A Financially Sound Investment
It has never been a better time to go solar in California. There are many financial incentives and financing programs to assist you in your purchase. The typical Return On Investment (ROI) with many commercial solar power systems are approximately 5-7 years, after which your system produces free electricity for 40+ years.
The current cost of installing a solar power system has dropped to an all time low and there are still some rebates and tax incentives that can reduce the costs even more (depending on factors such as where you live and your tax status). The current incentives available are:
- 10-15% (approx) rebate from the Ca Solar Initiative (depending on your location
- 30% Federal Investment Tax Credit (ITC)
- 30% (approx) tax depreciation savings for taxable entities
Should You Wait Until It Gets Cheaper… You Ask?
The simple answer is no. The incentives available today will not last forever. The CSI rebate is on a scheduled reduction based upon the number of projects that get installed. A few years ago it was about $4.50 per watt installed. Now it is less than $1 per watt. It will take a great act of government legislation to change or improve the rebate program similar to the original SB1 bill that created the rebate in the first place. Don’t take the current program for granted because it will not be around much longer.
The federal ITC only lasts until the end of 2016. Your project must be completed and operating before the deadline.
The bottom line is that incentives are here to make the cost of going solar close to grid parity which is already very close today with incentives. The decline in incentive levels were originally designed to follow the decline in equipment and system costs. Generally over the last 8 years incentives have declined faster than installed costs… so no, solar is not getting any cheaper.
If you decide to wait for 5 years to install solar you will have paid your ever increasing utility bill and lost out on government incentives. The cost of materials is not declining as fast as you may think. Solar panels are still limited by raw materials and manufacturer production capabilities, and other countries use about 95% of the worlds production. This makes solar panels a commodity and that means prices fluctuate with demand. Do not make the mistake of comparing solar panel supply and demand to plasma televisions or IPODS. Consumer electronics production typically outpaces the demand which drops the price over time. Solar panels should be compared to other commodities that have limited productions like oil and gas. Prices rise with increased demand.
Simply put, you can not be sure that the incentive will be around unless you sign up today and install your system. Once approved, you are guaranteed to receive your incentives if you meet the installation deadline.