At first blush, the primary reason you may be considering solar power is to add value to your home, reduce your utility bills, or minimize your carbon footprint. Of course, these are noble goals, and solar power is a simple way to achieve them, but why stop there?
Can solar power be profitable? Solar Mosaic, a solar installation company, thinks that and investment in solar power installations will be popular and is expecting good returns for its investors.
One thing that may set some home- and business-owners off about solar power installation is cost, because solar panels and their control systems are not cheap by any stretch of the imagination.
The federal and some state governments offer incentives to add solar power to your home or business, but the price can still be daunting. Solar Mosaic’s business-plan aims to take care of the capital problem, making solar power more accessible, while at the same time paying dividends to the investors.
Solar Mosaic opened its internet doors to investors in California and New York this morning. The crowdfunding approach, allowing investors to put in money toward solar installations, has been popular in the last year or so, enabling Solar Mosaic to finally achieve public trading.
Now, with investment in the company, Solar Mosaic is promising a 4.5% annual return. The panels themselves are leased by building owners, who pay for the electricity just as they paid the utility company.
Solar power investment sounds like a bright idea!
Solar power can be profitable. but only on a large scale and only in certain areas of the country. The solar market is pretty well controlled from my observation. Lets compare apples to apples and look at a 50kw array and it’s cost and it’s return on investment. This will be a simple example. With a little research on the net you can find systems of this size for sale with installation costs. Typical cost will be about $84000 for the equipment and installers like to keep installation cost right around a dollar a watt. So to put the system in operation would be about $134000 useing simple figures. Now the system at peak output will produce 50kw that equates to 50kw in any one hour. Now the system will rarely operate at peak power but there will be days that it does. The best estimate seen is a production of around 48000 kwh per year. Now if you were to sell this generated power back to the grid at the same price your paying….. let’s take the figure or 22 cents per killowatt hour (this is very high for most of the country) and use it in our example. So 22cents times 48000 equals 10,560.00 dollars per year. Now if you got 134000 dollars laying around the return on investment would be a little less than 10%. Now granted that on the surface looks better than most investments at this time. However the system would not pay for it’s self for twelve years and after that point generate a profit. Most contracts with power companies that will buy your generated power will give you a contract for ten years. Such as TVA. So I understand the math some what and I can see paying investors a 4.5% return. I’ve crunched these numbers over and over. The only real way to make money in this type of application is to combine solar with another generating fuel stock to reduce the primary costs. As a stand alone it looks like a whole lot for very little return. All factors are subject to change. The bubble generated by our government has popped as far as solar goes stocks are in the trash pile and companies are failing or about to fail. Thanks Mr. President.