A Five Minute Crash Course on Solar Power: History and Investment

November 3rd, 2017 by admin

Solar power plants have been around since the 1980s, but in the past 40 years the technology has come a long way. The potential applications have been reimagined and reinvented. There are new implications (environmental, political, etc.) that have shaped solar based technology as we know it today. We dive into the past, present, and future of solar power in the US. Let’s take a look at solar power in a macro sense. The technology has been around for decades, but in the past 10 years or so it has become more easily accessible, as well as efficient. We see many new products today that not only couldn’t have existed, but probably wouldn’t have, because there wasn’t the same level of demand for energy alternatives and the Green Energy movement was far less prevalent. In the 1980s you could get a solar powered calculator and not much else. Today, nearly any electrical device is available as a solar powered version or can be charged with a solar powered charger. Many homes and businesses have solar panels contributing to their buildings electricity, and there are federal incentives offering tax deductions at as much as 30% for investing in solar energy systems. The solar industry is booming right now. Research by GreenTech Media suggests more than 65% of all solar PV capacity has been installed since 2011. However, before you empty your life savings into solar stocks, know the economics of solar power will vary depending on where you live in the country. The ROI of solar power varies wildly state to state. This is partly due to the nature of the technology (more sun = more power = more money saved). It is also due to varying state level incentives, and of course, solar power is subject to the same economic factors that make milk prices vary state to state. We can’t make sweeping statements about whether solar power in general is a good investment, at least not accurate ones. What we can do is take a look at things in Utah and help you find out if it’s a good investment for you. The Solar Energies Industry Association lists Utah as the number 6 state for solar power in 2016 with about 1500 MW installed in 2016 and nearly 300,000 homes powered per MW. This data shows that solar power systems are growing in popularity -but that does not necessarily mean it’s a good investment. Running the numbers in Orem Utah, Total System Cost - Tax Credits / $ Energy Saved per year, shows it takes an average small 5KW system 14.5 years to pay for itself. The system itself should cost about $14,600 and saves about $1000 a year. A large 50KW system costs about $135,000 and saves a little over $10,000 per year, meaning you are in the black in about 13.5 years. These numbers are better than average for the entire country but only by a small percentage. The same 5KW system in Jackson, Mississippi (Mississippi is the lowest ranked solar state according to the SEIA) would pay for itself in 15.5 years, and the 50KW system would in 14.7 years. Solar Energy is an exciting technology with a lot of potential. Solar panels have been getting cheaper and more efficient over time, but are they good enough now to make the leap? We’ll leave that decision to you. In any case, now you’ve got some basic information on solar power and its current trajectory, as well as some more specific financial information. If you found this useful and/or interesting, be sure to send us a message, or check out the related articles section.   Kender Ostlund

Posted in: Technology