Thinking about PV Solar for your Home or Business?

September 26, 2011 § Leave a comment

Photovoltaic solar panels on the roof of a hou...

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Good idea … now, consider these additional ticklers.

If you have been following this industry you know that solar PV component prices are down 60% in the last two years.  Never has there been a more compelling time to consider a grid-tied PV system for your home or business.

PV systems are an affordable and economic investment now — yes now!  In addition to perfect timing, consider these additional benefits for grid-tied PV systems:

Avoided costs . . . a tax benefit for homeowners.  As a homeowner with a grid-tied PV system, you will purchase less electricity from your utility.  You will avoid that additional cost.  OK.  Since you pay for electricity with after tax income, your PV benefit, for investment comparison purposes, is properly measured in before tax income.

For instance, if you save $30 a month with your PV system and you are in a 28% marginal tax bracket, your before tax equivalent savings is $30/(1-.28) or $41.66.  It takes $41.6 of before tax income to pay $30 to an electric utility.  This is the proper monetary measure of the PV benefit for a homeowner.  Caution: this does not apply if your lease your PV system.

No increase is property taxes.  In most jurisdictions, the capital investment of a PV system for your house will not increase the assessed value of your home or you annual property taxes.  Quite the opposite for a kitchen remodel or swimming pool!

Grid-tied PV systems are scalable.  2kW is as efficient as 5kW or 20kW.  So start small.  You can always add to your PV system at a later date.  A PV system equal to 15% to 20% of your electricity consumption is perfect and costs well less than $10k.  You do not need 25 panels or a $25k investment.  For home or business . . . go small.

A grid-tied PV system will increase the value of your home or business.  Of course it will; your PV system is virtually maintenance free and lowers the cost of operation.

For a home, a recent Lawrence Berkeley National Laboratory report affirms a 20:1 value ratio: that is, the value of your home increases 20 times the first year savings.  Spend $6,000 to save $300 a year: 20 x $300 = $6,000.  Payback?  It’s done!  Caution: this does not apply if your lease your PV system.

For a business, reduced operating expenses equal increased NOI.  Business are valued at a multiple of NOI . . . the increase in value is automatic.

PV systems are a very long term investment!  Most PV panels are warranted to 80% of rated power performance after 25 years, but these panels can last for 40 years or more!  Think about it.  2051 and you still are producing a lot of electricity.  Can you imagine?  A grid-tied PV system of any size is a terrific hedge against rising electricity costs.

Environmental attributes . . . Light from light.  PV systems are sustainable and renewable . . . no fuels, no water, no emissions, and no noise.  How do you measure the value of clean air over 40 years or more?  Ask your children, not your politicians!

Chet Boortz, CEO

SES 21 USA

[The comments, positions, and opinions stated above are my own and may or may not represent those of SES 21 USA and its affiliate companies.]


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