Since 2012 I’ve been in the solar electric industry. During this period I’ve been exposed to various installers, products, install techniques and business models. I’m happy to report that I represent two of the premier solar equipment dealer-installers in northern California.
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Solar Electric-What Influences Our Decisions?
There are three main elements that influence solar electric: technical, economics, and for homeowners, aesthetics.
Of the three elements I mentioned above, namely economics, one significant marker that affects solar electric is the federal income tax credit. By end of 2019 the tax credit will reduce from 30% of gross install cost to 22%. This will reduce to a constant 22% gross install cost by 2021 for homeowners and 10% by 2022 for businesses. Of course, businesses are able to capture a depreciation schedule. More about that particular benefit later.
Solar Electric For Your Home
For homeowners in PG&E territory (this is where my projects are), who endure electricity bills of $150 a month or more, solar electric is an excellent hedge against electricity rate hikes. Installing solar electric on your home increases it’s value to the extent of the cost and depreciation of the system. And you cannot underestimate ‘curb-appeal’ when it comes time to sell. All things being equal, the home with solar electric will be more attractive than one without.
Solar Electric For Your Business
For businesses, solar electric improves cash flow and lowers operating expenses. However, as I hinted above, your increased savings may be treated as additional income. Definitely consult with your CPA or financial advisor. Even so, more and more commercial solar electric systems are being installed and commissioned.
Solar Electric Today, Tomorrow?
A few months ago, I happened to meet a prospective customer whom I first met about 5 years ago. At the time of our first meeting, he was insistent that solar technology would advance so quickly that his commitment would be worthless in a few years.
Not even taking into account the inflation rate of electricity costs, and the tax credit he’s missed, it’s taken 60 years for solar technology to get to where we are today. The most influential changes are the financing methods that enable its acquisition. There are leases (commercial and consumer), power purchase agreements and financed purchases including the PACE program. And while ‘Cash is King’ is a cliché, using cash to purchase solar electric still offers the best return.
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