DJH Construction Inc

If you have been looking into going solar but think it is too expensive, you may be able to go green sooner than you think.

Anyone who has looked into going solar or wants to go solar can now benefit from the decrease in solar panel prices and the increase in federal and state incentives that subsidize solar. According to investment bank analysts at Piper Jaffray, the price of panels have dropped nearly 40 percent compared to last year. What is driving the cost down? Simple supply and demand as well as the decreasing cost of raw materials.

Although solar demand has increased in the United States due to federal and state incentives, overall worldwide demand has decreased. The decrease in demand is in large effect from the decreasing solar subsidies in European countries, making the installation of solar more cost-prohibitive with a longer payback period. According to Emerging Energy Research, a consulting firm, solar photovoltaic installations in Europe are forecasted to fall by nearly 26 percent compared to last year.

The decreasing cost and availability of polysilicon (the key component to most types of manufactured solar) has also contributed to the decrease in solar panel costs. More overseas companies, especially in China have become involved in the direct manufacturing of polysilicon which has decreased the overall cost of manufacturing the panel. Consumers can also benefit from the technological advances in the solar industry that have lead to increased efficiency in the solar modules manufactured today. This means fewer panels with greater energy output.

In addition to the decreasing cost of panels, consumers can also take advantage of available federal and state solar rebates, credits, and grants to further decrease the net cost of their solar system. To better understand what solar incentives are available in your state, visit the Database of State Incentives for Renewables and Efficiency at: www.dsireusa.org.

Habitat for Humanity solar project makes the front page of the September 1, 2009 issue of the Mojave Valley Daily News. The project was made possible by the efforts of DJH Construction, Inc., Arizona Electric Power Cooperative, and Mojave Electric Cooperative.

A financing option known as a Power Purchase Agreement (PPA) is available to business and home owners who are looking to go solar but for a fraction of the cost. A Power Purchase Agreement (PPA) is a legal contract between an electricity generator (PPA Provider) and a host site owner/lessor (business/home owner). The business/home owner purchases energy from the PPA Provider at a contractual price (typically at current or discounted utility rates) for a negotiated number of years. This allows business/home owners to lock in current energy costs all the while going green. The biggest advantage to the business/home owner is a predictable monthly electricity payment not subject to utility price volatility. Although most PPA contracts will have an inflation escalator year to year (typically 3-5%), it is still below the historical utility increase of 7+% each year.

In addition to energy cost containment, under the terms of a PPA, the PPA provider assumes the risks and responsibilities of ownership such as the purchase, operation, and maintenance of the solar facility. However, because the PPA Provider is the owner of the solar system, all tax credits, grants, and utility rebates belong to the PPA Provider. If you are looking into a PPA you should weigh the advantages and disadvantages summarized below:

Advantages

• Current/discounted utility costs
• Hedge against energy costs
• Long-term predictable energy costs
• Use of Solar Energy For A Fraction of the solar system market value
• Customer only pays for energy produced
• Customer can advertise it’s use of “clean energy”

Disadvantages

• Client not eligible for tax incentives, grants, and utility rebates
• Client does not own system
• Client pays for energy produced regardless of actual usage
• 15 to 25 Years of PPA payments depending on contract terms

For more information on whether or not a PPA is appropriate for you, contact us at:
info@djhconstruction.com or (949)233-1618.