Solar Energy in the Midwest

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Solar Gets Cheaper, but Not Equally

Solar Gets Cheaper, but Not Equally.

In January, I plotted the size of state solar markets against their average installed cost and found surprisingly little correlation.  When Lawrence Berkeley Labs put out their 2011 version of Tracking the Sun (IV), it was possible to update the chart, which I did in two stages.

The first chart simply overlays the 2010 average installed cost on the original chart, with arrows indicating the movement of the prices in most states (I ran out of room in the small market states).   It’s almost like a rainbow rain of falling solar prices.

The Grid Price

Utilities like to compare new electricity production to their existing fleet, which means comparing new solar power projects to long-ago-paid-off (amortized) coal and nuclear power plants that can produce electricity for 3-4 cents per kWh.  But this is apples to oranges, because utilities can’t get any new electricity for that price, from any source.  

A more appropriate measure of the grid price is the marginal cost for a utility of getting wholesale power from a new power plant.  In California, this is called the “market price referent” and it’s around 12 cents per kWh.  The figure varies from state to state.  

But while the market price referent provides a reasonable comparison for the cost of utility-scale solar, it’s not the number that matters for solar installed on rooftops or near buildings.  In those cases, the power is used “behind the meter,” and depending on the type of state policy for net metering, the customer can essentially spin their electric meter backward when their solar panels produce electricity.  That means that solar power is really competing against the energy cost on a utility bill, known as the “retail price.” 

The following map shows the average retail electricity price by state across the U.S.  It ranges from 8-10 cents in the interior to 15 cents per kWh and higher on the coasts.  

For full article go to: http://energyselfreliantstates.org/

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A Letter from our CEO – Donna Napolitano

Energy, who has it? Who wants it? Who can own it?

In these days of economic uncertainty one thing is certain is our unquenchable thirst for more energy, a valued precious commodity that is not only in demand, but growing more precious every day.  Our life is built around the need for power from the moment we awake to the radio in the morning and step into the heated bedroom floor that warms our feet, to walking into the kitchen to grab a steaming cup of coffee set to be ready the night before, and that is just the first few minutes of our day.  Let’s face it; running our daily life is built around the need for power.  It is the one thing that brings us our secure life style, allows us to communicate, manage our household, our business, our social contacts, and our American life style every day.  Who has it? Who wants it?  Who can own it?  You can!

Since the day Thomas Edison invented the use of electricity with the light bulb, we have been on a journey to bring energy to our lives in a clean, reliable, cost-effective manner.  Available now is the technology to harness the power of the sun, the inexhaustible fusion plant, for use in our homes, businesses and everyday life.  Solar panels convert those light waves into usable energy sent through the power lines to our home or business.  By installing solar panels, you now can invest in our own energy plant and curtail the raising cost of energy in the future.

The dollars you sent to the utility company month after month and will never see again can now be directed to financing vehicles that allow you to invest in our own energy plant.  Think about it, where can you put your money today in a secure investment that grows at 8% – 15% a year, has a ROI of 8-10 years, and will actually pay you thousands over the life of the product, 25-30 years.  To make the pot even sweeter, Federal tax credits are available for investors at 30% of the entire investment until December 31, 2016.  Another opportunity is the production of REC (renewable energy credits), traded on the open market can add an income to your portfolio of $200 – $800 per kWh.  With many more states jumping on the band wagon to boost use of renewable energy they offer the options to purchase your REC’s and add them to their portfolio.

Many investors are holding on to their dollars or capital, unsure where to invest to guard against loss. This investment can offer you stability and put you in control as you monitor your energy usage and patterns and accumulate credits on your utility bill.  Spinning the dial backwards on your energy meter can bring a smile to your face.

Solar is one of the only products that I have heard potential buyers ask “What is the ROI” (return on investment).  Take a look around your home, what have you invested in that will pay you back in the next ten years? Surely not the new big screen TV, Bose surround speaker system, refrigerator, granite counter tops, or the new car in the driveway, in many cases these items will no longer operate and be long gone.  Solar is one of the only products you can purchase that appreciates over time as energy prices rise.    This investment will also add value to your home.  Fanny May and Freddie Mack have released statements that support investment in solar will add value to your home.  The installation of even a small system of     3 kW (3,000 watts) will add approximately $16,500.00 to the value of your house.  Compare 2 houses side-by-side, both have the same square footage, style, and design.  One has a solar system and no or low energy bills and the other pays high ever rising energy cost each month increasing your monthly operating cost, what would your choice be?

May I suggest you look to the clean, renewable, energy for your power?

As our demand for power grows and the resources of coal, nuclear, and oil release their toxic fuses and deplete our natural resources, a clean solution is at hand.  You may be the first one on your block to move forward with solar power, but you could be an example for energy independence with cash in your wallet and a positive influence on our children’s future.  – Donna Napolitano

 

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