Thursday, October 25, 2007
In response to “City Begins Work on Solar Panel Plan” [News, Jul. 19], I wanted to clarify a few of the economic issues regarding solar power.
When local governments, which don't pay taxes, purchase solar systems, it can take a long time (20-30 years) for them to pay for themselves because cities and counties can't take advantage of the available tax credits or depreciation—both of which are available to businesses and can significantly reduce costs.
However, if local governments are willing to consider larger systems (300 kilowatts or bigger, enough for about 50 homes), much better financing options become available. "Third party financing" allows any large power user to buy solar power with no upfront costs. Instead, a third party buys and owns the system and sells power to the end user, just like a utility. This financing option makes discussion of "payback" times irrelevant because there's nothing to pay back. And if a contract price is locked in for 20 years, as is normally done, these systems can actually save money because utility prices are rapidly increasing, even if it costs slightly more in the first few years.
For more on solar power options for homes, businesses and local governments, contact the Community Environmental Council at 963-0583 x107. —Tam Hunt, Energy Program Director, Attorney, Community Environmental Council