Solar Overview 101408


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Good summary of the financial benefits of going solar

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Solar Overview 101408

  1. 1. The Benefits Of Solar
  2. 2. How Much Does A Car Cost? <ul><li>Avg. New Car: $28,400* </li></ul><ul><li>Depreciation in first 4 years: </li></ul><ul><ul><li>40-60%** </li></ul></ul><ul><li>For about the same amount of money, Solar is a much better investment </li></ul>* National Automobile Dealers Association **Consumer Reports
  3. 3. Energy Inflation & Volatility <ul><li>Historically, energy rates double every 10 years, however…Oregon natural gas prices nearly quadrupled in the last 10 years! </li></ul>$3.28 $12.58* Wholesale gas prices per thousand cubic feet *Avg. NYMEX-Henry Hub Price 6/1-6/19/08 Source: Energy Information Administration, Oregonian 6/22/08
  4. 4. Impact of Natural Gas Inflation <ul><li>Inflation in wholesale natural gas affects the retail price of natural gas… </li></ul><ul><ul><li>NW Natural asking a 14% rate increase in November, 2008 (20% in Washington) </li></ul></ul><ul><li>AND, it affects the retail price of electricity </li></ul><ul><ul><li>PGE asking for a 14-15% rate increase in January, 2009 </li></ul></ul>
  5. 5. Oil is even worse! <ul><li>Light Sweet Crude, Per Barrel Futures Price (source: NYMEX) </li></ul><ul><li>June 1, 2007 = $65 </li></ul><ul><li>June 23, 2008 = $136.74 </li></ul>
  6. 6. Efficient Homes Appreciate <ul><li>High Efficiency Solar homes appreciate in value faster than comparative, conventional homes 1 </li></ul>$163,629 $227,592 $ gain in property value (mean) 26% 42% Percentage of $ gain in property value (mean) 13%-35% 6%-56% Range of percentage $ gain in propery value $208,410, owned 24 mos. $309,505, PV, owned 14 mos. High-end of gain 17-25 mos. 10-29 mos. Length of ownership (range in mos.) 21.8 mos. 18.7 mos. Length of ownership before resale (mean in mos.) Homes in Comparison Community Homes in SheaHomes Community Variable
  7. 7. Higher Satisfaction With Solar <ul><li>Energy efficiency improves overall buyer satisfaction with the home—when combined with solar </li></ul><ul><ul><li>Table below shows percentage comparison of respondents from homeowners in the SheaHomes communities regarding their expectations about savings on the utility bills 1 </li></ul></ul>21% 17% 19% Disagree/strongly disagree 50% 30% 43% Unsure 29% 53% 38% Agree/strongly agree SheHomes Respondents without PV (n=68) SheaHomes Respondents with PV (n=40) All Shea Homes Respondents (n=108) Response
  8. 8. Efficiency Increases Home Value <ul><li>Solar electric systems increase property value by decreasing utility operating costs. Appraisal Journal found that a home’s value is increased $20,000 for every $1,000 reduction in annual operating costs from energy efficiency. </li></ul>Sources: Appraisal Journal, Oct 1998; NorCal Solar Energy Resource Guide, Oct 2005, “Payback and other Financial Tests for Solar in your home”, Author: Andy Black. Wells Fargo Bank
  9. 9. Solar Rate Of Return Higher <ul><li>Another study found that solar additions to existing homes nets higher rate of return </li></ul>Source: Business 2.0 , November 2006 1)National average, 2)Average cost for 2,000 sq/ft home, 3) California Incentives $15,000 Rebates and tax credits 3 $9,900 Utility savings (5 years) $2,450 -$3,942 Payoff $22,500 $39,920 Home value increase $45,000 2 $43,862 1 Average Cost Solar Energy System Kitchen Remodel
  10. 10. Green Homes Sell For More <ul><li>Portland Metro four county avg. per square foot sales cost: </li></ul><ul><ul><li>Conventional Home Avg. = $185 </li></ul></ul><ul><ul><li>Green Certified Home Avg. = $223 </li></ul></ul><ul><li>Time on market: </li></ul><ul><ul><li>Conventional Home Avg. = 73 days </li></ul></ul><ul><ul><li>Green Certified Home Avg. = 66 days </li></ul></ul>Source: Earth Advantage, May 6, 2008
  11. 11. An Observation about Global Warming
  12. 12. Mt. Hood & Global Warming <ul><ul><li>Mt. Hood’s White River Glacier has lost 61% of its volume since 1982 </li></ul></ul>Photos courtesy of Gary Braasch: . More of his photography regarding global climate change is available at
  13. 13. Does Solar Really Work Here?
  14. 14. The Willamette valley gets as much sun on an annual basis as the US average
  15. 15. Oregon’s Solar Advantage <ul><li>“ Even the cloudiest parts of Oregon receive more sunlight than Germany and Japan, who are currently the world leaders in PV Installations.” </li></ul><ul><ul><li>Frank Vignola, University of Oregon </li></ul></ul>
  16. 16. Better than Florida! <ul><li>“ An average solar water heater in western Oregon will save as much energy, on an annual basis, as an average system in Florida.” </li></ul><ul><ul><li>Christopher Dymond, Senior Energy Analyst, Oregon Department of Energy </li></ul></ul>
  17. 17. Anytime The Sun Shines, We Get Energy <ul><li>Location: Lion’s Gate Inn, Newberg, Oregon </li></ul><ul><li>Date: January 24, 2008 </li></ul><ul><li>Time: 2:00 PM </li></ul><ul><li>Outside Air Temperature: 37 F </li></ul><ul><li>&quot;Real Feel&quot; (AccuWeather): 26 F </li></ul><ul><li>Conditions: Sunny, winds from NNW, incoming clouds </li></ul><ul><li>Temp in Solar Water Tank: 100 F </li></ul>
  18. 18. Net Metering <ul><li>Excess power is sold back to the power company at retail rates when sunny </li></ul><ul><li>Acts as your battery so when it rains you have credit to draw from </li></ul>
  19. 19. Consumer Photovoltaic (Solar Electric) Incentives <ul><li>Energy Trust </li></ul><ul><li>$2.25/Watt (PGE) or $2.00/Watt (Pacific Power) up to $10,000 </li></ul><ul><li>Paid to contractor to reduce customer cost </li></ul><ul><li>Oregon RETC </li></ul><ul><li>$3.00/Watt up to $6,000 </li></ul><ul><ul><li>Max $1,500 claimed/yr </li></ul></ul><ul><li>Federal </li></ul><ul><li>30% of net cost, NO CAP! (2009) </li></ul><ul><ul><li>Income tax credit </li></ul></ul><ul><li>Example: 2 kW DC System </li></ul><ul><li>$20,000 Installed price </li></ul><ul><li> -$4,500 ETO Incentive </li></ul><ul><li>$15,500 Net price </li></ul><ul><li> -$6,000 Oregon RETC </li></ul><ul><li> -$4,650 Fed tax credit </li></ul><ul><li> $4,850 Final cost </li></ul>
  20. 20. Consumer Solar Hot Water Incentives <ul><li>Energy Trust </li></ul><ul><li>Electric: $.40/kWh up to $1500 </li></ul><ul><li>Gas: $.30/kWh up to $1500 </li></ul><ul><li>Paid to contractor to reduce customer cost </li></ul><ul><li>Oregon RETC </li></ul><ul><li>$.60/kWh up to $1,500 </li></ul><ul><ul><li>Claimed in one year </li></ul></ul><ul><li>Federal </li></ul><ul><li>30% of net cost, NO CAP! (2009) </li></ul><ul><ul><li>Income tax credit </li></ul></ul><ul><li>Example: </li></ul><ul><li>System Savings: 2,700 kWh annually, electric backup </li></ul><ul><li> $8,500 Installed price </li></ul><ul><li> -$1,080 ETO Incentive </li></ul><ul><li> $7,420 Net price </li></ul><ul><li> -$1,500 Oregon RETC </li></ul><ul><li> -$2,226 Fed tax credit </li></ul><ul><li> $3,694 Final cost* </li></ul>
  21. 21. System Payback <ul><li>Historically, Energy Rates Double Every Ten Years </li></ul><ul><li>In a home, for every $1 in annual energy savings created, the value of the home appreciates by $20 </li></ul><ul><ul><li>Sources: </li></ul></ul><ul><ul><ul><li>Appraisal Journal </li></ul></ul></ul><ul><ul><ul><li>Wells Fargo Bank </li></ul></ul></ul>Value Appreciation Payback Model™ Assumed current power rate: $.10 per kW/h Energy Inflation assumption: 5% Annually (Conservative) Property Appreciation assumption: $20 increase for every $1 annual energy savings Estimated System Payback, as proposed: 3 to 5 years For the 2,700 kw/h Solar Water and 2 kw PV examples, previous slides--~$8,544 installed after incentives.
  22. 22. In Conclusion <ul><li>Solar improves the value of your home </li></ul><ul><li>Solar insulates you from energy inflation and volatility—energy cost savings escalates as energy rates inflate </li></ul><ul><li>Solar saves energy by creating energy </li></ul><ul><li>Solar payback is aggressive, when considering market factors </li></ul>
  23. 23. Solar Hot Water Side-wall mounted, drain-back system, PV powered pump, offsets 2,700 kWh annually
  24. 24. Hybrid 2 kw PV with space and water heating
  25. 25. 5.6 kw PV system in Oregon Wine Country
  26. 26. Thank You! Contact: Keith Knowles Vice President, Solar Consultant 503-317-6536 [email_address]