| Solar Power Will Guarantee Returns |
| Danville and Alamo Weekly |
| March 2011 |
| If site conditions and energy use is right, a solar energy system is an investment that provides guaranteed returns, unlike many other investments. Also, the environmental benefits of solar power are widely accepted. We'll focus on the financial returns provided and how they are achieved. |
| Given the right circumstances, installing a solar system will provide long-term double-digit financial returns. Factors affecting returns on an investment in solar: how much electricity you currently use; how much electricity your solar system produces; how much it costs to purchase and install the solar energy system and the current and future costs of electric power purchased from your utility. |
| Proper sizing of a solar system to reduce highest cost power is one of the most critical factors to maximize financial returns. In PG&E territory, residential power rates vary from $.11 to $.41. Offsetting the expensive top three tiers of PG&E utility rates over the long term with solar makes the investment "payback" itself through these savings. Many companies will size a system to offset all of your electric power; this method may work best for them to sell you the largest solar system, but will create a longer payback time. A good company consults with the client to reduce electrical usage before sizing a solar system. |
| When designing an array, a contractor and customer preference the considerations of aesthetics and production. An attractive and productive array keeps the neighbors happy, and generates the contractor more business. How much electricity a solar system produces depends on how much sunlight the panels receive, air temperature, and the number and nameplate wattage rating of the panels. The suns radiation is converted into DC power by the array then into AC power by inverter(s). A solar system's power output is most efficient when oriented in a southerly direction with minimal shading. Other orientations and some shading are acceptable; many orientations south of an east west line can remain efficient. |
| How much your system costs to install is an important factor. Costs of solar systems vary with the type of system and the complexity of the installation. USA made products are of higher quality and have better warranties than foreign (Chinese) products. When considering products, the main concern should be compatibility of product and future availability of product should there be a need for replacement of any one of the modules or inverter during their greater than 25 year lifetime and warranty. |
| Installation costs are offset by utility rebates, tax credits and system depreciation for home-based or commercial business use. The Federal tax credit of 30 percent for solar installation is available until 2016. PG&E rebates are still available, but, as intended by the California Solar Initiative, they are being reduced as more systems are installed. Your electricity use is a fundamental piece of the investment equation. If you have a moderate electric need, you will reap lucrative returns typically in the 11-16% range over the life of the system. Based on past trends, PG&E electric rates are expected to increase an average of 6.7%/year for residential customers and 5 percent for commercial rates. During the 25- to 40-year lifetime of a solar system, your utility bill will increase more than fivefold. Investment in a solar power system now serves as a hedge against rising utility bills. These power cost increases make solar a compelling investment. Delaying a decision on installation for "new technology" and "lower prices" is a red-herring; new technologies are becoming available, but will not be within financial reach for typical customers for years, delaying installation for lower price expectation will be offset by lower available rebates. |
| Another benefit of a solar power system will be an increased appraisal value of your property. It is recommended appraisal industry practice to increase the valuation of a residence up to $20 for every $1 saved on annual electric bills. Because of California law, an increase in assessed value as a result of this home improvement will not increase your property taxes. |
| As long as rebates and tax incentives remain available to offset installation costs, and as utility rates continue to rise, solar can be a very savvy investment. |
| Mark Becker is a general contractor and president of Semper Fidelis Construction Inc/GoSimpleSolar.com, a Danville-based solar power installation and consulting firm. For more information, visit www.GoSimpleSolar.com or call Mark at 925.915.9252 |
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| For more information, visit our website, www.GoSimpleSolar.com, or contact us for a free solar consultation at 925.255.3345. (Mark Becker is president of Semper Fidelis Construction Inc, a Danville-based solar power installation and consulting firm.) |
