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That is great news for solar fans, but the story behind Palo Alto’s low electricity rates may not be. Several readers explained that Palo Alto has such low rates because it, as a minuscule provider of energy, is not yet subject to government-mandated development and purchase of expensive renewable energy. Simply put, Palo Alto still sells cheap old-school power.
[contextly_sidebar id=”559e2f48c86f272c8ff89794c4fbff8a”]Mr. Gerber’s second point—that our system is saving us more than we think it is—is wrong. Every number we used in our analysis comes directly from Sun Light & Power. Our system is saving us 56 percent less than Sun Light projected.
Gerber: We are generally conservative in our estimates of the energy production we expect from our systems. In the case of both Clif Bar and Mr. McNellis’ system, we have determined that in 2012 these systems both produced about 10 percent MORE power than we originally predicted that they would. So Mr. McNellis’ system produced about 10 percent more savings than he thinks it did. In the case of Clif Bar, their system generated approximately $145,000 in savings compared to what they would have paid without the PV system.
So lesson #3 is choose a solar provider that under-promises and over-delivers.
McNellis: Again, all of the projections we received and the actual operating data for our system comes directly from Sun Light and Power.
Gerber: Mr. McNellis correctly states in his article that the solar calculations are quite complex and may be hard to understand. We deal with these complex issues every day, and we have done so for many years. We have our own financial analysts and a CPA who know how to deal with the complexities in order to explain them to other financial analysts and CPAs. All that our potential customers have to do is ask us, and we will provide the assistance that they need to figure out what will work best for them BEFORE they commit.
So lesson #4 is do your homework before you buy.
Clif Bar did their homework, and it is paying off handsomely for them. They are seeing substantial savings that are growing every year. Their system should pay for itself in about 10 years from the date of interconnection, and we expect it to produce virtually free energy for another 20+ years after that. Their net savings should be over $3 million over the life of the system, adjusted for inflation. They should save over 22 gigawatt-hours of electrical energy in the first 30 years, resulting in an emissions reduction of over 5,000 tons of carbon dioxide over that time period. And once we have a true carbon trading market in California, those carbon dioxide reductions could become quite valuable, too! Market conditions have improved since both Clif Bar’s and McNellis’ systems were built—prices are much lower and more and more general contractors understand how to coordinate with solar integrators. Many systems, even those as small as John McNellis’ system, could see paybacks in 4 to 7 years if proper steps are followed and the nuance is understood in advance of installation.
Fishing is far too risky. Solar power is a much better investment IF you choose the right site, pay the right price, select the right contractor and get on the right rate schedule. That is why solar is gaining in popularity and continues to thrive throughout California.
(Editor’s Note: It’s worth pointing out that the majority of feedback received by McNellis is of a decidedly different opinion than Gerber’s. That aside, the value of the original article and Gerber’s response may simply be this: Every owner contemplating a solar energy system should carefully vet its economics well in advance of committing to its installation. It is important for the solar industry to understand its limitations and help customers like McNellis navigate the details of the transaction.)
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