Rising Sun

by Osman Parvez

Looking for company on a training ride, our friend Ray stopped by the house this past weekend. Although my bathroom scale thinks otherwise (lies!), theoretically I'm training to ride my first century (100 mile bike ride) with him this summer.

Ray Tuomey is the Marketing Vice President for Namaste Solar Electric, a Boulder-based, employee-owned solar electric company that designs and installs renewable energy technologies in homes and businesses in our community. Namaste has been involved in many local solar panel installations in Boulder, including a recent project for the Boulder Homeless Shelter saving the organization up to $5,000 a year on its electric bill.

We asked Ray for an update on the state of solar technology in Colorado, and he did us one better. Here's a recent article written by company President Blake Jones

By Blake Jones, President
Namaste Solar Electric

Why is Solar Electricity becoming so popular?
Higher energy prices, a growing public concern for the environment, and our nation’s increasing dependence on foreign oil have prompted strong interest in solar electricity. Solar photovoltaic technology, also known as solar PV or solar electricity, has been around since the 1950s. Historically, solar PV has predominantly been used by NASA and for remote applications such as “off-the-grid” homes, traffic signs and telecom stations. Lately, however, solar PV has become a cost-effective way to provide power for homes and businesses in urban areas as well. Beginning in Japan and Germany, and more recently in the United States, financial incentive programs have kick-started the solar PV industry in an effort to diversify energy sources and encourage the industry’s expansion. Colorado recently became the 20th state in the country to initiate solar PV incentive programs. Colorado, therefore, is poised to undergo an exciting solar “boom” as it promotes the installation of solar electric systems on thousands of homes and businesses throughout the state.

What is Solar Electricity?
Solar photovoltaic panels convert sunlight directly into electricity via the “photovoltaic effect.” The amazing facet of solar PV panels is their ability to generate electricity from the sun without moving parts and without producing noise or emissions. Because solar PV panels can be used like building blocks, systems of any size can be made by combining dozens or even hundreds of solar panels.

What are the benefits of Solar Electricity?
Solar electricity has numerous benefits for our economy, society and environment. Solar PV systems produce zero emissions, operate silently and do not produce radioactive or other types of wastes, thereby eliminating some of the worst problems associated with conventional energy generation. Solar electricity is fueled by an abundant and renewable resource, the sun, and does not contribute to resource scarcity for future generations. As many of us know, resource scarcity is the root cause for many of the political, economic and social problems plaguing the world today. Unlike oil, of which more than 50% of the USA’s daily requirements must be imported from abroad, solar resources are abundant throughout the USA and can help bolster national security by reducing our dependence on foreign fossil fuels. Lastly, solar PV is extremely reliable and long-lasting. Not only is the sun a dependable fuel source for millennia to come, but solar PV panels have effective operating lives of 30 years or more. With no moving parts and minimal complexity, solar panels are backed by 25-year manufacturers’ warranties. It’s no wonder that NASA has relied on solar PV for decades to power satellites and space stations in the most extreme of environments. In the end, solar PV technology has numerous advantages over conventional energy technologies in a wide variety of categories.

What financial incentives are available in Colorado?
Following the examples of Japan, Germany and 19 other states in the USA, Colorado is taking serious steps to support solar electricity. In November of 2004, Colorado voters passed Amendment 37, a law mandating that specific percentages of electricity be produced by solar PV systems installed on homes and businesses throughout the state. In order to encourage customers to purchase and install solar PV systems, many utilities such as Xcel and Aquila will be providing cash rebates and other incentives. In addition to the state incentives, the federal government recently passed a new energy bill that provides 30% federal income tax credits for installing solar PV systems. As a result, the cost of installing a solar electric system on your home or business in Colorado can be reduced by as much as 60%-70%.

How is Solar Electricity used for homes and businesses?
Installing a solar PV system for your home or business is typically an easy and simple process. For buildings connected to the power grid, no changes would be required to the existing electrical system or to the occupants’ lifestyles. Solar PV panels are usually installed on the roof in an un-shaded location, preferably facing to the south. Next, a safety disconnect and an inverter (a component which seamlessly interfaces between the solar PV panels and the power grid) are typically installed on the building’s exterior wall next to the utility’s electric meter. Most installations require only a few days and occur entirely on the outside of the building. After installation, the solar PV system can begin producing electricity for the building and therefore start reducing its electric bill. Solar electricity immediately used by the building will offset electricity normally purchased from the utility. All solar electricity not immediately used is sold back to the utility at a retail rate, thereby giving the customer credit by spinning the electric meter backwards. The meter may spin forwards and backwards multiple times per day, or it may simply spin forward more slowly than usual, with the end result being that the solar PV system reduces the owner’s electric bill – sometimes to near-zero.

How do Solar Electric Systems affect property values?
As solar electric systems have operating lives of 30+ years and require almost no maintenance, installing a solar electric system is analogous to buying 30+ years of electricity at an upfront, one-time, fixed cost. In doing so, you’re protected from the risk of rising energy costs; it also reduces your living and operating expenses. In the event that you have to sell your property before you’ve reaped 30 years’ worth of benefits out of the system, you’ll still be able to recoup your initial investment via the higher resale value that results from your solar electric system. Imagine two homes that are the same square footage, have the same features and are located in the same neighborhood – but one has lower electricity bills; logic would dictate that this home would be worth more than the other. The good news is that market research supports this idea and shows that the buyers have paid an additional $20 on the home’s purchase price for every $1 in annual utility bill savings1. In general, homes and buildings with solar electric systems – and therefore lower utility costs – are worth more than those that incur expensive utility costs.

What is the future of Solar Electricity in Colorado?
With the passage of Amendment 37, ongoing hikes in energy prices, increased anxiety over fossil fuel resources and a growing public concern for the environment, the stars – or suns – are well-aligned for solar PV electricity to shine ever more brightly in Colorado.

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The ideas and strategies described in this blog are the opinion of the writer and subject to business, economic, and competitive uncertainties.   We strongly recommend conducting rigorous due diligence and obtaining professional advice before buying or selling real estate. 

Please Note

This document contains forward-looking statements. You are strongly cautioned that investment results are subject to business, economic and other uncertainties. There are no guarantees associated with any forecast and the opinions stated here are subject to change at any time. Always consult your financial advisor before making an investment decision.