get them in the same room and maybe they'll argue over things, but when I'm talking to these people, the furthest left and the furthest right, they both agree that keeping dollars here in Wisconsin, keeping people employed, reducing our dependency on fossil fuels or whatever it may be, it's all a good thing. So the slide number six is, I'm kind of coming full circle to your question. I'm sorry. Slide number six shows a cumulative cash flow, whereas obviously on day one, you invest X number of dollars on a solar system. You're in the hole. You spent more than you would have on your monthly energy bill. And this is a typical, I'm not gonna share of exact numbers because your home is different than my home is different than your neighbor's home down the street. So investing in solar can be as little as six or $7,000 before any incentives, to as much as 20 or $30,000 we've done some homes for and even above that for businesses, of course. You get money back in three different ways or now four different ways with solar shabuigan. The first is a 30% federal income tax credit. Whatever you spend on renewable energies, you're gonna get 30% back on your federal income taxes. Next is focus and energy. That's a state slash utility run program where they give up to $2,400 for you to put solar on your home or business. Last in terms of grants is now solar shabuigan. There's a neighborhood group by that I'll segue into a little later, but that's another little incentive. We're depending on how many people participate in the program, we're gonna give money back to our customers as the collective savings type of a model. And last but not least, most importantly in fact is the value of the electricity that the solar system produces. After those initial grants are gone, those are one-time deals. They're here and then you get the money and then they're gone, then you're relying on the production of electricity to pay you back. And slide number six again shows roughly what that would cost under the solar shabuigan model because we've driven the cost down so far. So in year number one, your expenses could be significant. Year number two, you will have realized dollars back through federal income taxes and your focus and energy check and solar shabuigan check and so forth. And then as it creates electricity every month, every year, on this example, right around year seven and eight, that's where those two lines cross and all of a sudden you're payback. You've reached payback around year seven or eight and then you're just money ahead. And now you'll notice if you study this chart, right around year 20, there's a little dip. Well, what is that? Why is the system costing me money? Well, these systems are virtually maintenance free but the weakest link in the system is your inverter. If you remember, we talked about how the solar system produces DC electricity. What's your home or the grid doesn't know how to use DC electricity. So we have to invert it to AC electricity. That inverter inadvertently will go out. They're warrantied for 10 years. We estimate somewhere around year 20, you should probably, you're gonna have to make another investment to replace that inverter. So your cash flow takes a little dip right around year 20, but still by that time, if you look at the chart, you're so far money ahead that that won't hurt your wallet or your financial performance too much. Excellent. So I know you didn't wanna touch on politics too much, but if you could just speak to some changes at the state level regarding a possible solar tax. Yes, one of the utilities, a couple of the utilities in the state have proposed, you have to pay your fair share solar owners because all of your neighbors are paying to maintain the grid, but you have solar, so you're not getting much of an electric bill anymore. You're not paying your fair share. That's been their theme. So they have asked for and they have been granted a solar tax. They're being sued currently saying that the way that you brought about passing this law was not legal and furthermore, you didn't listen to the people. The Public Service Commission is kind of the police force, the liaison between the utilities, the we energies and aligned energies and so forth and the ratepayers. You and I who pay our electric bill at our homes and our businesses every month. The Public Service Commission is supposed to be the sound board and kind of manage the best interests of the ratepayers in Wisconsin and the utilities. We want the utilities to be healthy because, let's face it, they're the backbone of doing business and living in Wisconsin. So one of the utilities we energies was able to get a solar tax passed by the Public Service Commission. Again, there's litigation in place that's trying to reverse that or stop it, saying you didn't look at the facts, furthermore, you didn't provide any facts on where you came up with these dollars but as of this moment in we energies territory, if you have a solar system installed starting this year, they're gonna implement a little bit of a solar tax on you. Everybody who installed prior to that is grandfathered in so they're okay for a while but any new installations, they're imposing a small solar tax which makes the financial projections look not as good as they did last year. But most of Sheboygan County is in, we have four utilities, we energies is one of them but they're one of the minorities. Most of Sheboygan County doesn't have this solar tax. Okay, thank you. So onto other exciting things, could you talk about other innovations that are happening with solar? I know they've come a long way and kind of what's on the horizon with solar technologies. Sure, thank you. That's a funny question. Every trade show that I go to, somebody comes up and they say, hey, what's the next big thing? I read this article, it always starts with, I read this article about this company that's pioneering this new technology where you're gonna be able to power your own home with one solar panel, it's gonna be so efficient. One of my favorites is Solar Paint. They said, you're gonna be able to paint your home with solar paint and it'll power your home forever. These press releases in these articles come out all the time. We've been in the business for a while and we have yet to see any of these huge giant leaps forward in the technology. We do see consistent improvements of two or three or 4% in the efficiency. Meaning if a solar panel, that's exactly this wide, that's exactly this tall, the dimensions are the same as last year, but instead of producing 310 watts, this year it's producing 320 watts. So they make a little bit of an improvement in their manufacturing processes and in the efficiency. I see that trend continuing in terms of the efficiency of the modules. Of course, there's some really smart people out there who are working on their inventions and trying to make these more energy efficient. I don't personally see that next big breakthrough where one solar panel will be able to power your whole house forever. But we do see continued two, three, four percent increases in efficiency. And with that, a topic that parallels with that is the cost of solar. In the past, we have seen the cost dive, dive, dive. Well, recently, over the last 24 months, it's kind of hit rock bottom. Some businesses went out of business. They couldn't figure out how to, the free market has driven them out of business. They couldn't keep up with the best companies in the industry. So the best in the industry have survived and the prices have actually come up a little bit. And now maybe we're starting to see them inch down a little bit, but we're done with the nose dive price crashes that we've enjoyed over the last 10 years or more. So the industry's kind of stabilized as the point. But one innovation that is out there are solar shingles. Most people can't argue against solar and the technology and what it can deliver for you financially and environmentally. But some people just can't get over the hump. I don't want those things on my roof. They're kind of gawky looking. I don't think that, I think they look great. And there's some black on black panels and racking that can really make it look slick. But some people can't get over that hump. They say, I don't want those things on my roof. I'd like to make this investment and I want to be green, but you're not putting that on my beautiful roof. Solar shingles is now a thing. There used to be three companies that manufactured solar shingles. One of them was one of those who wasn't smart enough or fast enough to survive. So they went out of business. Now there are two. Of the two, only one of them will do business in Wisconsin. Certainty, and as of this moment, ArcElectric is the only certified installer for certainty solar shingles. So I think it's a game changer. As soon as we start installing these, they're gonna perform the exact same as a regular solar module. They cost just a little bit more because it's a new technology and it takes longer to install. But they look wonderful. You no longer have to look at a traditional solar panel that's sitting six inches off of the top of your roof. Now you have this solar shingle that kind of fits in with the other architectural features of your building. So potentially a game changer. I think so, yeah. So you mentioned a couple of times the solar shabuigan. So I guess the idea of that is buying bulk and it's based on a successful model in Milwaukee, Milwaukee Shine. So could you tell us in detail about that? Cause I think that's exciting news and why you're here today. So yeah, tell us more about that. You bet. Yeah, Milwaukee Shine's put together a fantastic program down in the Milwaukee neighborhood, obviously. They have had four neighborhood group buy programs down in Milwaukee, of which we were part of three of them. We did Solar Bayview, Solar Washington Heights and Solar Layton Boulevard West. And the general concept is that one contractor is selected to be the contractor of choice for this program. And the more people that participate in the program, it drives down the cost more and more and more. And I could go into great detail. I know that we're running out of time here, but on the surface the model of collective purchase, collective savings. The more people that participate in the program, it allows our electric to operate more efficiently. It allows us to purchase our materials for less because we're buying in big quantities. And as part of that, we're able to share in that savings. We don't put all of the additional profits from being able to buy lower in our pockets. We share with that openly with every single customer who participates and they get an additional check back at the end of the program. So in addition to buying at rates, we're installing solar in Wisconsin right now at costs that have never been seen before. In addition to buying at that already low price point, at the end of the project or at the end of the program, we send a check back to every one of our customers directly proportional to how many people participated. And it has been a tremendous success in Milwaukee and I can't wait to see what we can do right here in our own backyard. Why should we drive 60 miles to the south to enjoy this neighborhood group buy when we can do it right here in our backyard in Sheboygan? And you mentioned briefly the neighborhood meetings. Can you tell us a little bit more about those and what folks can expect to hear if they attend one of those meetings? Yes, absolutely. Real quickly, you can learn more again at solarsheboygan.com. We have our schedule listed at solarsheboygan.com on the right hand side under the info sessions. But they're gonna learn about what is solar. We'll cover a lot of the things that we did here in this interview. How does solar work? We'll get into it in a little bit more detail. What does it mean financially for me? Show me some different pictures. Show me more pictures of what solar systems could look like on different roofs. And we'll really drill down. So the first half hour is a presentation from me or from someone at ArchElectric on how solar works and what does it mean to you or your business or your home. And then the last 20 minutes or so is usually question and answers. There's always really good questions that people have. Excellent. And when attending these meetings, they can follow up with scheduling an appointment for an assessment and jump right in if they'd like. Absolutely. Things, first of all, they're not hard sells. We're not pushing anything. They're an educational meeting. If you show interest under no obligation, then yes. You can sign up for a free site assessment. You can do that online or just talk to me personally and we'll get you on our schedule. Excellent. Well, thank you so much, Chris, for coming today. And thank you to our audience for listening. I just wanted to come back to the Sustainable Shabungan Task Force and that's what brings this program here to you. We do have our next meeting coming up on Thursday, March 26th from 12 p.m. to 1 p.m. It's on the third floor of City Hall. Stop by and hear more about. You'll be a guest at that meeting and you can hear more kind of input from representatives throughout our county who are part of the Task Force. Talk to Chris about this exciting opportunity. And then I also just wanted to set the stage for our next program will be about multimodal transportation, bicycle and bike paths just in time for spring. So thank you again, audience for listening. Thank you, Chris, for joining us. And till next time, enjoy the weather.