Comments about ‘Utah lumber company installs solar array on roof, reduces energy costs by 75 percent’

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Published: Wednesday, Jan. 22 2014 1:42 p.m. MST

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RBN
Salt Lake City, UT

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?

Liberal Ted
Salt Lake City, UT

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 guess?

Francis LeGuarde
Sandy, UT

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 this.

kiddsport
Fairview, UT

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.

JoeCapitalist2
Orem, UT

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.

Steve W
Cedar Hills, UT

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 snow removal.

Open Minded Mormon
Everett, 00

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.]

Liberal Ted
Salt Lake City, UT

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....

Open Minded Mormon
Everett, 00

From their own website:

Enviromentally Friendly

Burton 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.

TRUTH
Salt Lake City, UT

lol.....I guess burton lumber needs an accountant before it goes and spends another buck! Right Danno!

Baron Scarpia
Logan, UT

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.

soevolve
Boulder , CO

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

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