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 Ever since we started our solar business back in 1980, it was our dream to provide for 100% of the company’s power needs with solar electric. Last summer, after moving to our new location in Grass Valley, California, this dream became reality. With a large south facing roof and all day solar exposure, it was a natural. Taking advantage of the State’s generous solar rebate program as well as state and federal tax credits and other incentives, it was really quite affordable to provide a photovoltaic system large enough to power our store.
Sierra Solar Systems occupies about 2000 square feet, divided into showroom, offices, and warehouse. We have 10 computers, air conditioning, copier, phones and fax, several printers, lighting, and quite a bit of miscellaneous equipment. Our PG&E bill would average about $120 per month for an average power usage of about 750 KWH/month.
Our PV system includes 48 Kyocera KC-120-1 120 watt PV modules, 12 UniRac flush roof mounts, 1 Trace STXR-2500 inverter and 1 SMA Sunnyboy 2500, both with digital displays. We are using both the Sunny Boy and Trace units for comparison purposes. Contact us for the results so far.
1) To demonstrate the operation of an on-grid PV system to our customers, and the community
2) To offset our electric utility bill
3) To test the various system components under “real-world” conditions
4) To determine whether such as system could be cost effective for a small business such as ours
5) To become more familiar with state and federal financial incentives available to small businesses in California who choose to install a PV system.
The question most often asked is: “Is it cost effective?” We posed this question to Keith Rutlege, of the Renewable Energy Development Institute (REDI), in Willits, California. Keith has a substantial background in both PV installation as well as the banking field. He is a recognized expert in financing for renewable energy systems.
Here is the data: manufacturer’s (STC) rating: 5760 watts, PTC rating: 5074 watts, CEC rating (including inverter peak efficiency): 4790 watts. Projected output: 9000 kwh/year, $.16/ kWh, Retail cost: $42,000 (installed), tax bracket: 28% federal, 3% state. The California “buydown” provides a rebate of $21,000, 50% of the installed cost. The federal commercial solar tax credit provides a $2,100 credit, the state income tax credit provides a $2,835 tax credit, which can be carried forward up to seven years. The federal accelerated depreciation for businesses using PV comes to $5,586 plus an additional $558 for the state. The annual energy savings in the first year is $1,440. The net cost of the $42,000 system is $9,921. The life cycle cost per kWh at 15 years = $9,921/ (9,000 x 15) = $.0735 / kWh. At 20 years, it comes to $.0551 / kWh, and at 25 years, $.0441 / kWh. These numbers compare quite favorably with the $.16 / kWh we are currently paying for commercial electricity from PG&E. The “simple payback” = $9,921 / $1,440 = 6.9 years, assuming no rate increases.
With a 10 year loan at 8%, assuming a modest 3% annual rate increase over that period, cash flow would be positive in 9 of the 10 years, at which point the system would be paid for and still have another 10-30 years or more to provide free electricity. Given this financial analysis, we conclude that not only is PV for business extremely affordable, but that given the incentives currently in place in California, a company not taking advantage of PV net metering at this time would be missing a lucrative economic opportunity.
Even more importantly, we have the knowledge that we are reducing the load on the already strained electrical supply, decreasing the amount of greenhouse gasses and other pollutants being released into the air we breathe, and serving as a model of how energy must certainly be produced in the future if we are to survive as a species.
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