Report recommends shifting power-line money to solar panels

By: DAVE DOWNEY - Staff Writer
Engineer says one-third of San Diego's electricity could come from rooftops by 2020 | Thursday, October 18, 2007 9:58 PM PDT

SAN DIEGO ---- For the cost of constructing a controversial 150-mile power line through the backcountry, San Diego County could boost its electricity supply about the same amount by offering incentives to home and business owners to install solar panels on roofs, a new report says.

Utility officials and supporters of the proposed power line immediately criticized the report Thursday, calling it unrealistic. Environmental groups and elected officials who oppose the line commended the study as a forward-thinking, practical blueprint for steering society into a new era of clean electricity generation.

Authored by local engineer Bill Powers, a prominent power-line opponent, the report states that a $700 million incentive program could multiply the local energy supply from solar panels from just under 40 megawatts today to 920 megawatts in 2020. Powers said he was asked to tackle the project by the San Diego Foundation, which was seeking to examine alternatives to the Sunrise Powerlink.

With a 1,000-megawatt capacity, the proposed 500-kilovolt Sunrise transmission line that San Diego Gas & Electric Co. wants to build would run through Ramona, Rancho Penasquitos and Anza-Borrego Desert State Park. A megawatt, the standard measuring unit of electricity, is generally enough power to keep the lights on in 750 to 1,000 homes, although more is needed on hot summer days.

Christy Heiser, a San Diego Gas & Electric spokeswoman, said, "We encourage healthy debate about the future."

However, Heiser said, utility officials do not believe that Powers' blueprint will work.

"From the solar aspect, we don't believe it is a realistic plan," she said.

San Diego Councilwoman Donna Frye, speaking at a news conference in downtown San Diego to release the report, disagreed, calling Powers' plan is a realistic model for "local, secure and decentralized energy."

Also speaking at the outdoor conference was Assemblywoman Lori Saldana, D-San Diego. "Today's weather demonstrates why San Diego has the potential to lead the state in moving toward renewable energy," Saldana said, referring to the clear, sun-filled sky.

The rooftop solar strategy is the cornerstone of the report's suggested blueprint for meeting San Diego County's electricity needs between now and 2020, with the goal of slashing greenhouse gas emissions associated with the power supply by one-third. The blueprint also proposes to curb electricity use through conservation and better building design.

"Global warming is the issue of our time, and we must achieve the maximum feasible reductions in greenhouse gases," Powers said in introducing the report.

By following the blueprint, the region could triple the portion of its electricity that is generated today from solar and other nonfossil-fuel sources to 36 percent by 2020, the report states. And if regional leaders were to decide on a ratepayer-financed incentive budget twice as big ---- $1.5 billion ---- as much as half of San Diego County's electricity could come from such sources.

The 158-page report is titled, "San Diego Smart Energy 2020: The 21st Century Alternative." It was written by Powers, prepared by E-Tech International of Santa Fe, N.M., and funded by a $30,000 grant from the San Diego Foundation. The foundation is a charitable group that has awarded more than $400 million in grants for quality-of-life projects over three decades.

The report's conclusions were attacked by supporters of the Sunrise Powerlink, a $1.3 billion project that is projected to cost regional ratepayers $7 billion over 40 years. Because San Diego Gas & Electric customers would be asked to foot 10 percent of the cost, the report assumes that at a minimum, area consumers would pay $700 million. That's the money Powers proposes to shift to rooftops.

"I think Mr. Powers' plan is completely unrealistic," said Todd Voorhees, vice president of public policy and communications for the Downtown San Diego Partnership, and a spokesman for a coalition of county businesses that back the transmission line project.

Voorhees said the problem is that even with incentives, homeowners would wind up paying thousands of dollars up front to install solar panels.

"I definitely don't have the money to do that," he said. "And I don't think most other people do, either."

However, Powers said the plan assumes that only about 10 percent of the solar would be on homes. He said the rest would come from large solar photovoltaic systems ---- ones capable of storing electricity ---- on the broad roofs of big factories and office buildings.

"With the incentive budget, the cost of solar power will be at or below the utility rate that they are paying right now for their electricity," Powers said.

Maintaining that the plan is indeed practical, Powers said San Diego's public school system could serve as a model. The report states that the district contracted with a Los Angeles firm to install panels on 14 schools, with the ability to generate 5 megawatts. The firm owns the panels.

Besides the financial incentives, Powers said San Diego Gas & Electric could help by creating a rate structure that encourages people to install solar panels. And the state could help by opening a way for solar panel owners to sell their surplus power to the electric grid.

"The obstacles in the way are hundreds of years of utility policies," Powers said.

Henry Abarbanel, a Del Mar councilman and co-chairman of the San Diego Association of Governments' energy working group, said by telephone later that the report could play a key role in a planned five-year review of a regional energy strategy the association adopted in 2003. That strategy set a goal of securing 75 percent of the region's supply from sources within San Diego County by 2020, yet 67 percent of its power comes from outside the region today.

"It is an absolutely critical piece of information," Abarbanel said. "Everybody's overall goal is to have access to renewable energy, particularly solar. The question is, what's the most reliable way to do that?"

The energy working group has yet to take a position on the power line.

San Diego Councilwoman Donna Frye, who opposes Sunrise Powerlink, said at the news conference that she intends to ask a San Diego City Council resources committee to endorse the report.

Contact staff writer Dave Downey at (760) 745-6611, Ext. 2623, or ddowney@nctimes.com.

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Gee. wrote on Oct 19, 2007 4:50 AM:There is an idea for ya. Someone should get a bonus for that one. It is so uncommon in government to see independent thinker's ideas in public.

Richard wrote on Oct 19, 2007 5:15 AM:The solution would be to implement both plans to reduce foreign and petroleum dependency and, but that would be too rational.

Howiek wrote on Oct 19, 2007 6:23 AM:Let’s see here, this story has appeared in two different papers (here and the San Diego UT) and an online news source, voiceofsandiego.org. For some reason all the stories a bit different—suggest all three articles be read before coming to any conclusions. They are helpful suggestions but anyone who has priced out solar energy knows something smells in this report. I’m certainly not against solar but I can’t afford it, and if Powers thinks it could qualify for state funding that simply means we all pay for through our state taxes. Last time I checked the state is now running if deficit mode! Where is the funding going to come from?

Too easy wrote on Oct 19, 2007 6:47 AM:If solar were affordable, with the help of rebates from SDG & E, it truly would be a win-win situation in many ways. First, no fossel fuel would be burned, the energy from the sun would be utilized, and the burden on the grid would be lessened. As it stands today, solar is NOT affordable and we have a neverending natural resource that we are wasting - solar energy. Just help people and businesses afford to install solar photo-voltaic systems, and the burdens on the system will lessen.

Better than Powerlink wrote on Oct 19, 2007 6:52 AM:Sempra could allow incentives, just as it does for retro-fitting more energy-efficient equipment. The other item is that the solar installations should be overseen by someone like Sempra, because today, if anyone attempts to go solar, the solar "contractors" are worse than used-car salesman. Instead of all of us paying for Sunrise Powerlink, which many are against, we could tap the energy of the sun ! Why bring huge power lines hundreds of miles to transport energy when each home could suply some of their own power.

Reduce fossel fuels,incentives pay wrote on Oct 19, 2007 6:58 AM:Wouldn't we all pay for the Sunrise Powerlink ? The answer is yes, we would. Much of the money for the solar conversions would come from the same sources, us eventually, one way or the other. With solar, at least people would have a reduced power bill. Now that is sure a no-brainer. So many people would add solar systems if they were remotely affordable. Today, they are not. What a boost this would be to reduction of our use of fossel fuels - we would each capture the energy from the sun that shines on our homes each and every day.

Incentives reduce cost wrote on Oct 19, 2007 7:05 AM:How many of us have wanted solar, only to find out that it was very expensive. The incentives would reduce that cost and make solar affordable. Just as we buy new, more energy-efficient appliances or retrofit lighting etc, we would be doing the same thing, but in a different fashion, by going solar. I cannot imagine anyone against this. It should take the form of an initiative or something, after all of he details are spelled out. Most large energy users would sign up today ! The energy of the sun is there and solar would not deplete anything.

Nope wrote on Oct 19, 2007 7:11 AM:Ha! The power companies will never let it happen. If they do, they wouldn't be able to gouge us. This is nothing but a dream.

Carter: wrote on Oct 19, 2007 7:25 AM: Now, solar power is a banner idea. However, I have always viewed a solar power device on my roof as one more item requiring maintenance. Of course that cost would be on the owner not the power company. Except for the ugliness of the solar device and that it must be cleaned often, there isn't to much more that can go wrong. If I were to install one it would be most effective if placed on the front of my roof. The additional weight up there would cause a more rapid deterioration of my roof or a costly increase in the weight bearing ability of my roof. Believe me, everything electrical and mechanical are subject to failure at all time - and the owner has to pay for the repairs - to both the device and the roof. Oh yes, don't forget taxes - you do not think the county would not call the installation of a solar device an increase in property values do you? In addition, I wonder if the state and federal government would consider the value received income? No doubt. Ah, put the sunrise line in! ! ?

Neighbor wrote on Oct 19, 2007 7:33 AM:How on earth did this solar alternative study get completed for only $30,000? If these people were hired to do all future studies needed by local agencies, the money saved could be used to buy thousands of kilowatts of solar panels.

Yes to Solar wrote on Oct 19, 2007 7:34 AM:We should have had solar incentives for years. Another beautiful day with sunshine and we aren't using the solar capabilities because the power companies can't figure out how to reap profits from it. Let's all go solar now.

burt wrote on Oct 19, 2007 7:43 AM:Every time I read about the powerlink, I thought this same thought: use that money to put solar panels on all the exposed roofs in san diego and you'd have an enormous source of clean renewable power using infrastructure that's already in place, ah, that's just too much common sense for anybody to really consider. This is great news. I have twelve panels taking up a small portion of my roof that provides all the electricity I need for a comfortable life style; I use CF lights yes, but I still use an electric coffee maker, toaster, vita-mix blender, computers, LCD movie projector, air compressor, etc. Solar water heating panels take up another roof portion and I get hot water enough for several 10 minute showers, the dish washer and the washing machine by just staging the usage thru the day. The power companies can still make money with this by developing a consulting, installation and maintenance group for solar panels. If there are two things we have in abundance in SoCal, it's sun, and rooftops. How can we possibly think its a bad idea to use them?

No Single answer wrote on Oct 19, 2007 7:47 AM:1: Solar generation can be done more efficiently in the DESERT, so Sunrise is needed for practical solar. 2: Insolation variation and other factors, like the fact that most people won't be bothered or spend the $ to put the panels on their roofs, or maintain them, or that the grid isn't set up (or the billing systems) for so much co-generation mean that the estimates of the power contribution of rooftop solar are wildly optimistic. It's still a good idea, but not a complete solution. 3: Solar alone isn't a reliable enough co-gen system. We need wind as well. Unless you can get HOAs to allow both solar panels and wind generators (like the ones used on sailboats for long-distance cruising) on rooftops, then we will have brown-outs during our tropical rainy days in August. We need lots of real solutions, not this religious pissing match.

Hopeful wrote on Oct 19, 2007 7:55 AM:Now there is a Idea that could use more exploring. What is wrong with harnessing and using energy that is all around us every day? 150 miles of new wires just doesn't sound appealing.

GFN wrote on Oct 19, 2007 8:12 AM:All you need to do is to read the article about the Stone Brewing Co. in the Business section of today's NCTimes. They are installing a $3.2 million photovoltaic system which will provide over half of its power needs and will pay for itself in just ten years. The company is installing this system to demonstrate its commitment to the environment and to become more energy independent. It's a great idea whose time has come.

Great idea wrote on Oct 19, 2007 8:22 AM:I have room to put solar at my house, reduced rates & rebates. If some wild fire burns down the existing power connection, Ill have solar. And i have a generator as peak power demands don't always happen when the sun is out. The sunrise connection will supply for the PEAK demand.

Eliminate risks wrote on Oct 19, 2007 8:41 AM:The solar incentives that have been offered in the past have only been a small percentage of the tremendous cost of the solar panels and their installation by the "solar contractors" that seem to be nothing more than high-power used-car salesmen. When solar becomes less unaffordable,with increased incentives, when SEMPRA hires and pays the contractors for those systems, it will be better far less risky. Obviously, the utility company will provide the systems for those who use lots of power, just as they do for retrofitting lighting systems. As far as HOA's are concerned, I believe that they cannot refuse solar systems. Taxation is another matter. I do not know, but doubt that the County would reassess because of it ? Tax on the incentives is another matter entirely, I thought I heard that you received additional tax incentives for going solar

"Experts ???" wrote on Oct 19, 2007 8:49 AM:Politicians and Environmentalists are now "Experts" on what we need for energy. Let's see, aren't they one of the reasons we are in a water crisis? What makes us and them think they can deal with this any better. Get the line built now, short term, then develop Solar going forward. We need power now! If solar really worked well we would have it now.

nothin' but sunshine wrote on Oct 19, 2007 8:55 AM:The problem for the energy companies is once a system is installed they lose revenue from that customer for at least 20 years and perhaps forever. It is bad for the energy companies. Solar systems are also being installed for almost no up front cost and then the energy supplied by the system is sold to the 'lessee' for rates competitive to, or better than current electric rates.

Concerned-1 wrote on Oct 19, 2007 9:43 AM:Wow, this story really had me going right up to paragraph that begins "Global warming is the issue of our time..." Acck! Seriously, I would embrace solar with open arms if it were economically feasible. And, I do not like those huge power lines for many reasons. All that said I would support this report, if it weren't for my gut telling me that it was produced by enviro-kooks.

Idea was proposed already wrote on Oct 19, 2007 9:46 AM:I did the simple math months ago and posted that suggestion here. Nothing genius about it. Problem is Sempra will make more money with a powerline, solar is a threat to their very existence. Big corrupt goverment will protect the corporation over the pubic interest. The answer is for individuals to bite the bullet and BUY SOLAR. Instead of a wasteful ridiculous kitchen remodel put in solar and free yourself form SDGE. Your goverment will not do it for you.

To Carter wrote on Oct 19, 2007 9:49 AM:They need to be hosed off every two months when there is no rain. They actually increase the life of your roof by protecting it from the sun (they do not weigh much). The County is prohibited from raising your taxes for a solar installation. Parts are warrantied for 25 years. Go ahead, keep making excuses to avoid doing the responsible thing

What is an envirokook? wrote on Oct 19, 2007 10:24 AM:It is anyone whe does not agree with Concerned-1. Go ahead and ignore the threat of global warming. Takethe risk of being on the wrong side of the fence. It is better to reduce consumption than to risk finishing of the destruction of our earth.

It's ILLEGAL wrote on Oct 19, 2007 10:32 AM:What group do we continue to hear the comment "what don't you get about the word illegal?" But to the "right", it's only illegal if they want it to be. If it fits what they want, then they say stop making a big deal. I call the way they think pathetic.

jerbo wrote on Oct 19, 2007 11:05 AM:SDG&E needs to look to the future as did Kodak. Kodak saw that the new wave was digital and changed its business line from film based to digital based and are now doing very well. SDG&E needs to do the same such as leasing and installing solar systems with the idea that any extra energy generated beyond the need of the home or business would belong to SDG&E.

Why doesn't SDGE just wrote on Oct 19, 2007 11:50 AM:come out and install Solar Panels on Businesses? Use the money intended for the Power Lines. Making Businesses and Individuals put this money up front is wrong. We have some Solar Power at our house, but it was very expensive to start up. I doubt the equipment will last long enough to Recoup the expenses.

Have a Spare $3 Million Bucks?!!! wrote on Oct 19, 2007 12:07 PM:How many Businesses have this kind of Surplus Capital to wait 10 years before a Return on their Investment?! http://www.northcountytimes.com/articles/2007/10/19/business/news/20_50_1310_18_07.txt

A thought wrote on Oct 19, 2007 1:02 PM:Papering California with all those black solar panels will add to global warming. Black absorbs heat, it doesn't reflect it. You see it is a lose-lose situation.

to Concerned-1 wrote on Oct 19, 2007 1:29 PM:Wake up and smell the melting ice caps. The vast majority of scientists agree that global warming is real, it?s already happening and that it is the result of our activities and not a natural occurrence. The evidence is overwhelming and undeniable. It is difficult to get a man to understand something...

inform yourself wrote on Oct 19, 2007 1:39 PM:We went to Greece and Santorinie everybody had Solar on there Roofs.

to HAve a Spare 3 million wrote on Oct 19, 2007 2:13 PM:Stone ...They dont wait 10 year for "a Return on Their Investment", correctly stated, their investment is returned 100% after 10 years. It is free power for another 20-30 years after that. Not a bad investment, you try to get a 10% a year payback with dividends for 30-40 years.

to: A thought wrote on Oct 19, 2007 2:16 PM:Global warming is caused by the atmosphere trapping heat in. The miniscule effect of the panels is not measurable. The effect is zero when the panels are placed over a dark roof.

Concerned-1 wrote on Oct 19, 2007 2:27 PM:Yes, global warming is a fact of life just as is global cooling. What is a envirokook? Al Gore is an envirokook who is using global warming lemmings to further is career. I am a skeptic, nothing more, whenever I hear this kind of hyperbole. Y2K!!! Go ahead and believe what you want, but you are not going to get my vote nor support for idiotic solutions such as carbon credits, etc.

Demand metering wrote on Oct 19, 2007 2:44 PM:My guess is that Stone Brewing has been given a Demand Meter and has to pay for the "availabiity" of power 24/7 - that payment based on demand (the maximum power used in ANY 15 minute increment within the 30 day billing cycle, will be charged as ""Coincident demand" and "Non-Coincident Demand" charges for that entire month. Those demand meters are coming for all of us as another way for SEMPRA to rake in unfair charges. Solar is the way to go, and it is almost manditory if anyone has had their meter changed (without their permission) Bills can go up five-fold to six-fold, and all for nothing !

The time is now ! wrote on Oct 19, 2007 2:49 PM:The sooner we convert to solar power, wind power, steam, and water-driven power, the better for the planet. We need those incentives and classes given at every high school and college on solar power and every other method of conversion of existing natural resources into electricity.

Where's My $30K! wrote on Oct 19, 2007 3:37 PM:Look it up. $20K (after Fed Rebate) for a 4kW home system. Crunch some numbers. $700M..$20K per home, 35,0000 homes, equals 170MW of electricity. Someone paid $30K for a study that involved three simple calculations. I've gotta get into that business!!!

niels wrote on Oct 19, 2007 3:47 PM:1. Solar electric systems require very little maintenance. There are no moving parts. In parts of the country where it rains - no washing is needed. 2. System weight about 2 lbs per square foot... easy for a roof to support. 3. In many states the value of the solar system can not be included in the assessed value of the property (for tax purposes). In CA similar homes with solar go for about $20,000 more - great resale. 4. Solar power costs are dropping, CEOs of both sunpower and suntechpower have promised that panels will cost half as much by 2012. And that will continue for the next few decades. Declining prices will only happen if the market contintues to boom. Like computers or cell phones, solar electric costs will only drop with sales. So incentives help to get us to the future where solar is cost effective without incentives sooner.

Everyone. wrote on Oct 19, 2007 3:53 PM:Is wasteing their breath on this issue. The most vocal people in this area are so myopic that it will have to bite them in the butt. It will have to be a fait accompli and forced on them. Let's hope ignorance can be overcome and it is soon.

Thank you for a. wrote on Oct 19, 2007 4:15 PM:Scientific explanation of global warming. Please come back as a voice of reason from time to time.

Alf wrote on Oct 19, 2007 4:33 PM:Remember, "Everyone.", that our illustrious "Airport Authority" drew millions of dollars over well over a dozen years for the obstinant position of insisting that Miramar MUST be the next San Diego Airport site, knowing full well that "it was not even an option" at all, ever. Like I have said - Common sense gets tossed out the window, or brain, over 95 percent of the time when someone enters public office/service. Regards, Alf.

to: niels wrote on Oct 19, 2007 4:58 PM:You are generally correct except sales of PV panels have been booming worldwide (Germany especially) yet the cost of a solar PV panel has increased. Until the production of PV grade silicon increases there will be no relief in sight.

Floyd wrote on Oct 19, 2007 5:37 PM:You can't buy solar panels with a rebate. You have to use your own money. The rebate doesn't occur until after you've paid for the whole thing.

SEMPRA buying power wrote on Oct 19, 2007 5:48 PM:I can't help but remember "It is better to lkight one candle than to forever curse the darkness". Whether solar by and of itself is the solution to all of our problems in the energy arena is doubtful. If each homeowner that suffered with tier two and tier three electric rates and above were to add solar panels to lower their overall electric consumption down out of the danger zone (to our wallets, that is), those are the customers that are using the most power and will get the most benefit from solar. And we also have businesses that have had their electric meters changed to Demand Meters - those people really pay for something they never get ! They pay for the joy of having the energy available, whuich of course is a lie, considering we have brown-outs. SEMPRA needs to offer rebates and hire reputable contractors to provide the solar PV systems. With their buying power, the costs will plummet and the utility will not have to rely on Sunrise Powerlink that they keep trying to tell us is the inevitable answer to the energy problems.

No tier 3-4, no demand charges wrote on Oct 19, 2007 6:03 PM:What people are missing is that the power is available for use and each solar sysstem is hooked up into the power grid via the same lines that bring power to them. The power is created during the day (sunlight hours) and turns the meter backwards (sort-of) and at night the meter reverses and the power is provided back to the consumer. It really does work, but the 2 drawbacks are #1 the horrible expense and #2 finding a reputable company. Let's get going and put some power onto the grid and reduce those high rates that customers are paying when they consume lots of power. I don't think the object is to eliminate the utility company (SEMPRA wouldn't be too happy with that notion), but to reduce those excessive bills and get out ahead of SEMPRA with their plan to install demand meters on homes ! Multiply yur utility bill 6 - 7 times and that is what you COULD be paying if you have large surges of power required (even one time during a 30-day period).

To: Floyd wrote on Oct 20, 2007 1:24 PM:What particular rebates aqre you talking about ? Most solar contracting companies, as well as electrical distribution houses, allow you to sign over your rebate from the State to them. You pay the difference.

black? wrote on Oct 21, 2007 5:36 PM:interesting comment on roofs and solar panels. Fly over LA or SD most industrial roofs are silver not black (to reflect heat). Maybe this is a lose-lose situation.

To: Black ? wrote on Oct 22, 2007 6:58 AM:Regarding roofs and solar panels, now you have me wondering. I think that the black, if it were the rooftop color itself, would absorb heat, whereas the solar panels are actually a very deep blue, I think, and those are designed to absorb the suns rays, they are placed on top of the roof, and have metal backs, maybe aluminum. You made me think about the concept. The basic idea is to ADD solar to the available power, just as the Powerlink project does, but by adding solar, a person lowers the cost they pay SDG &E for electricity - the more you use, the more you pay per KWH above each tier. Lower the usage and get out of the high dollar KWH brackets. The most efficient solar panels facing in the best direction get the quickest payback. If your roof doesn't face properly, use a tracking system, which adds 30 % to 40 % power. Every rooftop that is converted means that much less we have to rely on fossil fuels - imported oil !

Jay D. wrote on Dec 16, 2007 3:58 PM:Selling Renewable Energy (Solar Etc.) Without Incentives In short, we need to market solar as an investment that will save money while you own it and return most or all of your investment when you sell the building it's sitting on. Chances are, as natural gas and oil prices go up, there will be a corresponding jump in your monthly electricity bill. So, instead of promoting a solar power system based on today's savings in electricity, we need to have easily understandable projections on what the savings will be over the life of a system. These numbers need to reflect what's really happening to the cost of energy! Here are some ideas I'd like to share. First, we need to find a way to make renewable energy economically competitive without the tax incentives. We do this by answering the question: "What is the opportunity cost of not using solar to decrease your energy bill?" There's something interesting I've found. There's a direct correlation among electrical rates, the cost of air conditioning a building, the heat index and the amount of sunshine on any given day. In other words, on the hottest, sunniest days, we use more electricity that costs more per kilowatt. So, why do we continue to promote average hours of solar production, when in fact (at least down here in California), we produce far more solar power per day during the heat of the summer when energy costs are highest, than we do in our temperate winter months when energy costs are lowest. A sound marketing approach would be to evaluate solar energy in "dollars" of production per year instead of in kilowatts. I'm sure there are some smart people out there who can match kilowatts of solar production on any given day of the year to what the rates will be (based on the projected costs of electricity). Secondly, we should stop trying to sell a solar package as a "cost." In real estate, there is a principle that says anything affixed to real estate becomes an integral part of the real estate. Once a solar package is installed, it immediately increases the value of a property. So how can you predict how much more a building will be worth in 5-10 years with a package as opposed to without one? In the real estate appraisal business, there are three approaches to appraising a property. The market approach (what are comparable properties selling for), the reproduction cost (the cost of creating an identical building at current construction and material prices) and the actual original cost adjusted for inflation. In all three methods, there's a strong case that a system installed today will make the building worth more today and in future years. We need some realistic numbers to predict how much more a property will be worth in the years following installation. I believe that if you sell a building 5-10 years after installing solar, you should recoup all of your investment in the system plus an added bonus. If the rumors are true, a residential system (using the market approach) adds $20 of value to a home for every $1 it saves on the electric bill. For commercial appraisals, you would divide the income (savings) by a cap rate (which was about 9% at last report). A system that saves $2000 a year then would be worth $40,000 on a home or $25,000 on a business. But if the cost of electricity goes up (if that is remotely possible), then wouldn't the value of the solar power system increase as well? In reality, we are not selling something that costs � we are actually offering a financial investment that grows comparably with other forms of energy. In short, we need to market solar as an investment that will save money while you own it and return most or all of your investment when you sell the building it's sitting on. In commercial real estate, they use a "Cash Flow Analysis" form as the tool to evaluate a building's value using the income approach. We need a similar tool for putting a value on solar. If solar makes sense with this approach, then just think of how much better the systems look when you add the tax advantages! This approach also applies to the cost of Energy efficiency implementation. Reducing operational costs increases the value of the business and or property. Compiled by Jay D., Energy analyst 12/1/2007

nick wrote on Nov 10, 2008 9:17 AM:ok, seriously. why do posts turn pink when you mouse over them? learn to code.

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