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Sun Volt

Sun Volt Solar

earth, the final frontier

Clean Energy, Clean Environment

We are at a cross roads in human history, we can choose to continue on as we have been, or we can make a change to improve our future and quite possibly the future for several generations to come. We are here to promote energy independence, a better environment, a secure future and a higher return on investment for your hard earned dollar. It is what I believe in, it is why I am in the solar business.

Is it a good time to buy a solar system?

07 May 09 | Commentary

Short answer:  It is always a good time to buy a solar system.

Now is especially good however because there is an overstock of Photovoltaic panels and Thermal collectors.  Prices are lower than they have been in several years.

Of course, going against this over supply is a general lack of credit and/or cautious outlook.  That is understandable in any circumstance because solar systems require a large outlay of money, more so for PV.

Here is a short list of reason why now would be a good time to install a solar system:

  1. Lower prices.  Most distributors have an overstock of PV panels on their hands that they would love to move.  Prices have dropped about as far as they can go without some companies going out of business, which would be bad.
  2. Installers (like my self) are looking to fill in some installation dates on our calendars this summer.
  3. Energy prices are relatively low but that will change once the economy begins to recover even a little bit.
  4. Excess government borrowing and huge national debt is likely to trigger high inflation.  Now would be a good time to get your energy prices locked in for the next 20-30 years.

Increased oil prices may be coming sooner than most people think.  Right now Crude prices are slowly moving up to $60.00 per barrel.  Motor fuel is inching up slightly faster because refiners have closed down several refineries to put some downward pressure on the supply side.

High inflation is almost inevitable at this point.  There does not seem to be any other logical conclusion about the US financial system other than the creation of vast amounts of dollars by the Fed to bailout banks will have consequences.  Look for inflation in the mid teens starting in mid 2010-11 or so.

When a homeowner purchases a renewable energy system, they in essense, lock there energy prices at a certain rate for the life of the equipment.  For example, if a 2 KW PV system costs $7,000 (after incentives)  installed and generates 79,000 kWh over the next 25 years, the cost of that electricity is $0.08 per kWh.  Less than half the current NY state average of $0.165 per kWh.  That is a great hedge against energy price inflation.

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07 May 09 | Commentary | Comments (0)

Something to think about when calculating ROI

07 May 08 | Sales, solar thermal

In my sales manual, I have a whole section devoted to Return on Investment (ROI) for SDHW systems. Basically, it shows the money saved by reducing energy use vs. the cost of the solar system minus the incentives. I have several charts that show the different conventional fuel type and how they compare with SDHW, when the payback will be, what a payment would be on a financed system, etc. Most clients eat this up as it is the nuts and bolts of any sales presentation.

One problem I have is predicting the future price of energy. For the purpose of the sales presentation, I use a standard 2.3 percent inflation figure. As everyone knows, energy has been rising at a much higher rate than that.

I read a very interesting article on The Oil Drum about the possible future prices of a barrel of oil. It does not look good. Grant it, these guys are the peak oil gloom and doom predictors, however, it must be said that everything they have predicted so far has come to pass more or less. Based on market pressures, their analyst is predicting $200.00 per barrel oil by 2010 and a steeper rise after that. This is supported by Goldman Sachs group which states:

The possibility of $150-$200 per barrel seems increasingly likely over the next six-24 months, though predicting the ultimate peak in oil prices as well as the remaining duration of the upcycle remains a major uncertainty,” the Goldman analysts wrote in the report dated May 5.

This is a chart from Oil Drum showing predicted prices for the next decade:

price of oil forcast oil drum

As goes the price of oil, so goes the price of electricity, propane, heating oil, natural gas, food and all the other energy sources. Of course, this is a difficult concept to convey to most people because they don’t understand how much our society depends on oil to function.

The current high gas prices at the pump are only a small inkling of what is in store for the next winter’s heating season. I have a feeling that a lot of people are going to have to make some tough choices next winter.

As always, it is difficult to tell what the future has in store for us. Without being too alarmist, I try to convey to the potential client that now is the best time to install one of these systems because as the price of energy goes up, so will the price of materials. A small sacrifice now may reap large rewards later on.

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07 May 08 | Sales, solar thermal | Comments (0)