[berettafan]

Friend was doing a cost analysis on a solar panel setup being proposed to a client. Solar guy provides lots of numbers showing why it's good. Friend starts digging in to it and doing his own analysis.

Here are some issues identified:

-Solar co. got what was more or less a 'good faith estimate' from a local bank on the financing. They asked the bank to show it as interest only. (right there the salesman is getting thrown out forcibly if he's at my home).

-Solar co. failed to show at what point the net $280k system cost (after initial tax credits which are huge) is actually paid back to the bank (remember they showed interest only....nice to know they are treating you like a Rent A Center customer looking at velour couches with cupholders).

-Marketable 'credits' are assumed over the life of the system based on generating capacity of system. Research showed the market for these credits to be utility companies who are currently req'd by law to either buy them or pay a penalty OR generate their own solar/wind power. Said laws lapse in about 5yrs.

-Public service commission licenses your system, once installed and inspected, for 15yrs (ie this is how long you may indulge in the credit sale market). This may have an impact on contracts you would enter into for sale of credits (ie if you find yourself looking for a contract to sell credits to a utility in 10yrs-assuming they are still buying-you may very well be accepting a discounted price based on the remaining yrs of certification).

Many of these issues and others will be better understood as time passes and the markets evolve. The main lesson here is in order to correctly evaluate the value of such a system you NEED to understand the laws and regulations that affect it. It is not a 'free market' that just any investment guru can predict through application of lessons learned in securities and other markets.