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PV economics

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  • Kevin Conlin
    Hi All, A customer raised a very interesting question today which I could not answer. He included the property tax savings in the payback for a PV system. I
    Message 1 of 4 , Aug 16, 2006
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      Hi All,  A customer raised a very interesting question today which I could not answer.  He included the property tax savings in the payback for a PV system.  I don’t think I’ve ever seen that number applied to the payback calculations.  His argument was that the PV increased the value of the home, but since it was exempt from property tax, that should be considered in the savings.  Maybe Andrew, Jim or John can tell me, do you include this number in the payback calculations?

      Anyone else with accounting skills can also chime in.

       

      Thanks,  Kevin

       

       

      ________________________

      Kevin Conlin
      Solarcraft, Inc.
      13130 Stafford Road, Suite 125
      Stafford ,TX 77477-4536
      (281)495-0438
      fax (281)495-0440
      kconlin@...
      www.solarcraft.net

       

       

    • deviant
      I think there is value there, but that you cannot gain from the lack of tax increase. (that d be like buying a fuel efficient vehicle and adding to its value
      Message 2 of 4 , Aug 16, 2006
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        I think there is value there, but that you cannot gain from the lack
        of tax increase. (that'd be like buying a fuel efficient vehicle and
        adding to its value how much you saved by not buying fuel for the
        jet you don't own) The gain would be counted upon sale of the
        property. i.e. If the property was sold for $10k more than without
        the system, then that $10k can be counted as salvage value at that
        time period in the future. (future value being discounted to today
        of course, turning that $10k to maybe $5k today depending on when
        the sale occurs and what inflation rate was used)



        --- In hreg@yahoogroups.com, "Kevin Conlin" <kconlin@...> wrote:
        >
        > Hi All, A customer raised a very interesting question today which
        I could
        > not answer. He included the property tax savings in the payback
        for a PV
        > system. I don't think I've ever seen that number applied to the
        payback
        > calculations. His argument was that the PV increased the value of
        the home,
        > but since it was exempt from property tax, that should be
        considered in the
        > savings. Maybe Andrew, Jim or John can tell me, do you include
        this number
        > in the payback calculations?
        >
        > Anyone else with accounting skills can also chime in.
        >
        >
        >
        > Thanks, Kevin
        >
        >
        >
        >
        >
        > ________________________
        >
        > Kevin Conlin
        > Solarcraft, Inc.
        > 13130 Stafford Road, Suite 125
        > Stafford, TX 77477-4536
        > (281)495-0438
        > fax (281)495-0440
        > kconlin@...
        > www.solarcraft.net <http://www.solarcraft.net/>
        >
      • Ariel Thomann
        I think it was 2 years ago that there was a booth at the Renewable Energy Roundup from a mortgage company in Houston (methinks) that was including solar
        Message 3 of 4 , Aug 17, 2006
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          I think it was 2 years ago that there was a booth at the Renewable Energy Roundup from a
          mortgage company in Houston (methinks) that was including solar installation costs in
          calculating mortgages. Don't ask me for details, but perhaps someone at TxSES can
          access the list of exhibitors, etc.

          Ariel
          - We are all Human beings here together. We have to help one another, since otherwise
          there is NO ONE who will help.
          - All countries need a NO REGRETS strategic energy policy. Think ahead 7 generations.
          ------------------------------------

          > I think there is value there, but that you cannot gain from the lack of tax increase.
          > (that'd be like buying a fuel efficient vehicle and adding to its value how much you
          > saved by not buying fuel for the jet you don't own) The gain would be counted upon
          > sale of the
          > property. i.e. If the property was sold for $10k more than without the system, then
          > that $10k can be counted as salvage value at that time period in the future. (future
          > value being discounted to today of course, turning that $10k to maybe $5k today
          > depending on when the sale occurs and what inflation rate was used)
          >
          >
          >
          > --- In hreg@yahoogroups.com, "Kevin Conlin" <kconlin@...> wrote:
          >>
          >> Hi All, A customer raised a very interesting question today which
          > I could
          >> not answer. He included the property tax savings in the payback
          > for a PV
          >> system. I don't think I've ever seen that number applied to the
          > payback
          >> calculations. His argument was that the PV increased the value of
          > the home,
          >> but since it was exempt from property tax, that should be
          > considered in the
          >> savings. Maybe Andrew, Jim or John can tell me, do you include
          > this number
          >> in the payback calculations?
          >>
          >> Anyone else with accounting skills can also chime in.
          >>
          >>
          >>
          >> Thanks, Kevin
          >>
          >>
          >>
          >>
          >>
          >> ________________________
          >>
          >> Kevin Conlin
          >> Solarcraft, Inc.
          >> 13130 Stafford Road, Suite 125
          >> Stafford, TX 77477-4536
          >> (281)495-0438
          >> fax (281)495-0440
          >> kconlin@...
          >> www.solarcraft.net <http://www.solarcraft.net/>
          >>
          >
          >
          >
          >
          >
          >
          >
          >
          > Yahoo! Groups Links
          >
          >
          >
          >
        • Andrew McCalla
          Kevin, If this helps the client rationalize the overall financial picture then I suppose it has validity for them. Fundamentally though, since there is often
          Message 4 of 4 , Aug 17, 2006
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            Kevin,

             

            If this helps the client rationalize the overall financial picture then I suppose it has validity for them. 

             

            Fundamentally though, since there is often very little correspondence, at least in the Austin market, between property tax valuations and market values, I think the calculation is flawed. 

             

            I’ve always found this property tax exemption, Texas ’ lone “incentive” for pv installations, to be damning with faint praise……one step forward and one step back, or a net-neutral benefit.

             

             

            Andrew H. McCalla

            NABCEP Certified Solar PV System Installer (TM)

             

            Meridian Energy Systems

            2300 S. Lamar, Ste. 107

            Austin, TX   78704

             

            Voice: (512) 448-0055

            Fax:    (512) 448-0045

            www.meridiansolar.com

             


            From: hreg@yahoogroups.com [mailto:hreg@yahoogroups.com] On Behalf Of Kevin Conlin
            Sent: Wednesday, August 16, 2006 2:27 PM
            To: hreg@yahoogroups.com
            Subject: [hreg] PV economics

             

            Hi All,  A customer raised a very interesting question today which I could not answer.  He included the property tax savings in the payback for a PV system.  I don’t think I’ve ever seen that number applied to the payback calculations.  His argument was that the PV increased the value of the home, but since it was exempt from property tax, that should be considered in the savings.  Maybe Andrew, Jim or John can tell me, do you include this number in the payback calculations?

            Anyone else with accounting skills can also chime in.

             

            Thanks,  Kevin

             

             

            ________________________

            Kevin Conlin
            Solarcraft, Inc.
            13130 Stafford Road, Suite 125
            Stafford , TX 77477-4536
            (281)495-0438
            fax (281)495-0440
            kconlin@...
            www.solarcraft.net

             

             

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