Posted on March 26th, 2009 by Energy Without Borders

Solar Power

How to make decisions on which system, manufacturer, solar integrator to use:

When it comes to figuring which system is best for your project, be sure you weigh the right factors that determine the outcome of your investment.

Solar installers and integrators can be caught up in the initial costs of a system and focus on that one initial ($) aspect of the job (cost per watt) to try to land business. It may seem obvious that price is always an issue however, it is much more important and much more critical to the success of the system that the lifetime value/ life cycle output and revenue of a solar investment (solar pv system) is more important to the customer- the actual end user or owner and beneficiary of the system that matters, (COST PER KILOWATT HOUR GENERATED).

Anyone can purchase a cheap product or service in any business. But when it comes to solar, there is an expectation that investing in a solar pv system will generate a return on that investment. So, it is most important to be sure you are weighing the right factors and comparing the right attributes that will guarantee you or the end user customer- that they are going to get what they expect: an OPTIMUM return on their investment.

Optimizing the return on investment (ROI) does not mean getting the cheapest price upfront.

Rather, it is critical to list the expectations and objectives and goals of the solar PV investment. Then match the right products and balance of systems to meet those specific goals.

In most projects, solar installers that bring you the highest ROI for your investment are going to win your business. These installers and integrators will provide the appropriate technology such as Mono, Poly, Amorphous silicone products, based on the projects’ needs.

Then the solar installers and integrators will provide you with the highest quality manufacturer of that technology and product, NOT just the one that happens to be on special that week from a supplier.

Next, they will weigh and compare the guaranteed power output of the solar modules, the conversion efficiencies, the power tolerances, the guaranteed materials warranty and the overall guaranteed output of a system/ module for the guaranteed life cycle of the system.

Now, the credible installers and integrators will show the customer exactly what you are getting, what is available on the marketplace and how they can offer you only a quantifiable solution.

For solar installers and integrators, having the ability to offer clients the highest output for the longest guaranteed life-cycle of the system- is a sure way to gain the ultimate trust and competitive advantage when selling a solar system solution.

Right now the leading guaranteed power output is a 30 year warranty. That’s 5 more years of power than most popular brands to date.

And at 90% power output guaranteed for 12 years, materials warranties are at 10 years, and the manufacturers offering solar products at this level have been in business for over 30 years.

That means as a solar investor/ client, you can make sure your solar installer/ integrator is bringing you the best solution and products and warranties – not just a name brand that you recognize. Name brands that are well known may be appropriate for certain applications. But again, be sure you have identified the objectives and desired outcome of this investment, not just jump in with a popular name and think you made a wise decision.

There are alternatives, there are applications for each technology and no single technology is the end-all to every project.

Ask a professional. Search for 30 year warranties, high, positive tolerances on solar modules and stable engineering design with proper power outputs GUARANTEED.

david@energywithoutborders.com

Now, smarter competition, more educated customers and more sophisticated financial planners see true value in Solar PV investment is with the life-cycle value and cost-per-kilowatt-hour of Solar power produced through the solar PV.

For integrators and installers it is important to buy right but NOT basing decisions on cost-per-watt alone to determine margins, pay-backs, rates of return. Rather, it is the amount of power output- the revenue of a solar system that should determine which products to offer, what will best meet the customers needs for the length of the solar systems’ guaranteed output life.

Whether residential, commercial or industrial, or utility-scale; most Solar PV system investments are made with clear goals in mind: greater savings, getting your pay- back, get a better rate of return, ROI and do so with the lowest risk you can- perhaps while helping to save our planet, reduce dependencies on foreign resources.

Now it is more important than ever to weigh the right choices and do the right calculations and comparisons for your solar investment in order to come out ahead; to meet those goals.

Calculations are to be done to compare technologies, manufacturers’ modules, power output SHORT TERM and LONG TERM guaranteed results as a starting point.

Matching the right solar PV technology and module output to your project determines whether or not your project will be successful. This site shares information and resources to help you see what makes the most sense for reaching your specific solar project objectives. And we are available to help.

No longer is “cost-per-watt” the only factor in your investment. Now much more important is to weigh the Return On Investment (ROI) based upon the power-and therefore revenue- generated from your system- over the life-cycle and expected and guaranteed output of the system. Since you are ‘investing’ in a solar system, it should deliver the most [revenue, savings] for your money or you will have missed your target objectives and you may make a marginal or bad investment.

We can share with you the differences and items to look for that offer the best ROI. info@energywithoutborders.com

Investopedia: Benefits
A significant benefit to PV installation is a lower energy bill, but the magnitude of this benefit depends on the amount of solar energy that can be produced given the available conditions, and the way in which utilities charge for electricity.

The first consideration is the solar irradiation levels available in the home’s geographical location. When it comes to using solar panels, being closer to the equator is generally better, but other factors must be considered. The National Renewable Energy Laboratory (NREL) produces maps for the U.S. showing solar irradiation levels; the tools on its website provide detailed solar information for specific locations within the U.S. Similar maps and data are available in other countries as well, often from government environmental agencies or renewable energy organizations. Equally important is the home’s orientation; for rooftop arrays, a south-facing roof without trees or other objects obstructing sunlight maximizes the available solar energy. If this is not available, panels can be mounted on external supports and installed away from the house, incurring additional costs for the extra hardware and cables.

The second consideration is the timing of solar power production, and how utilities charge for electricity. Solar power generation occurs primarily during the afternoon and is higher during summer, thus corresponding relatively well to overall electricity demand in warm climates because it is at these times that air conditioners consume the most energy. Consequently, solar power is valuable because the alternative methods of energy production (often natural gas power plants) used to meet peak energy demand tend to be expensive. But utilities often charge residential consumers a flat rate for electricity, regardless of the time of consumption. This means that instead of offsetting the expensive cost of peak electricity production, homeowners’ solar power systems merely offset the price they are charged for electricity, which is much closer to the average cost of power production.

However, many utility companies in the U.S. have introduced pricing schemes that allow homeowners to be charged at different rates throughout the day in an attempt to mirror the actual cost of electricity production at different times; this means higher rates in the afternoon and lower rates at night. A PV solar array may be very beneficial in areas where this sort of time-varying rate is used since the solar power produced would offset the most costly electricity. Exactly how beneficial this is for a given homeowner depends on the exact timing and magnitude of the rate changes under such a plan. Similarly, utilities in some locations have pricing schemes that vary over different times of the year due to regular seasonal demand fluctuations. Those with higher rates during the summer make solar power more valuable. (For money saving tips, see 6 Ways To Save On Your Utility Bill.)

Some utilities have tiered pricing plans in which the marginal price of electricity changes as consumption rises. Under this type of plan, the benefit from a solar system can depend on the electricity use of the home; in certain areas subject to rates that increase dramatically as consumption increases, large homes (with large energy needs) may benefit most from solar arrays that offset high-cost marginal consumption.

The third benefit of a solar system is that homeowners can sell solar-generated electricity to utilities. In the U.S., this is done through “net metering” plans, in which residential consumers use the power that they put into the grid (when the rate of electricity generation from the solar array is greater than the rate of household electricity consumption) to offset the power consumed at other times; the monthly electric bill reflects net energy consumption. The specific net metering regulations and policies vary across regions. Homeowners can refer to the DSIRE database and should also contact their local utilities to find more specific information.

The final benefit is the potential effect on a home’s value due to the addition of a solar array. In general, it is reasonable to assume that solar panels would raise the value of most homes. First, there is an undeniable financial benefit to having lower electricity bills as a result of a solar array. Second, the trend toward “green” living means there is growing demand for homes that have a smaller carbon footprint and are powered by renewable sources. Finally, buying a home with solar already installed means the investment is financed (for the homebuyer) through the mortgage. This ease of financing potentially makes solar more affordable for a homebuyer than buying a house without installed solar and subsequently adding a solar array. (For more, see our Investopedia Special Feature: Green Investing.)

Calculating the Financial Viability and the “Levelized” Cost of Electricity
Once the above costs and benefits are determined, a solar system can theoretically be evaluated using the discounted cash flow (DCF) method. Outflows at the beginning of the project would consist of installation costs (net of subsidies), and inflows would arrive later in the form of offset electricity costs (both directly and through net metering).

Rather than using DCF, the viability of solar power is usually evaluated by calculating the levelized cost of electricity (LCOE), then comparing it to the cost of electricity charged by the local utility. The LCOE for household solar will typically be calculated as cost/kilowatt-hour ($/kWh or ¢/kWh) – the same format commonly used on electricity bills. To approximate the LCOE, one can use the following equation:

LCOE ($/kWh) =
Net Present Value (NPV) of the Lifetime Cost of Ownership ($) / Lifetime Energy Output (kWh)

The useful life of a PV solar module is generally assumed to be 25-40 years. The cost of ownership includes the maintenance costs, which must be discounted to find the NPV. The LCOE can then be compared to the cost for electricity from a utility; remember, the relevant price is that which occurs during times at or near peak PV solar production. (Check out Investopedia’s Net Present Value Calculator to try out these calculations for yourself.)

Conclusion
Determining whether to install a PV solar system may seem like a daunting task, but it is important to remember that such a system is a long-term investment. In many locations, solar power is a good choice from a financial perspective. Even if the cost of solar power is found to be marginally more expensive than electricity purchased from a utility, homeowners may wish to install solar power to avoid future potential fluctuations in energy costs, or may simply wish to look beyond their personal financial motivations and use solar for “green” living. (For more, see Top 10 Green Industries.)

by Nathaniel Riley, (Contact Author | Biography)

Nathaniel Riley is a securities analyst at Cohen Capital Management, a wealth management firm serving individuals and families. He oversees fixed income trading and conducts equity research for CCM.

There are a variety of technologies such as mono-crystaline, poly (or multi) crystaline, thin-films, BIPV, concentrated PV, etc.

Each technology has it’s advantages and perhaps, disadvantages and applications which are appropriate or that may vary from one to the other.

It is imperative to know exactly which one(s) are best for you and your project if you want the best outcome from your solar array and your investment.

If you do not know, don’t guess. It is important to find a knowledgeable solar professional that shares your goals in order to make the right choice.

A mismatch of technology, quality, module output or warranty will be the difference between getting a return on your solar investment or creating a very expensive mistake.

We believe each technology has it’s place.

Examples:

thin-films, amorphous solar PV may be great for metal roof systems, low-light conditions, portability and flexibility and more. It may not produce nearly as much power per square foot/ meter as other solar technologies but it may be the best solution in many applications where no other technology would suffice. And, the materials are easier to acquire to make the amorphous PV. Often it is less costly than some other technologies.

And, the opposite may be true: when you need the absolute highest solar PV output in a small, limited area it may be best to use a high-output module producing the most power for the limited area (power density) – even if it does not carry the longest warranties, but these differences must be weighed against the pros-and cons.

We can help you compare. Just write david@energywithoutborders.com; info@energywithoutborders.com there is no cost to find out which is best for you.

When you have ample space and want to get the most value for your investment it may make good sense to use a polycrystaline technology to deliver the best return on investment- as long as all other factors are carefully weighed. It may cost less per watt, it may offer better power generation in lower light conditions, the panel size may be appropriate to optimize your return. But most importantly, if it has a strong power output, a substantial warranty to assure your materials, power output and length of time (life cycle delivery) you expect to receive a return on investment, then you can make a smarter decision.

Remember, if someone is trying to tell you low cost-per-watt is the only thing that matters, walk away. If you invest anything at all in a solar system and it has a short or non-guaranteed life span, it will be a very disappointing outcome for you and/ or investors.

Compare materials warranties from the manufacturer. Compare the power production levels and variations; both short-term and long-term. If you compare you can easily put a value to these and see which modules/ brands stand up to the life-cycle power output and ROI for you. After all, it is your money.

Do you prefer a short term warranty or a long-term?

Do you prefer short power output assurance or long-term?

Is it safer to insure your investment with a higher quality module or a cheap one?

Answers to these seem obvious yet everyday, someone is basing their decision on cost-per-watt, cheapest upfront costs.

If you know how a module is constructed, why some module brands are better and outperform others, then you can make an informed decision.

Please write or call. We’ll try to help answer your questions. And, yes, we have represented multiple manufacturers and various technologies so we have firsthand experience to guide you.

267 893 8332

info@energywithoutborders.com

david@energywithoutborders.com

Call or e-mail info@energywithoutborders.com david@energywithoutborders.com

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Solar PowerHow does Solar give you a high return on investment (ROI)? How do you measure the value? What are the costs and incentives available now to install Solar? What is the "pay-back" and Internal Rate of Return (IRR) for installing a Solar Power system? Who should you use to evaluate your project in an accurate manner? Is it better to Lease, use a Power Purchase Agreement? or Buy a Solar Power System? which of the 8 or 9 Solar technologies will be best suited for your Solar Project? What are the Solar Energy Incentives offered by the government, Utilities?We answer these and a whole lot more. We offer solutions- ones that are designed for your needs, your application, your location, your budget goals and all things related to an effective Solar Power Solution.

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For all clients, local and regional and beyond; Energy Without Borders performs a professional site evaluation and identifies your savings- and income potential from the variety of incentive programs available.

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FAQs : What is the pay-back?

What is the pay-back if you eliminate your utility costs?

The right question to ask is: “what is the pay-back if you continue to give money to the utility companies as they continue to charge you more and more?”

Energy Without Borders works with the most comprehensive resources and network of the leading manufacturers, installers, engineers and various experts to provide the most comprehensive and accurate solution for each project. Whether it’s a small home, typical residential project, a small business or large industrial site, or more,

Energy Without Borders provides the resources to meet the demand.

List of Product and Service Providers

Learn more about Solar here. But it is easier to e-mail us at

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incentives for USA www.dsireusa.org

Click here: comprehensive Pay-Backs outline

Residential – Commercial – Industrial – Municipal – Government Community – Planning – Project Developers – Design & Installation

Solar Energy – compare – Fossil Fuel

100% Pay-Back 0% Pay Back

10 – 20% Return On Investment 0% payout ROI

35+ years of positive cash flow Negative cash flow

Property Value Increase – or 0% Property Increase

Tax benefits ? Double Taxation

Security- energy & geopolitical little to none

Positive Climate Impact only Negative Climate Impact

Social/ Environmental Responsibility Irresponsible

Predictable Cost Vulnerable/ Non-predictable

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How to get a Return On Investment from your Solar Power System; read on-

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FAQs frequently asked questions:

Here are more great questions to ask for your solar project. And a great reason to call on experts such as Energy Without Borders in order to get a more impartial solution that is best for your needs rather than organizations trying to “sell” you on their one particular product.

As Renewable Energy & Solar Project Developers we are able to handle the entire process from beginning through commissioning of projects with the extensive network of the most experienced service providers, product manufacturers, engineers, wholesalers, retailers and all aspects of delivering projects according to expectations. Small, mid-sized and large National or International Renewable Energy related projects are handled through our extensive, experienced and expert network of providers.

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