PV as an investment [RE-wrenches]

Joel Davidson joeldavidson at earthlink.net
Mon Sep 10 12:32:42 PDT 2001


Selling stuff, even good stuff, is not my idea of living the good life. I challenge
people to reduce their energy consumption by at least 50% without buying more stuff.
If everyone in the U.S. cuts their consumption at least 10%, I'll quit selling PV and
start enjoying heaven on earth. The bad news is, Americans are not going to consume
less and billions of people in developing countries aspire to consume like Americans.
So I guess I'll just have to keep selling PV until everyone becomes a net energy
producer or all of the planetary resources are used up.

Back to PV as an investment. There has been a lot of good discussion about selling PV
and answering objections about payback and break-even. But no one has commented about
the math I used to come up with the return on investment. Are my numbers right?

1kW AC PV system
5 sun hours per day
1,825 kWh/year PV production
$0.12/kWh utility rate
$219 value of PV
$10,000 PV system cost before rebate
$5,500 PV system cost after California $4.50/W rebate
3.9% return on PV system as an investment ($216/0.039 = $5500)
35% income tax rate
3.9% is equal to a 5.2% untaxed return on investment

If interest rates and stock returns were not so low and there were no PV rebates, I
wouldn't even bother with this problem, but 5.2% is better than CDs and most stocks
lately.



jay peltz wrote:

> Hi All,
>
> Heres my question.  Sure I give the customer many angles to make the system cost
> effective, but how many people run into problems when you suggest:
>
> "Well its cheaper to reduce than produce.  We need to get you a new refer, washer,
> lights etc etc.  "
>
> Then I show them the math, and its like major blank time.
>
> Just wondering what you all have run into.
>
> jay
>
> peltz power
>
> Smitty wrote:
>
> > Howdy all. Reading all these wonderful posts about the payback wall people
> > have built around themselves before contacting us, something occurred to me,
> > and that is this. I don't know how old all of you are, but I suspect most of
> > us are middle aged. After WW II, a lot of lads came home to a booming economy,
> > and badda bing, badda boom, the baby boom was on. Young couples in the
> > strongest economy on earth, out achieving the American dream for decades. He
> > is where we come in. A generation watching our parents getting houses, new and
> > better appliances of all kinds, cars with fins, and the marketing boob tube
> > teaching us new, bigger and better.
> >
> > Many of the customers we deal with nationwide are of this generation. Our
> > company roots are in solar thermal, but we to, still hear the "P" word and one
> > of my other dreaded words, "efficiency".
> >
> > Since some of these baby boomers are now yuppies, I find they look at things
> > they don't understand as an investment, as opposed to a Ford Expedition. ME
> > WANT. I'll spare you the whole spiel, but it is quite simple to explain the
> > economics of solar thermal vs a furnace or water heater in terms of an
> > investment. About this time the Mrs. pops up, "It will make our house look
> > ugly.". And so it goes. Sometimes the wall comes down (sometimes on my head).
> >
> > One last point. I find it is much easier to sell solar to our BB brethren,
> > after they have already made a luxury purchase, i.e. a remote hunting cabin,
> > RV or a cold swimming pool.
> >
> > Smitty
> >
> > "Bill Loesch, Saint Louis Solar" wrote:
> >
> > > My compliments Jeff for the creative thinking. Anyone else have an
> > > effective reply to utility comparisons?
> > >
> > > Bill Loesch
> > >
> > > RE-wrenches said:
> > > >When asked either "what's the  payback", or "how does this compare to the
> > > utility co.", I simply
> > > >said  "It's the cheapest clean power you can buy."
> > >
> > > - - - -
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> > >
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> To send a message: RE-wrenches at topica.com
>
> Archive of previous messages: http://www.topica.com/lists/RE-wrenches/
>
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>
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> Moderator: michael.welch at homepower.com
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