The project cost was $39,900 and the City receives a $1.50 per kwh rebate from the state for one year. It was financed using Energy Efficiency and Conservation Block Grant funds. If we were a private residence we would also be eligible for a 30% tax credit. This would put the project at an 11.5 year payback.
From a pure economic standpoint that payback period would make sense, but in order to get there these subsidies must exist. This begs the question, why subsidize solar or any other renewable energy projects and what other benefits come with renewable energy?
The freedom of never paying an electricity bill is one. The idea of being able to put electricity back on the grid would be amazing. Having a home that produces zero carbon and perhaps charges your car (electric vehicles are here!) would solidify your personal independence and bring value to the community. Check out the previous post on the military's investment in alternative energy if you don't believe me.
Distributed generation is also a strategic plus for our country. With power plants you have concentrated sources of energy that can be disrupted by a storm, mechanical failures, rolling blackouts, or terrorist attacks. Having multiple energy producers makes the grid more resilient which will be of even greater importance going forward.