Montante Group

You don’t save by waiting for solar

April 9th, 2014

Recently I was making a presentation to a business group about the virtues of clean energy through solar power.  I was engaging, enthusiastic, and the information was compelling on so many levels.  I think it was the sock puppets.  Regardless, I was on a roll.  The audience was locked in and all their questions were being handled with effortless skill, until a guy raised his hand and asked, “I understand that the price of solar panels has been dropping dramatically over the past few years, is that true?”  I responded with, “Shut up, this presentation is going well, stop trying to crash it you troll!”… on the inside…on the outside I said, “Excellent question, that is true, yes.”  To which he continued, “Then why wouldn’t we all wait for continued pricing decreases so that we might yield higher financial benefits from a solar array?”  If I was in a saloon, the piano player would have switched to playing minor keys.  I don’t know if you do much public presenting, but if you do, then you know the type of person I am describing here.  The self-important know-it-all who loves to put the speaker on the spot.  And in my presentations, there is only room enough for one self-important know-it-all.

What did I do?  I smiled.  That obnoxious smile you use when you know you have just set a trap, and someone has stepped into it.  You see, I get this question all the time.  It is a logical question to ask when things are in a deflationary cycle.  If interest rates are falling, why refinance until you know they are as low as they can go?  If the price of this computer, smartphone, iPad, keeps going down, then why not wait?  The difference between all those items and a solar array is that no one is helping you pay for the item.  Someone IS helping pay for the solar array, and their assistance is falling faster than the price.  And of course you want proof, so did Mr. Troll.  Ok, here it is.

Please note, I cut and pasted that table all by myself.  Thank you.  Please also note, that using an average rate of $.14/kWh for residential electricity in New York State, this solar array creates savings of approximately $700.00 per year.  We use 5kW in this example because back in 2008 NYSERDA (New York State Energy Research Dev elopement Authority) capped their incentives for residential systems at this level.  In order to keep the comparison consistent, we left the size the same.  However, NYSERDA has modified their levels to provide incentives for residential systems up to 25kW.  Back to the chart.  Now then, a system put in service back in 2008 would have cost the homeowner $4,750 out of pocket, after incentives.  But he/she would have saved $700 in electricity expenses by the end of year one, and $4.200 by 2014.  So even though he was correct in predicting the dramatic drop in system costs, the out of pocket costs remained very close to the same amount.  And though he would have saved $725 in out of pocket costs by waiting until 2014, he would have lost $4,200 by not purchasing in 2008.  That $4,200 is real cash that went to the utility company.  It could have gone to a college fund, a retirement account, a vacation, or an elective plastic surgery fund.  But it didn’t.  And like Phillip Phillips says, its “Gone, gone, gone.”  Let’s expand this a bit and multiply these numbers by ten, now twenty, now forty.  These are the new levels NYSERDA is supporting for commercial, non-profit, and municipal systems.  And although the commercial power rates tend to be lower, the model holds.  What could you do with that amount of cash?

If you have been waiting to install a solar array on your house, your office, or manufacturing facility because you think the pricing drop will create more savings, then you are losing money.  You are losing money.  You are losing money.  You are losing money.  I have to write a certain number of words so I think I will emphasize the four most important until the end. You…are…losing…MONEY!!!  Does that answer the question?


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