At Home in Berks August 2017 - 22

ANGLES

What You Don't
Understand About
Solar Economics
is Costing
You Money
By Jim Kurtz, President, RER Energy Group

W

e talk to businesspeople in Pennsylvania every
day about the benefits of solar energy. While most
Americans would like the U.S. to use more solar energy (as many as 89%, according to Pew Research), Pennsylvanians tend to have three unfounded biases about solar energy
that lead many to believe solar might not be for them.

should last more than 30 years) and leads to another
30-40% of the project cost coming back in the form of
reduced tax payments;
2.

The value of the electricity generated from the free
fuel from the sun is 6 to 10 times the value of the net
investment and operating cost of the array. This takes
into account maintenance costs which are extremely
low for solar clients since solar involves no moving
mechanical parts;

3.

Solar arrays create electricity at an effective cost of
approximately $0.03 to $0.04 cents per kWh for the
next 20 to 30 or more years. Most businesses are paying $0.06 to $0.10 per kWh today depending on their
location and that will increase over time.

4.

When structured correctly, solar projects are cash
flow-positive in the first year. Most businesses invest
20% of the cost of the project and borrow the rest of
the required funds. They receive the 30% ITC as well as
60% of the depreciation value in the first year and are
therefore cash flow positive within a few months, and
throughout the project.

Myth #1:

PA solar grants have gone away, so solar no longer "works"
in the state.

FACT:

Prices have come down so much that solar works
without PA incentives.
Solar prices have dropped so dramatically in the past five
years that "all-in" costs, net of incentives, are now significantly
less than they were just a few years ago. System prices have
dropped 70% since the PA Sunshine Program was available for
businesses, meaning your savings potential are higher today
than they were then.

Myth #2:

Solar is good for the environment but not for my bottom
line.

FACT:

Solar economics are great for business.
1.

22

Incentives still cover the majority of the costs today.
These include the Federal Investment Tax Credit (ITC),
which covers 30% of the project cost, and the Modified
Accelerated Cost Recovery System (MACRS), which
allows for depreciation over five years (for an asset that
AT HOME IN BERKs August 2017

Myth # 3:

With recent increases in the supplies of natural gas, there
is less need to worry about the possibility of future energy
price increases.

FACT:

The U.S. has become a net exporter of natural gas, and this
is driving up domestic prices as they move towards higher
international price levels.



Table of Contents for the Digital Edition of At Home in Berks August 2017

At Home in Berks August 2017 - 1
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