As a state with cool weather and a lot of sun, Nebraska is an ideal location for solar-energy installations. Michael Shonka, the founder and president of Omaha-based Solar Heat and Electric, has been in the solar industry for over 30 years. In 2013, he installed a 25-kilowatt solar power installation on a center pivot for the first time. Since then, he has installed a number of other water pumping applications. In this interview with Irrigation Leader Managing Editor Joshua Dill, Mr. Shonka discusses why solar power is a wise investment for irrigators, how it helps the environment, and the ways in which solar power stands to benefit Nebraska’s energy futur
Joshua Dill: Please tell us about your professional background.
Michael Shonka: I started in solar in 1983 at the encouragement of my father. We worked with solar-thermal at that time—warm air and hot water systems. That was the predominant technology in the 1980s, especially because there was a 40 percent tax credit available at the time. Once the tax credit expired under the Reagan administration, the entire solar industry imploded and almost completely disappeared by the end of 1986. I continued to work in the solar field, installing the occasional system and doing repairs, but I also took on other positions. I went into the telecom industry and stayed there until about 1998; then I transitioned back to solar full time. I’ve essentially been working in the solar industry for over 30 years.
The technology in the 1980s was predominantly solar-thermal. The hot-water controllers, pumps, and solar collectors used in solar-thermal energy have not changed significantly in design since then. Some initial solar-electric systems existed back in the 1980s as well, but those have been developed continuously since that time because of advances in the basic sciences, physics, and chemistry. There were developments in the materials in the United States and developments in manufacturing methods that were made in Germany during their solar revolution in the late 1990s and early 2000s. In the late 1990s, I installed a system in my home in preparation for Y2K—it was one of my subspecialty areas at the phone company to vet all our vendors for Y2K—and I was amazed at how much the technology had evolved. Photovoltaics (PV) have become the dominant force since that time.
The solar industry really began picking up in the United States with the Asian invasion of modules around 2010. In the Midwest, we are about 3–5 years behind anything that happens on the coasts, whether it’s a fashion statement or a technology—it just takes a while to get to the middle of the country—and so 2013 was when I designed and installed the first solar-assisted center pivot at a client’s farm. I had been installing a lot of solar grid tie-in systems prior to that, but this was the first 25-kilowatt system I had installed on a pump. This is a grid-tied system, not an off-grid one, and we selected this particular site because the electrical infrastructure was easily accessible, right next to the pump and the transformer. We installed 100 solar modules. In terms of layout, we spread the racks out a bit to reduce wind load, because there is no windbreak at the site and the owners often get winds in excess of 40, 60, or 80 miles an hour. The system is resisting the winds without a problem and has continued to operate virtually maintenance free since then. Their initial return on investment has been paid off at this point: After about 5 pumping seasons, they recovered their initial investment with the aid of tax depreciation and tax credits. It’s been a good investment for them.
I was motivated to install this system because I come from a farm family myself; my father sold center pivots and did a lot of farming. We had one of the largest farm operations in the state back in the 1980s: In fact, we did about a third of Cracker Jack popcorn’s production for a decade.
Since then, I have since installed a number of similar water pumping applications, as well as other larger-scale community solar-electric installations.
Joshua Dill: Tell me about your company.
Michael Shonka: Solar Heat and Electric does pretty much all things solar, including applications for solar-electric and hot-water systems. I teach classes on solar technology at the local community college and university, and I have a North American Board Certified Energy Professionals (NABCEP) certification as a PV Installation Professional, which is one of the highest ratings you can get that recognizes your solar expertise.
Joshua Dill: So you provide solar setups not only for irrigation but for other applications as well?
Michael Shonka: Yes, we do commercial and residential applications as well.
Joshua Dill: What about your product makes it especially suited for irrigators?
Michael Shonka: A couple of things are important here. The solar installation works year-round, even though the typical farmer in the Midwest only irrigates for about 2 months of the year. For soybeans or corn or whatever it might be, our growing season is about 5 months; a farmer irrigates for about 2 of those. With a solar installation, a farmer will build up credits all year long and start to draw down those credits during the irrigation season. At the end of the year, depending on whether it was a dry or wet year and how much irrigation the farmer actually had to engage, the farmer will either have a smaller check to send to the utility or will get one back for the balance of the credits. It’s a wise investment for farmers. Farmers are used to writing big-ticket checks for equipment, and they’re pretty good at business planning—otherwise, they wouldn’t still be operating—so they’re pretty sharp with the pencil when it comes down to investments. If they have a good year, they’ll need depreciation to offset some of their gains. Solar is also an intelligent investment because it lowers a farmer’s operating costs and makes him or her more competitive in the market.
There are other compelling reasons for farmers to engage with solar, not only in the case of irrigation-related applications. We’re seeing a turn toward solar-thermal again for radiant floor heat in shops. When you build a large shop, it usually has a 12- or 15-foot ceiling, and when you heat it, all the heat rises to the ceiling. With radiant floor heating, however, the tubes are in the concrete of the floor itself, and the flow of solar-heated hot water is very effective. It’s an excellent way to heat a structure. We’re seeing more uses of solar in agriculture now. That will continue in the coming years.
Joshua Dill: Tell us about the environmental benefits of your product.
Michael Shonka: A greater use of solar energy reduces the amount of electricity that you have to buy, and our predominant form of electricity generation in Nebraska is coal. So solar energy actually reduces the amount of coal needed. Nebraska is an all-public-power state, which is great because our economic costs would be higher for everything otherwise. Public power has set a rate preference in which lower rates are provided for irrigators if they turn on their pumps after 11:00 at night, when demand on the grid is low, and shut them off around 7:00 in the morning. The nighttime energy consumption helps balance out the generation needs of the public power system. It works to the betterment of the farmers and public power. So, in addition to the direct environmental impact of reducing the amount of coal needed, solar energy helps with the management of the grid and lowers the costs of operation for both public power and the farmers.
Joshua Dill: What are the main challenges you face in your business?
Michael Shonka: As with many businesses, marketing is probably our biggest challenge. Our cost of customer
acquisition is pretty high. There is a learning curve, because people are less aware of solar in this state, even though we’re in the top 10 in the country for solar and wind. We still have a long way to go to educate people about the benefits of solar energy and why it is a wise investment. That is probably our biggest expense.
Joshua Dill: What are your aims and prospects for the future?
Michael Shonka: We continue to work on consumer outreach and educational programs. We’ve done a number of seminars, not just for the general public but also for public power, to get them comfortable with the technology. They’ve had a monopoly for a long time, so it’s new to them. It has been interesting to see their attitude shift to a more positive acceptance of solar in the recent past. That has been helpful.
We’re optimistic about the future, although I think it’s going to be a slow-growth period. Because we have no state tax incentives to help reduce the up-front cost of installation, we’re going to continue to be one of the lower-penetration and lower-gross-sales states in the country. For those states that do have incentives like sales-tax or property-tax forgiveness, market penetration increases much more rapidly. We’re a pretty conservative state, so it’s difficult to get those things through.
Joshua Dill: To what would you attribute the recent shift in the perception of solar power? Has solar power become more affordable or more efficient recently, or is there just better knowledge?
Michael Shonka: I’d say it’s a combination of all of those factors. As the technology continues to improve, the costs have continuously decreased, although the costs have essentially bottomed out at this point; we’re working on soft costs now, like permitting, marketing, and education.
Similarly, awareness is growing that Nebraska’s highly centralized system of coal-based power generation and high-line-based distribution is not going to serve us well in the future. We need to look at a more distributed generation. With our current system, as demand for electricity gets higher, power quality becomes an issue, especially for users who are farther away from generation sources.
We are looking at growth areas for wind energy as well as for solar. Right now there are new wind projects going up in the north-central and northeastern parts of the state. These projects are going to take up a lot of the capacity on the lines in those areas. New lines will have to be added in other parts of the state to expand the wind network out there as well. That’s part of the tradeoff with these new technologies.
In the meantime, we’ve got to balance the costs of current generation with retiring some of our older equipment, which will change the economics of operation and how much revenue can be generated from existing infrastructure. One growing concern is stranded investment. If renewable energy sources are expanded, traditional coal-fired plants may not be used up to capacity or at their efficiency level. We are embarking on a transition in which we will have to blend what we’ve got with new technologies.
Joshua Dill: How well suited is Nebraska to solar energy?
Michael Shonka: Solar technology marries up well with agriculture in Nebraska for several reasons. We’ve got a high level of solar availability, we’ve got the demand, and we’ve got low temperatures. Electrical resistance goes down as the temperature drops; with that in mind, our solar-energy production on an annual basis is actually better than that in Southern California and the Mojave Valley. Depending on how this all rolls out, we could be looking at being a renewable generation state that exports its energy. This will evolve in rural areas rather than urban ones, and the agricultural market will benefit from those infrastructure investments.
Being a public-power state, it is critically important to our economic future to have a way for private capital to inject power into the system. We’re not a carbon state; we import 95 percent of our energy. So we have a trade imbalance in energy of billions of dollars per year, which is unsustainable. We’ve got to change that. Solar energy is one way that we can reduce that trade imbalance and promote a healthier economic future. I think it is going to be the farmers who are the first movers in this kind of infrastructure investment, and it’s going to carry with it benefits for the entire state. I think that’s the critical point that people miss on the macro level: Not only does this technology benefit individual users, it benefits the environment and the general economy of the state.