Tag Archives: solar energy

Solar System Investment – Mark Moore

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Renewable energy projects need to be carefully researched and analyzed in order to interest any potential investors. Investors need to know how much energy the renewable source has the potential to generate and how the calculations were derived. Solar energy is infinite, so the risk of running out of this resource is essentially nil. The maintenance of a solar energy system is  less than that of other renewables, and considerably less than that of fossil fuel energy. The lifespan of solar panels are on average 30-40 years, and most warranties of solar panels cover an average of 25 years. Investing in solar energy is also very beneficial to the environment. The investment in solar will expand any investor’s portfolio to show environmental awareness, and reduction in their carbon footprint. The solar energy system will also qualify for Solar Renewable Energy Credits (SREC), which earn income through their sale to electrical suppliers in the grid. A federal tax credit of 30% for the system is another important deduction in capital cost. Solar’s extensive lifetime of producing energy make it an attractive investment option for any investor, considering demand for energy and government energy policy.

 

The potential for financial success is present for investing in solar energy. The federal tax credit reduces the upfront investment by 30% and the IRS allows for accelerated  depreciation over a 6 year span. Of course, the most important financial concern to an investor is return on investment (ROI). The US T-Bill has a yield of 2.98% for a 30 year investment. The S&P 500 has an average return of approximately 10%. There are many risks involved with any investment, but the risk analysis for energy demand has a low beta. The internal rate of return (IRR) is a good metric to determine the rate of growth a project is expected to generate. The weighted average cost of capital (WACC) is another analysis to show how capital structure is used, which will help make the decision to invest. The net present value (NPV) is possibly the best financial analysis to determine the value and profitability of an investment. NPV gives results based on cash flows discounted at WACC and proves whether a project is financially worthwhile.

 

According to the National Renewable Energy Laboratory (NREL), the long-term decline in installed PV system prices is clearly the result of reductions in both module and non-module costs, and module costs have declined at a faster pace, especially over the past several years. In addition, the NREL states that analysts project that PV price trends will remain in their downward trajectory in the near term (NREL, 2012). Technology is reducing the cost of capital for solar investment and the government has incentives in place to reduce upfront costs. The investment in a solar renewable energy system is a good, sound investment decision.

 

National Renewable Energy Laboratory (NREL). (2012). Photovoltaic (PV) Pricing Trends:       Historical, Recent, and Near-Term Projections. Retrieved October 13, 2014,

from http://nrel.gov/docs/fyosti/56776.pdf.

 

Lesson 2: Searching For Niche- Loyd

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The technological advancements in renewable energies have made alternate energy solutions more feasible and affordable than ever before; nonetheless, there still remains to be one obstacle hindering the expansion which is the amount of support from the government and financial institutions. Nuclear energy, on the hand, has been considerably backed from political and financial institutions despite the potential environmental damages and accidents. There seems to be strong evidence why nuclear energy is well supported by the financial community and the government compared to the potentials that remain in the renewable industry. First and foremost, nuclear energy is highly efficient by producing large amounts of energy over a short time period with a small amount of uranium. Renewable energy, on the other hand, must harvest the energy over extended periods of time to meet small energy demands. Next, nuclear energy is very dependable for there are no interruptions in the power supply as with other renewable resources such as solar or wind. It is also becoming more reputable due to the stringent environmental regulations and technological advances. Furthermore, nuclear plants appear to favor clean energy policies as they produce little to no greenhouse gases. Consequently, politicians and financial organizations can invest securely in nuclear energy. In my opinion, renewable energy projects are failing to receive the same degree of support because they are rather high risk ventures. Indeed, nuclear energy has proven to have catastrophic failures; however, it is an established technology that is proven to be financially successful. The politicians get commended by carrying out the “clean energy” policies, while the financial institutions that invested in an established industry count their rates of return. Overall, it seems that nuclear energy has a higher success rate than most renewable energy projects at the present time. The technology and power can be continuously relied upon and the financial investments are proven to be cost-effective compared to some renewable energy projects.  From an economic standpoint, it does not surprise me that the government and the financial community wants more bang for their buck.

The niche opportunities that I see for global development of renewable resources include expanding renewable energy education, solar energy, and biofuels in developing countries. The report on renewable energy in Mali was very inspirational, for I can access potential weaknesses and recognize how the public’s commitment reflects the success of operations. The public’s response to renewable energy was surprising for the lack of information lead them to mistrust and reject sustainable development. I also had the opportunity to see how renewable resources effect the local economy in a positive and negative perspective. The people need alternate income opportunities prior to making the transition to renewable resources in order to reduce poverty. Perhaps, educating the residents about renewable energies and creating renewable jobs would be an alternative. Unmistakably, the people will not support an industry that will replace his/her job (such as the firewood or kerosene business).  Generally, there is a great deal of factors that must be overcame; however, there remains a strong incentive to invest sustainable in developing countries.

Click to access NUC3.pdf

Click to access RE%20Mali%20exec%20summary%20final.pdf

http://www.conserve-energy-future.com/Advantages_NuclearEnergy.php

 

 

 

Hello from Kayla Kal !

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Hello class, my name is Kayla Kalinoski. I am from Scranton, PA (home of “The Office”) I currently reside in State College, PA. I spent my two first years of college attending Penn State’s University Park campus, pretty undecided about my degree choice. Last fall, I found Energy and Sustainability offered through Penn State World Campus and fell in love with learning. I am particularly interested in studying solar energy. This past summer I attended Energy Path 2014 in Reading, PA. It consisted of five days worth of classes and a conference. It was a wonderful experience to be among professionals and students alike. I gained a lot of knowledge I hope I can share with others this year. I am also really looking forward to gaining insight from my peers, especially those who are already thriving within the field of renewable energies.

This past summer, I also began working on an internship at Penn State. It was an entrepreneurial endeavor involving selling smoothies from a student-designed solar powered smoothie cart. I did not get to work on the project for long due to a family emergency, but I did admire the project as a whole. The cart operated on busy streets in downtown State College and was mainly used to raise awareness about solar energy and that it is a feasible source of energy. I got to speak to many onlookers and educate them on solar energy. It was also a good day whenever our business would make a profit, sadly that didn’t occur often. If all businesses switched to renewable energies rather than relying mainly on electricity, it would be great!

Searching for the Entrepreneurial Niche – MSWALE

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I believe this has to do with nuclear being a complex subject, in many ways nuclear is talked about more often due to the health and safety concerns people have with them. Because of this I believe this renewable resource gets more public attention but nonetheless it does not change the fact that this is a renewable energy with little to no pollution and is very efficient. Which is why I think it has more support from the financial community and the government. They believe nuclear is the way to go to provide environmentally friendly, greener energy and know there are risks involved with this type of energy so they still implement stricter regulations for nuclear plants to follow. This isn’t really the case with solar, geothermal, or hydro so often they are less talked about. Solar for example has improved over the years and has gained some attention in recent years but still holds a small share of producing electricity. I believe solar has not been able to gain much support for a couple of reasons, the first being the lifespan of them. The lifespan is expected to be around 30-40 years, however the efficiency of the solar panel goes down a certain percentage each year, so even though their total life is 30-40 years they may be 90% efficient in the first couple years but closer to 30 years may only be 30-40% efficient. This also depends on what type of material the solar panel is made of for example, monocrystalline will be more efficient and last longer than a thin-film solar panel. The second reason is the price of solar panels, they are still fairly expensive to get and install. However, there is government and state incentives for getting solar panels on residential and commercial building and some areas can even get paid by utility companies for have a renewable energy. Overall, I believe nuclear gets more attention than other renewable resources because of how much they can generate, nuclear plants can take over the production of a coal or natural gas plant and be more efficient and cleaner. When we talk about solar or geothermal, often times they are referred to for residential use (single system for one home, versus nuclear can cover 100’s of homes).

Getting to Know Liston Jackson

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Hello class,

My name is Liston and like many of you, I’m an ESP student. This will be my sixth semester at World Campus, and while I still have about a year to go, I’ve been steadily making progress. I am originally from northern Virginia (the D.C. suburbs) and I’m currently serving active duty U.S. Coast Guard and stationed in Chicago. I am still in the process of figuring out what career I will pursue. As I’ve taken courses in the ESP program I know I want to work in the renewable energy field. I am just not sure exactly what form that will take. Will it be working on energy policy, energy finance, sales, consulting, etc? I hope this course will help me better understand sustainability entrepreneurship and the types of careers available.

I have never started a business. In fact, aside from a few summer jobs in high school, most of my adult working life has been spent in the military and not in private business. I have been trying to learn more about solar energy and ways to make it more practical and profitable to increase solar energy use. Companies like SolarCity, which pays all upfront installation costs, are coming up with unique ways to increase their business and I’d like to learn more about how they are accomplishing it.

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