Massachusetts Program

[russ]

From our sponsor (Clean Energy Authority) links on the side bar - http://www.cleanenergyauthority.com/...begins-042811/

The CEC (Massachusetts Clean Energy Center) is deploying Solarize Massachusetts in the randomly selected Green Communities of Harvard, Hatfield, Scituate and Winchester. The pilot introduces a new business model, under which residents in the towns will employ collaborative or bulk purchasing to reduce the cost of solar from the solar installers that win the RFPs.

If anyone lives in those cities this may be a good deal.

Russ

[Sunking]

I suspect the same deal Ever Green Solar gave them. Take $60 M of tax payers money, close the factory, lay off the employees, and move operations to China. Its the GREEN Economic Recovery Policy at work.

[Naptown]

These are the type of coop's that work effectively. There are a couple in the Washington area that will provide basically a raw lead. For that lead they want the contractor to give the owner a discount of 8-10% and a kickback to the coop of 2-5%.
What they don't realize is that the net profit on these jobs is not much more than 8-9%
Invariably when I come up against them (We have stopped working with both) I can offer the customer a better net deal. Now if a coop brought me 10 buyers that were ready to sign a group deal I would certainly give a discount mostly as I can purchase material on a larger scale thereby reducing my costs which can be passed along. This is how coop's are supposed to work.

[russ]

When you mix someone with good intentions but no knowledge with the real world all sorts of strange thing come up. To me this describes much of the 'green Movement'.

On another forum some lady was wanting a solar dryer for ladies dainty things for slum dwellers. Big life quality improvement.

I pointed out that I considered this country club green where the nice ladies could have a couple glasses of fine wine and compliment each other on how wonderful they are for doing great works.

The lady had certainly never been to a slum where raw sewage runs down the street and anything not nailed down automatically is relocated to the new owners house. The building code allows use of any scrap piece of wood or plastic or anything else the owner can come up with.

[Naptown]

Remember that sell this stuff for a living. Lots of people say that they want to be greener.
The funny thing about green people is that for 99 44/100% of them the only green thing they care about is the green of their money.
They are green as long as the ROI is above 20%

[Sunking]

Rich ROI means nothing without a time frame. To break even (Get back what you invested by selling out) in 10 years is 0% ROI, or in real life terms a 50 to 70% loss.

[Naptown]

I was talking simple roi I reserve the more complicated stuff for those who understand it.
BTW I have had very good success closing certified financial planners and CPA's
So I guess this isn't such a bad investment after all. Well at least not here Texas may be another story.

[Sunking]

I was talking simple roi I reserve the more complicated stuff for those who understand it.
BTW I have had very good success closing certified financial planners and CPA's
So I guess this isn't such a bad investment after all. Well at least not here Texas may be another story.

Well Rich I got a deal for you. Here is how it works. You give me $10,000 today, and 10 years from now you will earn 100% ROI, so 10 years from now I give you back your $10K and we will both be tickled with the deal. Tell you what I will also throw in a bonus pink feather so you are really tickled pink. That is simple ROI right?

[Naptown]

Come on Derek you know that's not what I meant . after 5 years you have earned your investment back. after that it is all income.
Here let me simplify it for you
invest 10K
earn 2K per year for the next 25 years
After 5 years you have your initial investment back
The other 40K is profit
Seems to me the simple ROI is 20% and lifetime of 25 years is close to 400%
But I am no financial wizard I leave that to the CFP's and CPA's of the world.

[Sunking]

Well Rich here is what my accountant would call your example.

At 5 years 0% ROI, 0% Simple Annualized ROI
At 25 years 400% ROI, 16% Simple Annualized ROI

[Naptown]

In your example you are assuming the investment has no residual value from day one. Once the money is spent it is gone forever. never to be recaptured.
This is not unlike purchasing an investment property such as a rental house.
Say you purchase a rental for 100K and rent it out for 10K per year
Simple ROI on that investment is 10% not 0% for 10 years. Admittedly I have left out some things but the concept that the property has once purchased has no value is not a valid assumption

[Sunking]

In your example you are assuming the investment has no residual value from day one. Once the money is spent it is gone forever. never to be recaptured.

No not really. If i buy property, stock, or securities like a house or land for investment, which I do, I can sell it the next day and at least get all my money back , and in most cases more than what I paid.

Solar systems are a little like buying a new car, just not as good. As soon as you take possession, it looses 30 to 70% of its value depending on what state it is in. Here is TX if it cost you $10K to install, it only adds about $3K to your property value.

Take a loan out for it, and you are pretty much screwed, and paying about 300% more for electricity for the next 5 to 10 years depending on the term. That is not an asset, that is a liability.

[Naptown]

Well lets look at it this way
You buy a 5 KW system here in MD That will produce about 6000 KWH a year
The system should last 25 years You pay 25K for the system and throw in an inverter abut half way through for 3K
So now you have 28K invested in a system that will produce 137500 KWH hours in its lifetime counting on on output degradation over the years.
28,000/137500= .20 per kilowatt hour cost
Now factor in the incentives
30% of 25K = $7500
So take that out of the equation and the cost is down to $20,500
Now the cost per KWH is .15 Or roughly what I currently pay for electricity.
Add in State grants of .50 per watt and the cost comes down to 18K
Now the electricity is costing .13 per KWH
Factor in county tax credits of 5000 and the cost is now down to 13K and KWH cost is down to 9.4 cents per KWH
Finally add in SREC payments of 9K over the next 10 years and the cost is down to 4K or roughly 2.9 cents a KWH which will not be subject to inflation which is not counted in this exercise.

[Sunking]

So what you are saying then, which is what I was trying to drag out of you, is it has to be heavily subsidized for very long periods of time with other peoples money to be profitable?

[russ]

Like your golf cart?