Tuesday, June 26, 2012

Maryland's 10 year lease net cash effect on a solar photovoltaic system - economic no brainer in Maryland in 2012

In Maryland, it is an economic no brainer to act now vs wait until tax incentives expire after September 2012.  The post 1603 (30% federal credit) world of solar project development will be largely based on jurisdictional SREC markets and rebates.  MD revised their $50,000 rebate cap to $6,000.00, and is counting on the fairly hot solar renewable energy credit (SREC) market now.  These projects can take up to 6 months to engineer, procure, construct, interconnect with the utilities and activate.  If you were considering solar power before now and have done some research into it this is not a tough decision.  Lease options get less attractive for you after the 1603 financier incentives go away and you will be stuck in long term Power Purchase Agreements without an opportunity to earn money through SRECs (the investors who own the systems will).

The above scenario looks at a 99kW system on a 10 year lease available to non-residential customers in Maryland and assumes electricity rates (including distribution and generation charges) added together to be about $0.13/kWh (the average in Maryland is $0.134/kWh, and has steadily been rising at 5.5% annually for the last 25 years like the national trend.

For those who are uncertain about dabbling in the SREC market over the next 10 years, will be forced to invest their own cash, or loans or enter into fixed rate Power Purchase Agreements like the summary below.  Energy rates start at 15% to 40% lower than your current rate and escalates at a 2% to 3% annually over the next 20 to 25 years (half the current inflation rate on energy).  Click on the images to enlarge and compare the pros and cons of each.

Call Raj Dwivedi at 410-992-2646 or email rdwivedi@mercurysolarsystems.com to learn more or get a specific free site analysis done for your site to see if solar photovoltaic power plants are a good fit.

No comments:

Post a Comment