Why Does Solar Make Pocketbook Sense?

• Generous government incentives help bring down the initial capital costs of the solar system by ~60%
• Cost of electricity from the utility is high and will continue to increase (avg. 6% per year over the last 30 years)
• Solar Systems have an effective life of 35 years +

California Cash Rebate

• Largest, most ambitious solar incentive program in the nation-- goal of 1 million solar roofs in state by 2016
• Property owner receives upfront cash rebate equal to 25% of the total installed solar system cost
• Statewide, rebate is available for solar electric only.  In San Diego territory, additional rebate for solar thermal systems available.
• Rebate level designed to drop as more consumers take advantage of the program So the early bird gets the worm

Federal 30% Tax Credit

• Credit on tax liability for 30% of solar system
• PV and Solar Thermal Systems eligible
• Applies to total cost- equipment, installation labor
• Eligible for credit upon completion of installation (“placed in service”)
• 5-year accelerated depreciation

ROI for Solar

• A solar power system on your building is a long term, low risk, and high return way to invest your money.
• Solar offers an initial annual return on investment of 5-11%.
• This is very competitive with other higher risk investments such as stocks and bonds.
• As utility rates increase the annual return increases.
• Increased  property value with out impact to property tax basis.

Net Cash Flow

Scenario A: Zero-Out Your Bill– 5kW System

Financial Analysis of a Residential Solar System

Scenario B: Peak Load Only (60% of Usage)– 3 kW System
Installed Cost =   $28,000
State Cash Rebate ($2,200/kW x 3kW) = - $ 6,600
Federal Solar Tax Credit                   =    - $2,000
Net Cost                              =    $19,400

Analysis Assumptions:

Loan amount        $18,500
Loan Term        30 years
Interest Rate        7.99%
Current average electric rate    $0.16/kWh
Annual electric rate increase    6.0%

Near Term Economic Benefits

Current  Monthly Usage (Ave.)                   750 kWh
Current Monthly Electric Bill                    $123
Electric Bill After Solar                      $ 36
Monthly Solar Loan Payment (after tax)         $131

Energy Savings

First Year Electric Bill Offset                 $1,035
Decreased taxes (loan interest write-off)       $   463
Total First year Savings                                  $1,498
Increases resale value of your home immediately!

Longer Term Investment Benefits

Cumulative Net Cash Flow (30 yrs.)     $43,000 +
Internal Rate of Return                   12.7%
Simple Payback                 12 years

Commercial System Costing Example– 30 kW System

Installed Cost                      $  255,000
Cash Rebate Amount (at $1.55/W)     $   46,500
Federal Tax Credit 30%            $   76,500
Accelerated Depreciation (Over 5 Years)    $   72,000
Net Cost After Incentives                 $   49,500

Additional significant savings from avoided utility costs!