Looking much like a halfback dancing in the end zone after completing a fifty yard touchdown, Paul Schnatz sporting an elated smile ran his finger in circles to show everyone that his electrical kilowatt service meter was spinning backwards. He was selling electricity to PPL instead of buying it. Schnatz had become an a green electrical generating company, and he will be producing electricity as long as the sun shines.

After retiring from SEPTA in Philadelphia and moving first to Florida-which was too hot, he bought a home in an Albrightsville development. Bored with retirement and facing $140 a month electric bills plus additional costs for propane heat, Schnatz decided that he needed to make his home, energy efficient.

He insulated his attic, replaced the siding after installing a Tyvek house wrap, caulked all the cracks, installed storm windows, and replaced incandescent light bulbs with compact fluorescent light bulbs. These changes combined to lower his electric bill to $90 a month-good enough for most people but not for Schnatz.

While he was energy-proofing his home, an ice storm knocked out power to his development for eight days. Vowing not to let that happen again, he purchased a propane powered electrical generator. Since its been installed, it's only operated for a half hour. He's spent more time changing the oil for the several years he had it. It didn't turn out to be a it. It didn't turn out to be a good investment but he feels prepared for the next power outage.

So, with his home energy-proofed and independent of the power grid, Schnatz was ready to kick his quest for power independence up a notch. Instead of paying for power, he felt that he could generate his own power and sell it back to the utility.

With the current financial incentives from the State and the Federal government, he figured a payback in under seven years-maybe five years if energy prices continue to rise.

"I want people to know about this," Schnatz explained. "This is what people need to. In Europe and the Far East, they use solar and wind power right now. It's too bad that townships are starting to ban this because they think it is obtrusive. It's the wave of the future. The price of energy is not going down."

Schnatz decided to generate his own electricity. He looked at wind and solar power, opting for solar because he felt that a wind turbine might not get approved by the township. He sent out request for proposals to four companies, selecting Solar Electric Power Systems of the Lehigh Valley.

All four companies had proposed similar savings. For his 1,200 square foot ranch in a forested location, he chose a solar array consisting of 16 panels, each rated 224 watts. This would produce a nominal 3.5 kilowatts of electrical power.

The panels were roof mounted. Each 39-inch by 64-inch panel came with its own inverter to transform the panel's 35 VDC output to 240 VAC line voltage which connects through a disconnect to the main power, downstream of the meter.

With this arrangement, at night when the solar panels are not operating, power flows from the grid to the house. During the day, power flows from the solar array to the house with excess power being sent from the house to the transmissions system.

The materials and labor to install the system were quoted at $25,375. Subtracting a 30 percent Federal tax credit of $7,612.50, and a Pennsylvania rebate based on $2,25 per watt of $7,875, the cost to Schnatz was $9,887.50.

Once the system is installed, Schnatz estimated annual return is projected to be $1,435, that is a $385 savings on his electrical usage and $1,050 income from sale of Renewable Energy Credits-based on $300 per kilowatt.

Renewable Energy Credits are separate from energy savings. Many power producers are required to have a certain mix of clean green renewable energy. If a producer generates electricity from coal, they may buy Renewable Energy Credits as an offset. These credits are sold in a marketplace similar to the stock market.

In order for Schnatz to sell his energy credits, before he can begin work, his contractor must apply to the Pennsylvania Department of Environmental Protection for approval. The approval for Schnatz's solar generating system took six weeks. Once approved, material were received in a week, and installation was completed in three days.

Once completed, Schnatz's solar generating system is registered with a Renewable Energy Credit market, GATS or Clean Power Systems, and he selects a broker. The solar system has two meters. One is the existing meter which interchanges power with the electrical grid. A new second meter measures the energy generated by the solar array. Periodically, Schnatz will read this Renewable Energy Credit meter and call its value into a broker to sell his credits. Credits have sold has high as $700 per kilowatt per year.

If energy rates stay at current levels and if lost interest is not factored into the equation, the installed cost of $9,887 divided by the revenues per year of $1,435 produces a 6.89-year payback. Without the government incentives, the actual cost of $25,375 divided by the revenues per year of $1,435 gives a 17.68-year payback-which would be a poor investment. Even poorer would be the cost without a Renewable Energy Credit-that would give a $25,375 divided by $385 or about a 70-year payback.

"If I produce more electricity than I use, it goes back into the grid," said Schnatz. "If I don't use it, I get paid for it by the power company. Either way, I'm getting renewable energy credits."

For information on rebates, see: http://www.depweb.state.pa.us/energindependent/cwp/view.asp?a=3&q=545926... [2] of the meter.