The Value of Solar

“The greatest Value is reflected in the stable cost of solar electric power when compared to the inflationary cost of the utility power.” PV systems, over their lifetime, produce electricity at a stable price. Installed PV cost is almost entirely capital related, with very low operating and maintenance (O&M) costs. Estimated O&M falls between 0.5%-0.75% per year. And fuel costs are zero; this being the greatest advantage of PV over fossil-based fuels.

Just as insurance or certain financial investments provide a “hedge” value against undesirable future conditions, PV provides a hedge against invariable coal, nuclear and natural gas price rises. The primary value of solar is created by eliminating fuel price uncertainty.

If a PV installations cost can be amortized into a long-term financial note, say a mortgage, that cost will be far more affordable and predictable than paying the full cost at the time of installation, the typical method. Either way, the cost of a PV installation must be thought of as a long-term investment.

According to , investment means: “the investing of money or capital in order to gain profitable returns, as interest, income, or appreciation in value.” In the case of PV, “appreciation in value” best describes its major benefit. While the actual monetary worth of the PV equipment may not appreciate, the value is still there and will grow.

And not only does the value of the solar power reduce the utility cost to cool, heat and operate a residential or commercial building where the power is used, according to an article in the October 1999 issue of The Appraisal Journal , “… home value increases by about $20 for every $1 [of permanent] reduction in annual utility bills.” *

One huge advantage, t his value does not accumulate gradually over the life of the installation, like a homes mortgage equity growth. The value is immediate, it exists from the day the system begins to generate power. A PV system is an investment that will not only generate value in the form of ever more valuable electricity, it will immediately increase a homes resale value plus pay back it's entire cost over a period of years.

*Reprinted with permission from The Appraisal Journal (October 1999), © by the Appraisal Institute, Chicago, Illinois.

Installed Cost

A PV installations cost depends mainly on its design. A roof mounted and grid interactive system with no battery backup, and large enough to generate an average of 20 AC kW hr per day in Fort Worth, Texas, approximately 5300 DC Watts might cost between $6800.00 and $7500.00 per installed DC kilowatt. A similar system about half that size and output, 2600 DC Watts, may cost $7500.00 to $8000.00 per DC kilowatt installed.

Deciding to include battery backup capacity can increase the cost by as much as 40-50% depending on the type of batteries used and the capacity in Amp hours required. While trackers will increase the daily output per square meter of PV, the installed cost can be 40%-50% greater. And like batteries, trackers will proportionately increase the cost per kW hr of all the power generated.