- By Angiolo Laviziano, Chief Executive Officer, REC Solar ( http://www.recsolar.com )-
The economy in 2008 has been anything but stable, and in fact if there were a competition for naming the next Six-Flags Rollercoaster, I think "The 2008 Economy" would be the winning entry. This coaster would have big climbs, steep falls, and a few twists along the ride. In 2008 we have seen the stock market rise and fall over 700 points in a single day, the housing market take a tumble, and a $700BB bailout package come to fruition.
Looking for a conservative and stable investment has become more challenging than years past because many of the investments that we knew as staples are no longer generating the stable positive returns that we could previously count on.
One of the few sectors that Wall Street and Main Street have both agreed on as the future for investors is in the clean energy sector. So if you have already purchased a solar system for your home or business or are in the process of doing so, congratulations, you are on the cutting edge. You can be thankful this holiday season for investing in solar energy, an appreciating investment that you do not have to worry about decreasing in value with the ups and downs of the economy.
A challenging economy has further solidified the strength of investing in solar energy. A residential solar system in California on average generates a post-tax return on investment of 9%, approximately 12% pre-tax. In Colorado the return is only slightly lower due to the lower cost of electricity. For commercial customers, solar energy can generate a return as high as 20% depending on the utility rebate, utility rates, and the customer`s tax appetite.
The three major considerations/risk parameters that one must consider when evaluating the return of a solar electricity system are; (1) Will you continue to use power at your home or business? (2) Do you think energy prices will continue to increase? (3) Do you think the sun will rise each morning? Of course this decision matrix is simplified, but with consumer power consumption increasing and electricity rates increasing as much as 60% for the higher tiers of power consumption, solar energy is an extremely solid investment.
The technology that is being deployed carries power output guarantees on the solar panels between 20 and 25 years and with over 2,800 installations REC Solar has installed more solar systems than any other company in the United States.
So if you find yourself frustrated looking at your 401k plan, your home value or IRA, remind yourself that you have made one of the most solid investments that you can in solar energy. Where else can you get a rate of return of 9-20% with the only major risk in the investment is power prices decreasing? (Hint, power prices have been increasing for the past 30 years nearly annually.)