Doing the math: 75% savings on $200,000 annual cost results in $150,000 in
annual savings. If it cost $2 million, it seems it would take just
over 13 years to pay off. What other factors have not been
discussed? Energy credits? Depreciation?
A power bill of $200,000 x .75 =$150,000 If you multiply that by 4 you get
$600,000. Still shy of paying off the panels.Out of curiosity is
the rest of the money recovered through tax subsidies or was it just a rough
Did any tax rebates or incentives help make the project worthwhile for the
company? Either way, it is great to see Utah companies undertake projects like
Let's crunch the numbers:Worst case $150,000 energy costs per year,
75% reduction and $2 Million installation cost = 17.7 year payback.Best
case $200,000 energy costs per year = 13.3 year payback. Neither is anywhere
close to a four year payoff unless they're only talking about how long it
will take them to pay back the construction loan.There might be tax
incentives but I oppose any corporate tax because we customers are the ones who
ultimately pay those taxes; they're built into the price structure.
RBN: That was my question as well. The article tried to make it sound like the
company would recoup its capital investment cost in under 5 years from the
electrical usage savings, but that is obviously false.The company
may actually pay off the loan it got to pay for the project in under 5 years,
but that would be by using money from other sources.I am still
waiting for the industry to really come clean on what the actual ROI is on these
kinds of solar installations without factoring in major tax breaks or outright
subsidies.Clean energy may be "green" but that color has
nothing to do with saving you money.
Well, there is the cost of capital to consider. If they took the $2 million and
invested it in their business, what kind of return would they generate? 5%? or
more?So if you assume a 20 year useful life of the equipment at 5%
interest, the monthly payment would be $13,199 per month. (Actually the normal
average life of a solar panel is 7 to 10 years.)If you take an
average of 150k to 200k at 75%, that works out to $10,937 per month.So
that would be a net cost before tax subsidies of $2,261 per month. If the useful
life is 10 years, then the increase in total costs would be more like $5,000 per
month.So bottom line, they are getting some kind of government
subsidy to do this or they wouldn't do it because their costs for energy
would be increased by at least $60,000 per year, not including maintenance and
Speaking of coming up with the money to pay for it -- Burton Lumber
has just won my business for life...[and there must ten's of
thousands of others who feel that same way.]
The disadvantage with solar is the cost to set it up, install, and recoup the
costs associated with it.They have yet to make it enticing enough to
make it financially worthwhile. That's even with the taxpayers footing
large portions of the costs, so people can get power off of their backs.Maybe, solar panels need to become more efficient and we need to focus
on a way to store that power on site. Then get the price down, without taxpayers
subsidies, to a point that everyone would push to get it.Until the
science can figure out the efficiency, there isn't much solar can do....
From their own website:Enviromentally FriendlyBurton
Lumber is proud to lead our industry in sustainability and working with our
community to be more environmentally conscious. We Recycle, Reduce and ReUse.
======= Shows a Company with integrity.Lead,
Follow, or get out of the way.
lol.....I guess burton lumber needs an accountant before it goes and spends
another buck! Right Danno!
Okay, let's come clean on the government incentives for solar energy.
Don't forget that all energy is highly subsidized by the government -- from
water (for coal-fired steam plants), railroad transport of coal and oil,
Obamacare for black lung disease for coal miners, water clean up in West
Virginia coal-toxins spill, clean up of oil in Mexican Gulf, military costs to
secure/escort oil tanker out of the Mideast, elimination of severance taxes (as
in Utah), nuke waste, etc. The problem is that solar doesn't
get to benefit from all the government-sponsored/paid for things that coal, gas,
and oil get because it doesn't use water, railroad transport, cause black
lung, etc. Thus, solar needs to have its own subsidy to be more competitive
with subsidized fossil fuels.
Burton Lumber is now consuming 75% less electricity as a result of this
investment! Instead of trying to do the math … all of us should just
start Conserving as well! Doing your own part will be time well spent! Great
Job Burton Lumber, Utah