Posted by James Bartley on Jul 23, 2019 4:15:29 PM
Scott: Bananas, solar, to help explain how in the world these two go together, I've brought in James the owner of Skywire Solar.
James: Thanks Scott. Please don't eat all of the bananas, we need 30, so make sure there's still 30. You want to count while I'm explaining this? So hey, there's a lot that goes into the pricing of a system, and how it all kind of comes together and make sense for you. The big thing I want to go over is just a scenario, an example. You need to slow down a little bit, just don't need as much, all right. Slow it down. All right. Here's an example. We've got a system size of 10.2 kW, that's 10,200 watts. We have currently a Liberty rebate, that's Liberty Utilities, the rebate that's going on right now for 25 cents per watt. We also are implying that the 30% federal tax incentive is usable, tax credit, sorry, and the 4% average inflation rate, utility costs only go up, that's just the nature of the beast. We're taking a little bit conservative route and just saying 4%.
James: We've got a system cost of 30,600 as our example in this scenario.
Scott: I get it, 30 bananas.
James: Yeah buddy.
Scott: Yeah, I'm getting there.
James: That's it. That's it. All right, so let's take that Liberty rebate into account. Liberty rebate 25 cents per watt, this is a 10.2 kW system, so that's going to be equivalent to 2550, $2550, let's go ahead and just take off two bananas there.
James: Bam! You got this. All right. That leaves us at about 28 Bananas, $28,000 right, for the system cost. Now we've got to take into account our tax credit, 30% federal tax credit. That's about eight bananas, go ahead and take off eight.
Scott: There you go.
James: Just throw it down [crosstalk 00:01:57]. Yeah, take seven. Yeah, you got this. Yeah. Hey. All right, so we're left with roughly 19,635 bananas. Let's play out what it looks like every year for these savings in your utility bill, essentially. The first year you're really going to save roughly, on a Liberty Utilities system, about $1,600 in utilities, you're going to save that, right? Let's just call it one banana. Let's round down because we're going to be rounding up. That's year one savings.
James: Year two, 1740, $1740, go ahead and call one banana. Year two, we're going to round down a little bit, a little more, round up a little bit. Year three, sorry, $1,804 in savings. Nice. Yeah. Okay. $1,938 in savings year four. So let's just go through this a little bit quicker. Call year five two bananas. Year six two bananas.
James: Still three bananas. Sorry, year seven three bananas. Year eight three bananas, and then year nine three bananas. So what now would you say?
Scott: I get it. I get it.
James: Yep. Okay. Now, the system has technically paid for itself, this is a non finance system, cash buy basically, but it's paid for itself in the first nine years. So, when we go to year 10, those savings are now just coming back to you. You are no longer spending money. I mean, it's just coming back to you, so after your return on investment in year nine, it's just pure money. It's kind of like a money tree. I mean, it just starts coming to you. Essentially, you're just not spending it, which means you're keeping it. That's beautiful. All right. I'm going to say that this was a win.
James: Where we're going with this is, this system doesn't just quit producing power the next day after it's paid itself off. We've got 25 year warranties. I mean, that's a warranty at 25 years, so it's not going to just quit at year 25 either. So all I'm seeing is more bananas than you put in.
Scott: I don't think we have enough bananas.
James: Yeah, there is definitely not enough bananas in this place. I'm just saying. So thank you for joining us on this episode of Solar Flare, and not the explosion kind.
Topics: Solar Flair