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CFO's! Refresh old solar estimates OFTEN. Prices have fallen 30% between 2009 to 2012.

Helping the GATE-KEEPER remain open minded to yearly solar estimates.

Gate-keepers are usually one person; a decision-maker who may have partial or full authority to champion a solar feasibility study through his organization.  He could be a CFO, a Sustainability Coordinator, a Facilities Operations Manager, or a person in charge of Energy Procurement.

Too often I come across first line decision-makers who have shopped for solar over the past several years, say between 2007 and 2011, and some arrive at the conclusion that solar will not yield a favorable return on investment for their facility.  But did any of them ever have a formal feasibility study and financial assessment performed in the first place?  Or, did they go with an off the street estimate?  In my experience, more often it’s the former answer than the latter.

It’s a shame, because while many of these professionals are in a position of assessing the merits of an investment, like cash-flow, payback, return on investment, internal rate of return; they aren’t solar energy consultants prepared to extrapolate utility usage or fifteen minute interval data, or how utility rate tiers, energy efficiency, and panel placement affect the cost of solar electric equipment.

What’s encouraging is that the solar industry is constantly changing in efficiencies, technology and pricing; solar prices are falling to favorable declines.  So for a CFO to say that solar did not pencil out three years ago, which may be true back then, well, this is most certainly not the case three years later in 2012.  In fact it’s safe to say that between 2009 to now, solar pricing has fallen at least 30%.  What was once $8.00 per watt for residential solar equipment installed in 2008 is now about $5.25 now.  What was once about $6.50 per watt for commercial is now about $4.50 or less, depending on job size, as in, economies of scale.

Influencing champions and gate-keepers to take a second or third look at solar can be the most frustrating part of my job.  These professionals may have become jaded and over experienced in seeing estimates that don’t show promise the first time, and so with one failed exercise in pricing, they throw the whole notion of yearly estimates out the window.

Yearly estimate refresh and review for solar should be a part of the pricing protocol for new equipment and services. Purchasers know this is standard practice in any well run organization; solar estimates should be treated no differently.  Why?  Because it’s incumbent upon a decision-maker or influence-r to save its organization money, whether it’s on a widget or on a unit of energy… to pass on these yearly check-ups is remiss and unintentionally neglectful to the bottom line.

 

Article written by Jennifer Coleman of Sun Source Solar Energy Brokers, providing solar broker and alternative energy consulting services in Santa Rosa, Marin, Sonoma, Napa, Solano and San Francisco Counties.

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Sun Source Solar Brokers
525 East Cotati Avenue, #220
Cotati, California 94931
707-888-7046

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