• Buzz about solar is everywhere and you are likely to be asking yourself if it is right for you. One question that often comes up is, “Solar looks like a good deal now, but should I jump in or wait for a better deal?” Here’s full disclosure up front – I work in the solar industry and my opinion is “now”- but please read the following and decide for yourself.

• The solar 30% federal tax credit program is set to expire at the end of 2016. Without it, purchasing your solar system will cost 43% more than it does now. For example – a $14,000 system would cost $20,000. Also, as solar has been shown to add value to your home, those who act before the deadline would get a windfall boost in value.

• Industry predictions are for solar prices to fall a modest total of 10% over the next five years. At present, prices have stabilized following years of decline (50% since 2010). In the short term, prices may increase in response to increased demand and the bottleneck of equipment and installation capability caused by people trying to get in under the wire of the 2016 federal tax credit deadline.

• At present prices, solar owners who have made a cash purchase are saving approximately 50% vs. PG&E rates and realizing a 15-20% return on their solar investment (essentially tax free, you aren’t taxed on your savings but you are on those dollars that you pay to PG&E). And what about PG&E rates? The historical average in CA is about a 5-7% increase per year for the past 40 years. So all indications are that the savings you accumulate by acting now will far outweigh future solar price drops.

• Here’s an example: Let’s say your present PG&E bill averages $200/month and your average cost per kilowatt hour is 22.4 cents. Six years from now you will have paid PG&E about $16,000 and that money is gone. For that $16,000, after the federal tax credit, you could have purchased a solar system that would have “zeroed” and locked in your PG&E bill to its minimum base charge and your cost per kilowatt hour to 7.2 cents. Your 25 year system lifetime savings are estimated at $88,000 (“tax free”). In addition, you have a valuable asset on your home – current government studies estimate the increased worth at $24,000 at the time of installation. I can’t imagine an imminent price drop that would outpace those savings!

• How about new technology? There are numerous research projects underway and I have no doubt that improvement in solar panel efficiency, energy storage and smart energy management are around the corner. However, there is nothing at hand ready to blow the present proven, scaled up and mature technology out of the water or justify loss of savings by waiting. In fact many of the new products will be value add-ons to present systems.

• Then there is the question of future PG&E actions. Net metering, the contract between you and PG&E to buy back at retail prices the excess solar energy that your house isn’t using, has an uncertain future as PG&E is lobbying against it. The present agreement was set up to be changed when solar reached 5% of grid production and that is projected to occur by 2017. Those who have solar systems already in place will be grand-fathered for 20 years if net metering is dropped or changed. Another PG&E consideration is the grid capability of handling the solar energy input flows. Hawaii has already run into this and has put limits on new solar systems. So this is another potential bottleneck.

• None the less, solar has arrived and will continue its rapid expansion. There are presently 174,000 solar jobs in the US and plans to train 50,000 vets for more. Solar in the US will double this year. Climate change will continue to be a major driver as solar is a major component of the solution. The International Energy Agency recently announced that each year’s delay in addressing climate change comes at a cost of $500 billion in consequences. More to the point is the message of Pope Francis that we “face unprecedented destruction of ecosystems” and that “it represents one of the principal challenges facing humanity in our day”.

• Financing costs are exceptionally low now, but are predicted to rise soon. Many banks and counties offer solar loans that pencil out cash flow positive immediately.
• So – if you are looking for a risk free investment that yields 15-20% return tax free, saves you 50%+ on your electrical energy cost, adds value to your home, and helps save the world…… is here for you and why wait?


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