|
Save money while you do the right thing for your community's environment
A solar power system was designed for a 20,000 square foot flat roof building in San  Jose, California. This system included 532 flat roof solar energy tiles and two 30kw commercial solar energy inverters. A total of 68,256 watts of peak solar power generating capability is provided (based on manufacturer output ratings).
This solar energy system provides about 100,000 kwh per year -- after taking into account various real-world efficiency losses. The section below briefly summarizes the detailed energy bill analysis, performance modeling and solar energy system design work we did for the customer.
Total costs of the solar energy system were $501,740, including all engineering, equipment, permits and installation on this flat roof. The customer received:
- $255,282 rebate from PG&E as part of the State-mandated Self Generation Incentive Program
- $18,484 California State Tax Credit
- $22,797 Federal Tax Credit
Net costs to the business (not including the accelerated depreciation as described below) were $205,176.
Based on current A-10 commercial electric rates, a 7% discount rate, 30 year system lifetime, 5% annual electrical rate increases, 6% borrowing rates, and 42% combined State and Federal tax rates, this system will save the business $15,105 per year with a Net Present Value of $292,790.
On a cash basis, this business' electric bill went down by $1,259 per month, and their after tax loan payment on the system was $796. Their monthly positive cash flow was therefore $462.39! Moreover, because of the MACRS depreciation schedule used for solar power (photovoltaic) systems, 50% of the system is depreciated in the first year with the remainder depreciated over the subsequent four years. The table below shows the magnitude of the positive cash flows for the solar energy system over the first ten years.
Energy Analysis
Our recommendation to install this particular solar power system was based on a detailed analysis of the business' energy bills, roof condition, shading and orientation, electrical system, local weather conditions, environmental interests, financial goals, economic parameters and aesthetic preferences. This analysis was summarized in a detailed, 50 page report that we presented to the business.
The two bar charts below highlight the results of our before and after energy bill analysis. Note that the solar energy system dramatically reduces energy charges and surcharges (per kwh) in the summer months (when the rates are highest). There is also a reduction in demand charges (per kw).For businesses that are on complicated demand and seasonal rates, the only way to accurately model your savings is to compare your before and after consumption on a monthly basis using actual, on-site conditions coupled with current utility rates.
|
