Why Now is the Time to Go Solar
Wow, time flies! It seems like yesterday when the Federal Solar Investment Tax Credit, #ITC was first implemented. Here we are, a decade later and what do we have to show for it? One thing for sure is that short term incentive programs are a double edged sword, as many developers chase expiring incentives (federal, state & local) and pull projects forward. This policy induced, industry volatility makes it difficult to successfully operate a solar enterprise through economic cycles and over a long period of time. We have seen manufacturers, financiers, developers and installers alike fall victim to this practice. We have seen the Titans of the industry go bankrupt in a sector that is doubling every 2 years. It seems as though the industry has been commoditized at its very infancy. Technology advancement has shortened the #Technology S-Curve and competition is driving down margins.
So then, who is the biggest beneficiary of Solar? The #environment is certainly a beneficiary, but the Biggest Beneficiaries are the Users of the Technology. Especially when we look at commercial enterprises with non-revenue producing rooftops. How are they benefiting? In two words, Cash Flow! Solar Technology increases the cash flow to a business enterprise, by lowering current electricity cost and more importantly mitigating future energy rate hikes.
On June 8, 2014, Warren Buffett revealed that Berkshire Hathaway Inc (NYSE:BRK-B)subsidiary MidAmerican Energy (now renamed Berkshire Hathaway Energy) had invested $15 billion into solar and wind projects. Buffett added, "there's another $15 billion ready to go, as far as I'm concerned." One could argue that today may be the best time for a business or building owner to invest in a solar technology system for their facilities. Commercial system installation cost have fallen some 60% since 2011 to under $2.00 per watt.
What are the Returns?
The US 30 year treasury is yielding under 3%. The Dow is at all-time highs. Corporate revenue growth is sluggish. The annual 30 year returns on commercial solar systems are well in excess of 10%, often 15% or more when you consider the 3% #electricity inflation. Better yet, a solar technology system has known returns year after year after year. Solar panel production is warrantied for 25 years and the average sunlight is known.
Now, as we once again approach expiring incentives and fierce competition, capturing the power of the sun has become a buyers market. Now is the time to begin the process of understanding how solar can work for your business. Now is the time to engage with your Distributive Solar independent solar consultant. Your commercial or industrial property might benefit from installing solar, and we would love to show you how.
by Erik Melang; Co-Founder at Distributive Solar