Grant winner has cloudy outlook on solar power
Staff writer
Carlsons’ Grocery and Hillsboro Industries will receive federal grants to pay for half the cost of installing and maintaining solar panels.
But owners Greg Carlson and Mike Gerken have quite different attitudes towards the program.
Hillsboro Industries is a large facility that produces trailers and truck beds.
Gerken, who plans to open a new facility in Newton this year, was inspired to apply for the grant after the Inflation Reduction Act offered incentives encouraging businesses and homeowners to switch to cleaner energy.
One of these — a 30% tax credit for installing solar panels — was particularly enticing.
“Hutton Construction had a solar division, and they told us about the rural grant, and we went along with it,” Gerken said.
Hillsboro Industries’ solar system took about six months to install and was completed in November of 2023.
However, Gerken expressed frustration with how his solar project has gone. His largest complaint is that his solar panels do not generate enough energy to justify their cost.
“Without the government funding, it’s silly,” he said. “I mean, you’ve got $385,000 of solar panels that produce about $16,000 worth of electricity a year.”
If Gerken’s numbers are accurate, it means his panels wouldn’t pay for themselves for 24 years.
With an estimated 25-to-30 year lifespan, it doesn’t exactly seem worth it, particularly if you account for inflation.
The $185,000 grant Gerken received, as well as tax credits, will make his panels profitable in less time.
Still, he’s not planning to go solar with his new Newton facility.
“I won’t do it again in good conscience,” he said. “It doesn’t seem to me to make sense to do this on the taxpayer’s back. … I feel guilty.”
Gerken challenged data reported by the U.S. Department of Agriculture that Hillsboro Industries’ solar panels have replaced 45% of the company’s electrical usage. He estimated the number to be closer to 20%.
“I have three meters,” Gerken said. “It may be doing 45% of one meter, but that meter’s only about a third of my electricity.”
Doug Bruggeman, a business programs specialist at USDA, said the usage percentage was based on what the business reported in its application.
Gerken said he was under the impression he had to start the project before knowing whether he had been accepted into the grant program.
Carlson, in contrast, was able to wait until being accepted to start work on the panels.
“Some people elect, once they’ve completed the application, to go ahead and start, but they run the risk where if they’re not selected, they’re out the cost of the project,” Bruggeman said.
Carlson will receive $88, after the project is completed.
He plans to put his panels on the roof of his Marion grocery. Like Gerken, he estimates the project will take about six months.
Carlson decided to apply in 2023 after the Hutchinson-based company King Solar pitched the idea to him.
He previously had talked to another company about putting up solar panels, but it had suggested a bigger project that involved selling excess energy to the city. Carlson thought that sounded excessive.
“They were over-generating us,” he said.
He is hopeful solar energy will be a boon to business.
“We get half of our money back, because it’s government funded, and we get tax credits for the next three years,” Carlson said. “Between that, and the price we’re saving on electricity, it should pay off in about three years.”
Asked how much he pays to keep refrigerators and freezers in his store running, Carlson laughed.
“It’s a lot,” he said.
When Gerken’s criticism of the project was brought up, Carlson became less assured.
“I’ll be darned,” he said. “I hope that’s not the case.”
Still, the grant and tax credits should make the project worthwhile for both businesses.
As Carlson said: “If the government’s ready to pay for half of it, I’m ready to take it.”