Solar energy can help save money on energy bills, but the installation process can be costly, ranging from tens of thousands to hundreds of thousands of dollars for large commercial installations.

However, there are grants available for businesses to help out with costs, sales representative with Mississippi Solar Michael McCoy told Columbus Rotary Club on Tuesday at Lion Hills Center.

Mississippi Solar is a Eupora-based solar energy company that designs, installs, monitors and maintains residential and commercial solar energy projects. The company was established in 2009 as the state’s first solar equipment provider.

“Explore the money that’s available,” McCoy said. “It’s real money, and over the course of a year, it’s going to benefit you in a major way. That’s something I wish I could get across to everybody. This is the real deal.”

If a business owner is quoted $50,000 for a solar energy system, the cost could end up being roughly $5,000 after grants, tax credits and deductions.

McCoy said there is a U.S. Department of Agriculture grant called Rural Energy for America Program that allows for up to 50% of total eligible for project costs. It is available to rural small businesses and agricultural producers.

McCoy said the 30-year electric bill savings is about $102,000. For a small business, McCoy said the return on investment is typically three to five years.

Residential savings too
Savings can be had for residential installations, though the payback period tends to be longer.

For a residence, the ROI would be about 20 years, Tennessee Valley Authority media relations Scott Fiedler told The Dispatch. TVA provides power to eight states, including northern Mississippi.

Fiedler said there is a solar calculator online at edt.tva.gov that allows anyone to put in their average monthly utility bill cost and which power provider one uses — 4-County Electric Power Association, Columbus Light and Water and Starkville Utilities are all options. The solar calculator will then tell the person how much energy a system will need to generate per year, what kind of system is needed and how many panels that requires.

The solar calculator lets individuals know how much the system would cost without financing and how many years it will take to pay off with a tax credit, if applicable.

For a residential customer with an average electric bill of $150 in Lowndes or Oktibbeha counties, the pay-off for solar would be 23 to 29 years, according to the calculator. A solar panel has a standard lifespan of roughly 30 to 35 years but can still produce power for much longer, according to the U.S. Department of Energy.

The cost of using solar power does vary depending on the power company who sets the rates, not the power provider, Fiedler said.

Costs of solar vs. grid
The cost of solar electricity has dropped significantly since 2010.

The cost of energy in 2010 for residential solar energy systems was roughly 50 cents per kilowatt-hour (kWh). In 2020, it was about 13 cents, and the 2030 goal is 5 cents, according to the DOE.

Similarly for commercial usage, the cost was 39 cents in 2010 and 9 cents in 2020. The DOE’s 2030 goal is 4 cents per kilowatt-hour.

For comparison, grid rates per kilowatt-hour at local utilities are roughly 11 cents at CLW, 7 cents at 4-County and run between 8 and 9 cents at Starkville Utilities.

The U.S. Energy Information Administration website says the monthly average energy use in 2021 for Mississippi residents was about 1,171 kWh per month.

For commercial use in Mississippi, the average monthly consumption was 4,719 kWh per month and cost electric customers roughly $510.

A customer using solar energy would pay roughly $425.

For those interested in installing solar energy, McCoy said it is best to have a place with sun-exposure and no shade, and southern exposure is best though east and west are fine, whether on the roof or on the ground.

McCoy said most of the business that Mississippi Solar has seen since its inception have been for residential customers, and he and his colleagues are trying to get more small business owners to go solar.

Some systems come with batteries that are charged by the sun for nighttime use off the grid, but McCoy said people also use solar energy for the daytime and use the electrical grid from power companies at night.

“Our primary business model has been chicken farms because they use most of their power in the daytime,” McCoy said. “… We’re trying to break into small businesses because we’ve only done a handful of them, but they make so much sense. Small business owners typically by the end of the year are looking to avoid some taxes, and here you go. You have a perfect situation for that.”

He said the company services all of Mississippi, and it has projects in Brandon, DeSoto County and Greenville being installed now and in the near future.

Fiedler said companies like Ford, Meta and Jack Daniels use solar power, and since 2018 solar power generated $3 billion in economic activity in the Tennessee Valley.