Saturday, August 25, 2012

Investor paradise, Only if you know what to look for

Why investor paradise, you ask?  Because in days of low interest and high risk of the stock market. Even in these days of uncertainty and an economy that can dive into recession any day, what can you do to grow your money at better than 6% in something safe that can be dependant on for long term income. That would be solar, but only in the right ways, by investing in quality solar panels and other equipment not junk. By using a good developer that uses quality installation companies. Making sure you have a warranty that backs the product and is backed by a re-insurance policy that covers the warranty if the panel company goes out of business and you still have warranty but no one to back it.
Next is very important in who is going to buy the electricity from your investment, how credit worthy are they, will they still be around for the end of the agreement period.
Now I will tell you a couple of ways to invest in solar. First, solar for your own use at your home or business. This investment lets you take a bill that you are already committed to pay for the next 20 or 30 years, unless you are planning to live in the dark. So, lets look at this closer. You use 2000 kilowatt hours per month, lets say.  2000 kwhr times 360 months (30 years) 720,000 kilowatts, that is how many kilowatt hours you will use in 30 years. Now you times (multiple) 720,000 by what you currently pay per kilowatt hour average in Texas is 9.7 cents = $69,840. So without any increases, you know that's not happening, you are already going to pay $69,840 for electricity in the next 30 years. You will need about a 16 kw solar system to meet your electric need each year. Solar is sold by the watt, so 16,000 watts =16 kw   16,000x$3.50 per watt=$56,000 The federal tax credit is 30% so minus $16,800= $39,200  I am not going to figure depreciation as that is different for everyone and I am not a CPA.  So $39,200 divided by 720,000 is a  lowered cost per kilowatt hour to 5.44 cents per kilowatt hour. A savings of 4.26 cents per kilowatt hour= a savings of $30,672 over that 30 years that is over $1000 per year savings on something you are already going to be paying for. So you see you are saving money by paying upfront for your electricity.  Same as if you pay your mortgage off early.
The added benefits of moving to solar is the environmental issues, you will save the air and water, and non renewable resources. You will save trees, coal, natural gas, and nuclear will not be needed.
It is safer, less maintenance, does not pollute, and everyone that goes solar lowers the demand on the grid which helps everyone.' Next post will talk about investing in Solar Farms and the next after that will talk about investing in a Power Purchase Agreement for an Off Taker, I will explain more about this later.

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