What's the Payback - personal payback

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What's the Payback?
The question everyone asks about solar electricity
Introduction
How does “payback” work?
How do I get the best payback on efficiency?
How much investment in energy efficiency is necessary to substantially reduce the size of a PV system?
What else is part of my personal payback?
Smart shopping to cut initial costs
A brief word on energy efficiency opportunities
Resources

What else is part of my personal payback?

There are many non-economic reasons for making the installation of a renewable energy system a personal priority, and even now it is possible for many people to afford it as a personal choice. The environmental benefits of renewable energy may presently be incalculable, but they are immediate. Right away, we start contributing to cleaner water and fresher air, and to sustainable use of our natural resources, all for the benefit of our own and everybody else's grandchildren.

• Are you concerned about the effects of fossil-fueled electrical generation on the environment?

The environmental impacts generally associated with fossil and nuclear power include acid rain, smog, mercury in fish, increasing CO2 and methane levels (thought to cause global warming), aesthetic impacts, and soot and particulates (thought to cause asthma and other respiratory complications), and radioactive waste.

According to the EPA, every kilowatt-hour of electricity produced by solar power keeps approximately 2 pounds of carbon dioxide out of the atmosphere

• Do you want to increase your energy security and self-reliance?

Because of the rapid increase in computers and other sensitive electronic equipment, more and more homes and small businesses now require highly reliable, quality power. If energy security and reliability is important to you, then a renewable energy system with battery storage can provide the uninterrupted power supply this kind of equipment demands.

• Do you believe it is the right thing to do for the future of the economy, and want to show your commitment to clean energy?

All of our coal, natural gas and nuclear fuels are imported into Wisconsin. Those energy dollars are exported out of Wisconsin and the vast majority of the jobs are created elsewhere. However with solar and other renewable technologies, jobs are created in Wisconsin. The Wisconsin Division of Energy found that the use of renewable energy generates about three times more jobs, earnings and sales than the same level of imported fossil fuel use and investment.

• Do you regard the inflation-resistant nature of renewable power to be a wise retirement investment?

The price of solar electricity is declining faster than inflation, and utility electricity prices are increasing faster than inflation. Wind power is getting even closer to being competitive. Also, the value of a renewable energy system will tend to increase through time, rather than remaining stable as had been assumed.

The Best Things in Life are “Externalities”

When first asked to quantify environmental damage from pollution, economists were leery of putting a price tag on the cleanliness of the air, the purity of the water, or the health of wildlife and plants. Because these things are not bought and sold in the marketplace, economists considered them to be outside the realm of commerce and therefore labeled them “externalities.”

Since the advent of the Clean Air Act and requirements for cleaning up fossil fuel emissions, utilities can now quantify the costs for complying with the regulations. These costs are considered to be the only quantifiable “environmental costs,” and utilities include them in their customer rates.

The regulatory path toward pollution control has made substantial progress since efforts began in the 70's. Unfortunately, this approach regulates only at the production level. If we were taxed individually for the energy resources we use (as some clean energy advocates have suggested), we would pay less in taxes by using less energy or by relying on cleaner sources, and the “value” of solar energy would go up.

Furthermore, when actual environmental costs are undefined, they default to our society as a whole, and not to individual energy consumers. We've chosen to pay instead through higher health costs and public funding of mitigation and regulation. Until national energy priorities change, supporting clean energy will be a matter of personal commitment, and buying a system will be a personal choice. With almost no quantifiable economic incentives, the renewable energy market is currently driven by non-economic reasons, a number of which have established credibility with a growing segment of the population.

Cutting future monthly expenditures is as sound a retirement strategy as expanding your portfolio. The price of electrical energy will only rise in the future, and the rate of that rise will be unpredictable. Investing in your own electrical generation system before you retire is a hedge against that uncertainty. Most of the cost of a renewable energy system is its first cost, particularly a grid-connected system. Once the equipment is paid for it will operate with minimal additional cost for up to 40 years.

• Do you find renewable energy equipment interesting and feel it would be fun to own?

Installing your own renewable energy system is a way to participate first hand in the development of a clean energy future. It's also a way to provide your children to greater awareness of our energy resources by planning, installing, and tracking the electricity produced by your own renewable energy system.

Smart shopping to cut initial costs

While prices for solar electric panels, wind turbines, and other renewable energy technologies continue to fall, installing a system is still a substantial investment. Are there ways to make this good idea more affordable right now?

• When renewable energy can save money

If you are planning a home that is located some distance from the electric distribution grid, a PV or wind system can cost less than a utility line extension. Line extension costs are typically $10,000 to $20,000 per mile. In this case, a renewable energy system saves you money immediately. The same can be said for installing solar-powered lighting, pumping, ventilation or other electrical equipment where accessing utility power is not practical.

• Cash Incentives Available

Incentives are available for solar electric systems. In Wisconsin, this currently includes the Focus on Energy Cash Back Reward for home systems, and for commercial businesses, various tax benefits (tax credit and accelerated depreciation) apply. Using the Federal and Focus on Energy incentives a commercial system's cost can be cut in half.

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