Making money on energy
When you’re considering alternative energy production for your home, cost is an important factor. PV (photovoltaic) solar panels can seem great in concept, but if they are more expensive than other types of energy, it can be a tough choice. That is why I so appreciated the way the solar costs were described on a project I am currently working on in Miami.
The project is going to have a 10kw system (there are multiple buildings in the project). The company we have been working with, Electron Solar Energy, explained the finances of the system not just in terms of the cost but also the savings. The cost of the system will be $38,643 (after the $20k Florida state rebate and 30% Federal income tax credit). Compared to current solar costs in California, this is pretty good. But where it begins to make sense is when it is reviewed with the cost savings. The PV solar system will have a 25-year warranty, so the cost savings for the energy produced by the solar is estimated below (and is a conservative estimate):
Comparing the $279,182 electricity production to the cost of $38,643 results in a cash benefit of $240,539 over the 25 years. Not too shabby.
And for people like me who do not pay cash up front for their home, the monthly costs have a more immediate impact. By using a mortgage calculator for the cost of $38,643 for 25 years at 6.5% is results in a monthly mortgage of $277. While in the first year of production, the mortgage for the solar will cost $21 more each month than the energy savings, by year two the solar mortgage will cost $2 less each month, by year three it will cost $24 less each month, and so on until the 25th year, when the mortgage will still only be $277 while the energy bill projected would be $1638. Nice.
If we are going to live in smarter, more efficient ways that use our earth’s limited resources wisely, it needs to also make financial sense. I commend companies who are making alternative energy systems affordable and showing us that it can make smart financial sense to build and live in a greener way.
This entry was posted on Wednesday, April 21st, 2010 at 6:00 AM and is filed under Green. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.