Thoughts on Solar by Run on Sun's Founder & CEO, Jim Jenal

According to this ABC News Report, the US Bureau of Economic Analysis revealed that corporations are hoarding $1.6 trillion in cash reserves, an all-time record.  From the article:

Even looking at the companies in the Standard & Poor’s 500 index of blue chips – and stripping out financials, which are required by regulators to keep large cash reserves in order to cushion against risk – the cash on hand number is still rather monstrous: $1.1 trillion. To put that in perspective, as a percentage of companies’ total market capitalization, that $1.1 trillion is more than double the ratio seen before the crisis.

“Cash is piling up faster than companies can figure out what to do with it,” said David Bianco, head of U.S. equity strategy at Bank of America.

We have the perfect answer for companies sitting on cash and wondering what they can do with it to generate a safe return - invest in a solar power system on your building(s).  Don’t think that is much of an investment?  I think I can show you that it is, but let’s first look at the competition.

If you were going to invest that cash you would want safety and a decent return. But if you put it in a CD, the highest interest rate available today would be around 3% for a 5 year CD. That’s it - three percent.  Not much of a return, and to get it you have to lock-up your money for five years.  So how does that compare with installing a solar power system?  Let’s look at an example from a real world customer.

Imagine a small business like a printing company.  Takes a lot of electricity to keep the presses running.  For our example we will assume a $35,000 annual bill from SCE and to partially offset that we will install a 30kW solar power system on their roof.  (The economics would work even better with a larger system but in our example we are constrained by the physical size of the roof.)  What would that system cost and what would the savings be?  We estimate a price tag of around $175,000.  Applying rebates and the 30% federal grant brings the out-of-pocket cost down to $108,000.  Based on our SCE rate model, Energy savings in Year 1 would be $7,900.  When you apply the CEC’s historical average electrical cost increase of 6.8% per year and account for the accelerated federal and state solar depreciation rates, you wind up with payback occurring in Year 6 and an Internal Rate of Return over the 25 year lifetime of the equipment of 15.1% By Year 10 you are $57,000 to the good.

Here is another way to look at it.  For many businesses, one of the major monthly costs is electricity and over time you know that the cost will continue to go up.

In the example above, Year 1 electricity costs from SCE were nearly $0.27/kWh.  Over the lifetime of the solar power system, not even factoring in the additional savings from depreciation, the cost per kWh from solar is only $0.15  and that cost is fixed for the next 25 years. (Click graph image for a larger version.)

Unlike that puny 3% return on your money from parking it in a CD, your investment is a solar power system will pay for itself in just a few years and continue to give you ever increasing returns year after year!

If your company, like the companies in that report, has been hoarding its cash while looking for a safe place to put it, now is the time to invest in solar.  Click on the button at the right or call us and we can help you start saving now.