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< back to Is Solar Viable
The financial return on investment for solar projects can be outstanding – but as discussed herein, there are many variables. In a state with an incentive program, Eos can typically design and deliver a system with IRRs in excess of 20% - sometimes far in excess of 20%
Eos has developed a proprietary project-specific financial modeling tool to assist client in assessing ROI based on NPV and IRR, over both short term (5 to 7 year) and long term (25 year) scenarios. The following is a sample of prospective projects:
| Location |
Philadelphia, PA |
Los Angeles, CA |
Tampa, FL |
| Real Estate Asset Type |
Office |
Retail |
Hotel |
| System Size (DC rated) |
62 kW |
48 kW |
25 kW |
| Turn Key System Cost |
$520,800 |
$403,200 |
$215,000 |
| Less Federal ITC |
$156,240 |
$120,960 |
$64,500 |
| Less State Rebate or Grant (1) |
$204,161 |
$134,400 |
$100,000 |
| Effective Cost to Owner |
$160,399 |
$147,840 |
$50,500 |
| Existing Power Cost Ave., kWh |
$0.101 |
$0.142 |
$0.135 |
| Ave. REC value kWh/yr |
$0.13 |
$0.015 |
$0.015 |
| Average Daily Insolation |
4.2 |
5.3 |
5.2 |
| Aggregate System Efficiency (2) |
74% |
74% |
76% |
| kWh Annual Yield |
69,686 |
75,196 |
37,239 |
| First Year Cash Flows |
$25,101 |
$20,851 |
$13,863 |
| 6 Year IRR (3) |
43.7% |
31.6% |
39.6% |
Notes:
(1) PA rebate based on current proposals for program in development. CA rebate level is pe
rformance based (for commercial projects) and decreases over time. FL rebate program is fully allocated through 2007at $4/w DC.
(2) Illustrated FL project efficiency is higher due to cap on commercial PV rebates at $100,000, such that highest efficiency modules are cost effective
(3) IRR includes asset divestiture with value of resultant increased NOI at a 8.25% capitalization rate. First year Cash Flow and 6 year IRR assume 70% capital investment leverage at 8.00% |
The economic viability of a commercial photovoltaic system is, of course, dependent upon... read on>
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