This week Amaris Company’s Solar Rewards installer account was approved by Excel Energy. Amaris Company is now able to fill out our customer’s application and track progress for them. In addition, all Excel Energy customers are able to select Amaris as their installer on the Excel Energy Web Site. The ability to integrate photo-voltaic solar panels in the new construction process is just one of many direct purchasing relationships Amaris holds that allows us to offer unprecedented value to our customers. If you are interested in a solar solution, we are also offering solar systems separate of our new construction and remodeling activities.
Archive for the ‘Solar’ Category
Solar Rewards Account Approved
Sunday, October 24th, 2010State Solar Subsidy Exhausted
Friday, May 14th, 2010I was told a few weeks ago that the Minnesota state solar subsidy has already been exhausted and it was not clear if the state would replenish the fund any time soon. There is still the 30% federal tax credit and Xcel Energy has the Solar Rewards program which pays $2.25 per watt.
Solar prices are slowly coming down and I have been quoted $5-6.00 per watt for 6kw systems for new homes. With those numbers we are still talking 15-year paybacks. I find that people in the solar industry do not want to talk cost savings or payback and will immediately try and change the conversation to environmental conscience or some other intangible feel good thing.
I am all for a cleaner environment, but I approach all green building strictly from a savings and payback methodology. I believe that in order for consumers to adopt green technologies there has to be a financial benefit. Geothermal is still the better place to spend the money.
Green Tax Benefits & Incentives Part #4
Thursday, February 4th, 2010Does solar voltaic systems make sense in Minnesota? Let’s take a look at combining the current federal tax credits, pending Minnesota state rebate program and net metering benefit to see if it all can make sense.
Example:
4KWp Solar Photovoltaic System approximate cost = $36,000 40,000
- MN State Rebate = -10,000 -10,000
- Federal Tax Incentive = – 7,800 – 9,000
Total Net Upfront Cost = $18,200 – 21,000
Cost to finance @6%, 30yr loan = $109.12 – 125.91 per month
Less: Net Metering (assumption) = – 58.33 – 58.33 per month (assumes 5 sun hours per day, 7,00 KWh per year at .10per KWh)
Monthly Out of Pocket = – 50.79 – 67.58 per month
The above is based on reasonable assumptions. However, each installation is different based on solar equipment & installation cost, equipment performance, sun hours per day, electricity cost, mortgage interest rate, etc.
Another way to look at it is what happens if you pay the net upfront cost with cash out of pocket. Assuming a $21,000 net out of pocket cost the cash on cash return is 3.3% on a tax free basis. Not the highest yield, but better than leaving your money in the bank.
Other Considerations:
- Other incentives may apply depending on location, rural area, utility provider, etc
- Utility companies charge much higher rates in the summer months and the net metering assumptions shown here may be conservative.
- Assuming you stay in your home for an average of seven years (the American average) the cost to you for owning the system is approximately $5,000.00 (e.g. 60 per mo). The loan balance on $21,000 after 84 months is $18,824. If there is a twenty year life, the remaining value after seven years works out to $26,000.00. The question is will the home sell for more than the $24,824 ($18,824 + $5,000) you have invested in the solar system at that point? Not very likely since the out of pocket cost new was only $21,000.
- Your home WILL produce significantly less carbon. While there is no financial incentive to monitor carbon emissions at this time, the cap and trade bill in congress is trying to do just that. A carbon tax would most likely change these calculations considerably.
- You are less likely to have power loss in hot summer days.
So there you have it; as far as I can calculate, installing solar photovoltaic panels in Minnesota is not a net zero cost. For comparison purposes, the $21,000 cost in this example is on par with what it would cost to moderately finish an average basement.
Would you install solar photovoltaic panels given these economics?
