Skip to main content

PV Generation

By April 12, 2012December 26th, 2021Briefs

Now may be a good time to look at PV-photovoltaic generation. According to some, the “price and incentives have never been better.” The supply and demand situation has driven panel prices down to $2-$2.50 per installed watt. Total installed cost is hovering at $5-$6 per installed watt. Some of the industry pundits I talk to say that the panel price isn’t likely to stay this low as demand competes for the resources.

So, how good is solar PV today? Depends on what you want to accomplish and where you are located. If you are in southern California with long solar hours and high electric prices, the payback is good. If you are in the upper Midwest with lower solar hours and lower electric prices, the payback isn’t as attractive. This latter may be OK if you are looking to be “Green” or want to reduce your carbon footprint. Below is a quick look to see if you want to pursue PV further.

This chart assumes 5 equivalent full-load production hours per day of solar which is normal for the upper Midwest. The payback does take into account the 30% federal tax credit but does not include any state incentives. State incentives can be obtained from the DESIRE data base. Some states also have excess energy purchase options or carbon credits which will improve the cash flow of your project. Many states have financing programs for renewable energy as well.

If installing a PV system, ensure the panels are warranted. The normal warranty is 20 years. Also, ensure the system is sized to optimize your payback and desires. Over-sizing a system in a state that just provides net energy metering will not provide a financial benefit beyond the usage of your facility. We recommend getting at least three prices from PV contractors and checking their references. Also, make sure your contractor coordinates with your utility to ensure the interconnection is consistent with your utility’s standards and rules. This is a major safety issue. If your system does not comply, the utility will not allow you to energize your system. Net energy metering and interconnection standards for most utilities can be viewed on IREC’s web site.

Businesses also have the opportunity to lease PV systems installed on their property. Normally, these leased systems will price the electricity produced by the system at 10-15% below the cost of the utilities electricity. Leasing may be available for residential applications as well. The PV contractors can tell you the options they have available. Of course, the higher the cost of electricity, it is more likely lease options will be available.

Michaels Energy

Author Michaels Energy

More posts by Michaels Energy