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Title: {Mine} Is solar power really economical?
Source: SoSo
URL Source: http://www.northfortynews.com/pvrea ... ommunity-solar-farm-goes-live/
Published: Jan 30, 2015
Author: North Forty News
Post Date: 2015-01-30 17:24:02 by SOSO
Keywords: None
Views: 18707
Comments: 59

Air National Guard couple set to deploy Larimer County’s Senior Tax Work-Off applications accepted starting Feb. 2 PVREA’s second community solar farm goes live By NFN On January 29, 2015 In Dispatches · Add Comment

Poudre Valley Rural Electric Association initiated into production on Jan. 29 the cooperative’s second community solar farm.

The 632 kW Community Solar Farm II, located north of Fort Collins, is generating power for members of PVREA who have purchased panels to offset their electric use. In a partnership with Clean Energy Collective, this project makes two community solar farms for PVREA.

“We recognized the demand for another renewable energy option from our membership, and the overwhelming success and 100 percent sellout of the first solar farm provided us the incentive to establish our second community solar farm,” PVREA CEO Jeff Wadsworth commented.

The cooperative’s first solar farm located at the co-op headquarters is 116 kW powered by 494 solar panels. The second solar farm is more than four times larger with more than 2,200 panels generating 632 kW. Members who are interested have the opportunity to purchase solar panels through Clean Energy Collective. The energy generated from their purchased panels is deducted from their monthly bill.

According to Clean Energy Collective, the average residential member is estimated to see a bill credit of $5 per month per panel and will receive their return of investment in a little over 13 years.

This solar farm adds to the cooperative’s growing renewable energy portfolio, which already includes the cooperative’s first solar farm project, over 160 net-metering applications, the Carter Lake Hydroelectric project and the Green Power Program.

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Begin Trace Mode for Comment # 9.

#1. To: Willie Green, All (#0)

According to Clean Energy Collective, the average residential member is estimated to see a bill credit of $5 per month per panel and will receive their return of investment in a little over 13 years.

Though the article says ROI of over 13 years it appears to be referring to the pay back period. If that is so, a 13 year payback period is not a good (i.e. - competitive) investment at all.

SOSO  posted on  2015-01-30   17:26:21 ET  Reply   Untrace   Trace   Private Reply  


#3. To: SOSO (#1)

If that is so, a 13 year payback period is not a good (i.e. - competitive) investment at all.

It all depends on what you compare it to.
You have to pay for electricity anyway, so a 13 year payback is a helluva lot better than no payback at all.

Willie Green  posted on  2015-01-30   18:36:16 ET  Reply   Untrace   Trace   Private Reply  


#4. To: Willie Green (#3)

You have to pay for electricity anyway, so a 13 year payback is a helluva lot better than no payback at all.

Are you serious? Where did you learn what you know about economics and finance?

SOSO  posted on  2015-01-30   18:49:27 ET  Reply   Untrace   Trace   Private Reply  


#7. To: SOSO (#4)

Where did you learn what you know about economics and finance?

I have an MBA from the Smeal College of Business at Penn State.

Yes I am serious.
"Payback period" is a simplistic metric with severe limitations. But it does have some useful purpose when comparing similar investments... (such as solar farm v wind farm) or the alternative to "do nothing" (i.e. continue paying full price for your electricity)

However, using "payback period" to compare this solar farm investment to (perhaps) investing in a fast food franchise would be somewhat meaningless.

Willie Green  posted on  2015-01-30   19:20:18 ET  Reply   Untrace   Trace   Private Reply  


#9. To: Willie Green (#7)

Yes I am serious.

"Payback period" is a simplistic metric with severe limitations. But it does have some useful purpose when comparing similar investments... (such as solar farm v wind farm) or the alternative to "do nothing" (i.e. continue paying full price for your electricity)

Yes, it is not a cash flow type of analysis but it is a good first indicator of the economics of an investment.

What you fail to understand is that, except for remote locations or specialized service requests, your out-of-pocket investment to obtain power from your local utility is zero, as in no bucks, nada pesos, zippo coin, nothing. The cost of the investment is borne by the utility and the return on that investment is embedded in the rate you pay the utility per kWh.

The cost of installing or buying into a solar installation is a real outflow of cash money from your pocket, over an above the nothing you pay to be hooked up to your utility provider, and which DOES NOT need to be made. But if one chooses to invest one should expect a reasonable return on that investment. For the most part 13 year payout projects are not wise investments, especially if the useful life of that investment may only be 15 years or so (there is some evidence that then useful life of original installed residential type solar installations is less than 15 years).

"However, using "payback period" to compare this solar farm investment to (perhaps) investing in a fast food franchise would be somewhat meaningless."

Please explain why. I would expect a favorable return on any investment that I make. All things equal (including risk assessment), why would anyone choose not to invest in a fast food franchise over the solar farm if the franchise yielded the superior return on my investment?

SOSO  posted on  2015-01-30   20:12:39 ET  Reply   Untrace   Trace   Private Reply  


Replies to Comment # 9.

#15. To: SOSO (#9)

What you fail to understand is that,

If you want a serious discussion, please don't insult me with false assumptions about what I understand.

For the most part 13 year payout projects are not wise investments, especially if the useful life of that investment may only be 15 years or so (there is some evidence that then useful life of original installed residential type solar installations is less than 15 years).

We are not discussing residential installations.
The solar "farm" is designed, built and maintained to the same standards as any other commercial utility. I would expect the economic lifespan of such properly maintained facilities to be between 20 to 30 years... well beyond the 13 year payback period.
It is also a relatively low-risk investment, especially compared to the volatility of fossil fuel powered plants.

Please explain why. I would expect a favorable return on any investment that I make.

Frankly, I don't think that this should even be viewed as an "investment." At least not in the sense that you would invest in stocks or mutual funds and expect to sell at some later date at a higher price. It is more like choosing to "invest" in higher priced LED or compact flourescent light bulbs instead of lower priced incandescents. The flourescents pay for themselves (payback period) because they use less electricity over the same time frame.

So if you're looking for an investment to actually MAKE money, yes by all means, invest in a stock market mutual fund or a fast food franchise or whatever other business venture you choose. But if you're "investing" to SAVE money that you would otherwise be spending as an "expense," then making an "investment" in this windfarm is a legitimate alternative to other methods of obtaining electrical service.

So why would you expect a "return on your investment" when you're actually analying the most cost effective alternative for minimizing your electrical expense?

Willie Green  posted on  2015-01-31 12:11:51 ET  Reply   Untrace   Trace   Private Reply  


End Trace Mode for Comment # 9.

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