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Future SOT Article on Commercial Solar Project


Erik Sine

Solar Energy  

23 members have voted

  1. 1. How should solar energy projects be funded?

    • Solely by the recipient (Long ROI)
      18
    • Recipient and your tax dollars in "rebates" (Short ROI)
      5
  2. 2. If everyone in your state applied for solar rebates tomorrow, is there enough money for it the next day?

    • Yes
      1
    • No
      19
    • You know, I just don't know...
      3


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I thought I'd kick this around a bit and get some feedback. Next month or Oct., the Community Organizer's magazine is going to do a big hoopla on Solar Energy for New Jersey Based Philadelphia Sign Company. I'm sure there is going to be a lot of talk about "Green" and no doubt the Cali based "Sign Hugger" will be eating a piece of broccoli all while blogging about how orgasmic it is all over Facebook, Linked in Groups and whatever social media she has time for. Just more marketing statements, something executed and never explained.

But what I'm curious to know is "Real" peoples opinion about it. We just read about the large Oceanspray company leaving NJ for PA mainly to get away from the "Renewable Energy" taxes that were coming among others. The cost of power in that state is ridiculous already, and PA was a much better fit due to lower regulation, even though it would cost more up front to leave NJ, but less expensive along the way. It wasn't until the big news of Oceansprays exit and loss of jobs that Gov Christie vetoed the Cap and Tax state bill that he was about to sign. But, too little to late.

Now, I'm not too familiar with New Jersey's commercial solar project incentives. But what little I do know when it comes to Cali, it's Stealing from Peter to give to Paul. Peter has to pay taxes that go to Paul's Hobby, or, we're paying for Paul's hobby. Paul has to pay some out of pocket, which he will make back in a short term ROI, but the bigger half comes from rebates, and "incentives". Programs that like anything else when it comes to cost, rolls down hill to the consumers. Those hidden taxes I get at the end of my energy bill, that unexplained page and a half.

I don't know the true ins and outs of the Philadelphia Experiment and how much they paid out of pocket versus rebates, or if they funded it entirely by themselves, maybe they'll chime in. Bless them for taking advantage of something that's there for them to grab, not knocking them. It's smart business if it gets them savings and turn a better profit. That aside, I'm only talking about it because our industry media will no doubt be organisming all over it. otherwise I wouldn't even be talking about it and only staying with generalizations when it comes to "Green" and solar.

But what would happen tomorrow if every citizen and business, suddenly signed up for the incentive programs at once? Is there enough money the next day?

Thoughts and advantages and disadvantages?

I don't think any of these questions or topics will be in that issue of "Signs Fiction"

PSCOGoesGreen.pdf

You have enemies? Good. That means you've stood up for something, sometime in your life. - Winston Churchill

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It doesn't mention anything about them feeding power back into the grid at pre-set rates, so this seems to be entirely about the company itself becoming more energy efficient. Imagine being off grid and never having to pay a hydro bill. You have to think that a company with 225,000 square feet had some serious bills to pay every month.

If they spent their own money to do this then nobody really has anything to say, other than hats off for not only putting you money where your mouth is but also being in a strong enough standing to invest on this kind of scale that may not have any positive impact to the bottom line for a little while.

That said - it's possible (probable) that some form of tax credit, rebate or efficiency program was made us of. In that case I think the evaluation is a little more complicated, but it's still better to invest into things that actually reduce consumption at the source, rather than force people to pay more for energy that comes from 'green' sources without any change in efficiency by the user. if programs are going to invest in new technologies and 'go green' then it's far better to help healthy business reduce their demands on the grid, than to put up windmill or solar farms and then charge everyone higher rates.

This accomplishes more with less.

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Anytime the government dicks around with the free market it costs consumers more money. If solar and wind can't compete, then they should not.

Over the last few years on the highways around here I would see these huge nacelles for wind turbines, it took me a bit to even figure out what they were. It was no surprise when I inspected one at a truck stop to find they are made by GE who's CEO has Obama in the back pocket of his green pants.

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  • 2 weeks later...

I used to work for Seagull Lighting in Riverside, NJ - they are one of the largest residential lighting companies in the world.

They did the same thing with solar on their huge warehouse

My understanding is that it would cost the power company more money to trench a new power main to their facility than it would to give them a rebate to go solar.

I am sure Philadelphia Sign is the same. There are several people on this board from Philadelphia Sign, I am sure they can comment

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  • !llumenati

What would be interesting to see is, since the project was done a year ago are the projected savings vs. cost in line with what was perdicted and how much is actually going back into the grid.

GOOD things happen for a reason......

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I'm slowly researching a lot of this.

What is interesting is the SREC credits that they get back, which is the larger part of their return on investment. These credits which is the energy going back to the grid or the energy which the utility companies buy back, or are "required" to buy back from residents or business's (SACP)is a fluctuating price, and it's more of a mini-stock market. These can be long term contracts at lower prices or single shot auction deals at higher.

New Jersey seems to pay the most so far compared to other states(SREC), NJ being about $670 (High) to states like Connecticut who pay $200 High which of course pushes that ROI up further. But, the states dictate demand here, they dictate to the utility companies how much SREC's they need to purchase per year, and every year the government will push that requirement further up in the form of RPS or Renewable Portfolio Standard, so, it's not true market demand, it's the government "creating" demand. So this probably why New Jersey Renewable energy taxes are crazily high. As the supply of SREC's go up (more panels), the demand will drop with SREC's being paid back less. So, the government will create a higher demand each year as individuals take advantage of incentive programs. So again, this is cost passed onto the consumers who seem to pay the highest per KWH in the nation along with New York, and it appears to be $.21 per kwh, and rising.

With government creating demand and creating buyback, I'll ask at he question again, if everyone got a system tomorrow, who will pay for it, and how?

The figures of these panel manufacturers re-producing power, some say 80% of it's original reproduction in 10 year period, can that be relied on like similar marketing claims, such as light source marketing claims in our own industry? We know this to be false.

You have enemies? Good. That means you've stood up for something, sometime in your life. - Winston Churchill

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Erik, why don't you give them a call and just ask them? Robert Mehmet is the top guy over there and a pretty decent guy to talk to if you say that you're researching the effectiveness of solar projects with signage. Being a sign guy, he can explain the reasoning in a way that applies specifically to the industry this forum serves.

You don't know if it's a one time rebate, ongoing savings or the feed-in rates that are their reason for doing this. They may or may not care about the feed-in program if they're able to save on their own energy costs and/or have saved costs in having the electrical authority expand their services, as Manuel pointed out.

...

We have a questionable energy program going on here with Samsung, where the government is offering some loans and tax breaks for them to setup $7 billion worth of solar and windmill manufacturing facilities here. The front end of the deal makes sense in order to have the plants here, generating jobs and taxes and supplying a growing demand - but the back end of the deal where Samsung gets an extremely high feed-in rate for the wind or solar they generate within our own markets is going to be very expensive for consumers and businesses alike.

I don't know if you guys were aware, but Ontario is the automotive manufacturing powerhouse in North America, with plants from all 3 of the big US players as well as multiple Toyota, Honda and Magna plants. These were originally incented by government to locate here also, ask TN or AL what they're doing to attract manufacturing, but they didn't lock taxpayers into buying a certain number of vehicles at fixed, inflated prices. That's what these sort of energy deals would be equivalent to.

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Erik, why don't you give them a call and just ask them? Robert Mehmet is the top guy over there and a pretty decent guy to talk to if you say that you're researching the effectiveness of solar projects with signage. Being a sign guy, he can explain the reasoning in a way that applies specifically to the industry this forum serves.

You don't know if it's a one time rebate, ongoing savings or the feed-in rates that are their reason for doing this. They may or may not care about the feed-in program if they're able to save on their own energy costs and/or have saved costs in having the electrical authority expand their services, as Manuel pointed out.

I've barely had time to do the SIEMENS/OSRAM debunk which was short, not to say PSCO is something that needs debunking, but this isn't about putting PSCO on the forefront or savings on bringing in additional services to a location, I'm sure those situations exist somewhere. I can't even get my questions answered by the Solar Company who did the PSCO project, by returned phone call or email.

In the State of NJ, they receive a 30% government rebate for their 4.5 million dollar contact, the 70% remaining is their own cost. PSCO also had to redo their roof for the panels, which is another additional cost outside the Solar Panels. In order for them to help with their savings they have to rely on the SREC credits, and the market sales of those credits which goes up and down and with a government to help create that demand on utility companies, otherwise the 4.5 million which is not known to be the 70% or before the 70% rebate would take a very long time to make back, not counting the degradation or depreciation of the panels that would be in reduced return in energy year after year.

If someone want to spend their own money and millions of it and not care how long it takes 20- 60 years and not care about the additional service and re-retrofit costs to make their money back then that's their business, which we know PSCO did not. But costs get passed down to us, leaving PSCO aside for now the government is increasing the demand that utility companies buy back from consumers every year, their raising demand that is not there, or creating demand, so costs go up, and the consumer pays more all to pay for the environmental hobbies.

If Solar power is not needed and it's a created demand by the government only, or if it's not cost effective to have then why "force" the utility companies buy it? The more utility companies spend the more the consumers spend just to fictitiously save trees, or reduce a "carbon footprint" which again is farse. Ever wonder why it makes sense to build a product that can take 150 more watts over a conventional product to build just to save 5 watts? It will take more energy to build something than it can actually save.

I may have time to call, but it's not really the basis of this thread, the thread is about the prediction of what's going to come, and what's going to be said and marketed from our own industry media who never dip deep and only skim the top and eat the cream. The newly re-branded red movement painted as green will be reported that trees will be saved and planted, carbon footprints will be less, jobs were created (oh wait) the polar bears will be saved..oh wait, isn't that scientist in jail now for fraud on reporting/starting that? Anyway, i'm just touching on facts here that the Community Organizer will not hit (like a lot of others), nor report, unless he takes this thread into account, which we may see him make edits now after reading this. So if his article mentions any of the above facts then we know it got altered, hopefully so, hopefully not another brochure marketing article for the new re-branded red movement of re-distribution of wealth, where government creates the demand, not the consumer.

With the most important question yet to be answered, if everyone did this today, would there be money for it tomorrow?

You have enemies? Good. That means you've stood up for something, sometime in your life. - Winston Churchill

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With the most important question yet to be answered, if everyone did this today, would there be money for it tomorrow?

The 70% requirement pretty much guarantees it will be limited in scope. It's like asking if everyone got in their car and drove at the same time, would there be room for them on the roads? It would never happen, so it's not a particularly useful question.

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I'm not asking if everyone turned on their AC and Hair dryers on full blast if there is enough energy on the grid to cover it, I'm asking if everyone took advantage of the rebates today, & and accumulated SERC's, would there be enough money (from the government) to pay for it? Or is it going to be like Social Security, cash for clunkers, something that never gets paid back or CAN it make it on it's own? My best guess says no.

So if Solar Power is so great and grand why does the government have to incentivize it? Can it make it on it's own paid by the recipient only? The Organizer won't include this, it's just going to be another brochure piece, ISA will vamp it up in the next industry report, the Sign Hugger will run with it on social media while gnawing on broccoli, and it will be a good "feel good" story with all the usual flimsy cardboard backdrops, that will get knocked over by a simple breeze.

You have enemies? Good. That means you've stood up for something, sometime in your life. - Winston Churchill

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If it makes commercial sense, businesses would be investing in it. The higher the ROI, the more gets invested until the point of diminishing return turns the ROI. Several of the incentives around the nation to entice getting more efficient lighting or HVAC has been driven by private local monopoly power companies. They determined the cost of adding generation capacity, and the cost of the money was cheaper to help the customers be more efficient than adding additional capacity.

In TN the TVA is the electric power generation pseudo government agency and local distribution is local companies, but rates are basically TVA dictated cost + local distribution costs (and profit, expenses, etc). TVA has a power buy back program, basically they will purchase 'green power' for a bit more than they sell it to you, because they have a mandate to have x% green power and they haven't met that. They have a fair amount of nuke, hydro, some solar, some wind, some 'methane' power (methane digester at sewage plants near Memphis I think), but mostly coal. They shut down building nuke plants years ago (remember, in the '70s or so when nukes were bad?), but are not restarting those projects (some of which were fairly far along) but are starting new nuke projects at different locations. If it made economic sense in $/kwh for the power companies, including TVA, they would be coating our freeways with solar cells (or other waste land that has no other economic use).

It seems like the best use of solar is for 'off grid' where there is a significant cost of connecting to the grid.

I am not totally opposed to Govt 'investing' in technology. NASA has generated so many spin offs that have generated MUCH more economic activity than it cost us to fund NASA over the years (much medical research, materials like Teflon, many epoxies, ceramics, and so much more). But basic research where the probability of ROI starts 30 to 50 or more years out, IMHO, is reasonable for government research monies. 10 to 30 years companies like the OLD AT&T, IBM, etc could afford to do, many companies can and do afford research in the 5-10 years realm, and even this forum/industry group is doing and funding R&D in the 3-5 year realm!

Having people invest individually requires a pretty high ROI. It makes economic sense for individuals to change out high use light bulbs from incandescent to fluorescent or LED. I remember my Dad's in the '60s changing from incandescent to fluorescent in the engineering areas (Bell Helicopter, large areas of engineers and draftsmen ... and they replaced all the fluorescent bulbs every 2 years. The quality of light for the professionals effected productivity thus the bottom line..

I worked for a company (large oil) that did not want to consider a ROI on projects that didn't pay off 100% in 6 months for internal projects, or 18 months for outside projects. (Sometimes their methods of computation were pretty esoteric and didn't make sense to common folk like me, but they were consistent and still found plenty to invest in.) Most of us would love to invest in projects like that with a high probability of payout. Solar doesn't meet even a relaxed 18 month ROI let alone what companies need to get to invest their capital.

So why do it? Governments are doing it because constituents (solar industry, tree huggers, etc) drive it, and the public isn't arguing because they have some desire for it (just not enough to invest THEIR money).

Personally, I would like to feel assured I would get a 5 year ROI (20%/years) to put solar on my house. That is where I see my threshold for this kind of investment is. That includes a 5% sinking fund because most solar equipment is shipped with a 20 year life and will have to be replaced every 20 years as the expected life span (or be able to financially even if you don't do it).

Again, just my perspective.

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October Issue came out today. This article looks like it came out different than originally intended, or what was about to be, IMO.

On another part about the Section 1603 government subsidies, it is cash, not a tax deduction of the 30% project cost.

2011-09-11 - S1603 Overview - No Maps.pdf

The reason for taking the 1603 instead of the Production Tax Credits or PTC, is because it is not legal for the US Treasury to rank/evaluate each project before distribution of funds (Everythings rubber stamped) . Upfront cash grants have shifted to grow the industries dependency on government subsidies, leaving developers to have minimal incentive to negotiate lower prices with their suppliers and MOST importantly there is NO obligation to meet claimed capacity factors.

Production tax Credits are based on project performance, the cash grant is not. If the projects net capacity factor is mediocre, the taxpayers in the form of stimulus dollars issue the grant anyway

You have enemies? Good. That means you've stood up for something, sometime in your life. - Winston Churchill

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Erik - since you posted the original article in PDF - it would probably make sense for you to post the actual published article in PDF also, so that people can compare what you're talking about.

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from SOT?

Yeah, I don't have my copy yet. You posted the first one and mentioned later that it's not what was published in the magazine, so it would be nice to comment on the actual article and not the early draft.

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I don't have a pdf version of the magazine, maybe there is a external link, not sure. But pretty much it's a short, short write up, not what I was expecting after they published a blurp about a big future article months in advance, it may have been detoured. If that's the case, then thank you for those, for coming to their senses.

The write up is half about their 100 year history, with a lot on decision making, then 10% about the green crap. And their rush to get the project up and started so they can make a rapid ROI (not mentioned ---->) before the congress and next president take serious matters of cutting government waste/programs such as Green Projects, which have cost more jobs than started.

So, I thought for sure we were going to have a larger article, larger than the obligation piece on the "Strictly Electric", an article that was much more detailed about the Sloan value line and "rope" leds to light up a McHenry Row water tower, typical "Unimaginative" SOT article

Can't say for sure if the Solar article was diverted, but hopefully so.

You have enemies? Good. That means you've stood up for something, sometime in your life. - Winston Churchill

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I got this sent to my email this morning about a free October subscription>>>>>>>>>> http://issuu.com/signs-of-the-times/docs/1110sign?viewMode=presentation&mode=embed

This article is not much more than the original write up by Array in the pdf file of the first post of this thread that I downloaded >>>>>>>>> word travels fast from this forum at lightning speed so good job of discussing what wasn't talked about in length when it comes to green energy >>>>>>>>>>That is why this forum is so valuable

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