Albuquerque, with the 2014 population of 557,169, is the most populous city of New Mexico. It is the 32nd largest city in the U.S and is situated in the middle of New Mexico state. This city is featured in several movies of the Hollywood like the Little Miss Sunshine and A Million Ways to Die in the West.
New Mexico is a U.S state with the brightest and the most consistent sunlight. Albuquerque lies on the upper Northern borders of the Chihuahuan Desert. Other important geological features include the bright pink Sandia Mountains and wide spread of conifer forests. It is a semi-arid city where the annual precipitate is only half of the evaporation rates and none of the months go below the freezing point.
Albuquerque receives a generous 3,145 hours of sunshine each year. In other words, this city gets brilliant sunshine during 278 days of the year and extended cloudiness is rare in this region. The average temperature during most months of the year is 38 °C.
The location and climate of Albuquerque make it an ideal region for the generation of solar energy in New Mexico all around the year.
We are addicted to fossil fuel and our addiction is going to face a bitter demise sooner or later. The oil fields are running dry throughout the world and we are using more fossil fuel than we are finding new resources. Is a dark and cold world going to be our fate?
Things don’t need to go down this way! We have a source of energy right at our disposal that is virtually endless- the solar energy. Our Sun is like an energy production machine that has been fusing atoms and generating energy for millions of years. This process will continue for another million years so we are never going to run out this energy source.
The fossil fuel, undoubtedly, is a robust energy source and may seem inexpensive at the first glance. The solar power, on the other hand, may sound quite expensive when looking at factors like the prices of solar panels, installation cost, and so on. But there are two reasons why solar power is cheaper than the typical energy sources.
First, look at the broader picture here. The fossil fuel emits a lot of hazardous pollutants and biogases, which then not only cause illness like asthma, lung disease, and cancer but also damage the environment as a whole. This ‘collateral damage’ makes the fossil fuel based energy extremely expensive. A study conducted at the Harvard University pointed towards this bitter fact. According to that study, the coal power may be costing us as much as $90/MWh to $270/MWh, which is a lot more than we are paying directly. That’s not the case with solar energy which is a renewable and environmentally friendly energy source.
Second, the solar power is actually more inexpensive than you might think. When more companies invest into a product and increase its production and sales, the overall price of that product decreases. That’s known as the Swanson’s Effect. That’s indeed happening right now. With companies like Tesla and Space X investing into the solar power, the cost of solar cells is decreasing. In fact, the price of solar panels has drastically decreased by 67% from 2008 to 2012.
Installing a 5 kWh solar power system in your home is going to cost you as much as $20,000. This price may make you jump out of your chair right away. But, let us explain why it is not that bad of a deal.
There are various ways you can finance this process. You can either pay for it cash or loan or lease it. Also, if you are going to install a solar panel before 2020, the Federal Government will give you a tax credit of 30%. This credit amount will progressively decrease in the years to come.
The best thing about solar energy is that all the money you invest into a solar panel does not disappear in the thin air. Instead, think of it as an investment that you can reclaim if you decide to sell your house. In New Mexico, if you decide to sell a house with a 5 kWh solar panel installed, you can claim the $20,000 on the house’s equity without having to pay the extra property tax. This is known as the Renewable Energy Systems Property Tax Exemption.
Comparing the ROI for different options for buying solar panels, buying the solar panels outright with cash might sound like a good idea. That’s because, by the end of 25 years, you will see a total saving of $25,000 plus the payment for the unused electricity. The prospect of buying the solar panels cash sounds better than getting it on lease or loan.
However, using cash to buy a solar panel will set you back by a total payment of $10,000 in your first year of the purchase. In addition, the New Mexico does not have a solar panel rebate program. Taking into consideration these factors, the option of getting a loan to make the purchase is a better option. The option to lease the equipment will have a lower overall return on your investment but this carries a lesser risk.
A typical solar power panel in Albuquerque, New Mexico is going to cost you a total of $20,000. But taking into consideration the state and federal tax breaks and the value of electricity you generate, the overall cost will come down to $10,000 in the first year.
An average lifespan of the system is 25 years. It will pay for its price in the first 10 years meaning you have 15 years of free energy.
Plus, you can earn a little extra money by selling the leftover electricity.
Above all, the price of your establishment will increase substantially over the years.
You have to pay a considerable sum initially for buying and installing the solar panels.
Getting a solar panel via a lease option has its own set of pros and cons.
You may not be required to give any down payment. It means you are initially not giving anything out of your pocket.
Though slow but you start saving from the day one and you end up saving $136 in over a year. The way it works is that you are required to pay a monthly fee for the lease of a solar panel. Generally, the amount of lease you pay is lower than the cost of electricity bills. This way, you end up saving money. The lease continues for a period of 20 years.
If the system breaks down or gets faulty, you don’t have to pay for the repairs.
The biggest drawback of this method is that you don’t get federal or state tax breaks.
You cannot sell the surplus electricity from your unit.
Before going into the detail of the pros and cons of this method of getting solar panels, let’s first look at the pattern of return on this method of paying.
At first, you start off quite good and get a good return. But during the middle six-years, you actually get on the negative side of the bar and end up paying more than making any profit. Finally, during the last years of the panel’s life, the profits start rolling in again.
The explanation for this weird looking trend of profits is that the payments on the interest of home equity loans are tax deductible. However, the payments on the principle are not tax deductible. That’s why in the first few years, as you are mainly paying off the interest, the savings you make on your electricity bills usually make up for the difference and you end up being in a profit. However, when you start paying the principle payment, you actually have to pay more.
Overall, the return is quite good. Also, you get the ownership benefits. And you get the benefits of the state and federal tax breaks.
The return is not consistent and you have to face a lot of variations.
RPS is a state’s commitment to bring renewable energy sources to the system. This shows how committed a government is in helping its citizens decrease their reliance on fossil fuel and make a transition to greener energy resources. If a state has a higher RPS number, it means you get more incentives for financing your solar power project.
The RPS number for the state of New Mexico is among the top 10 states of the US. The state is aiming to get at least 30% of its energy requirements from renewables by 2020, with 20% of which coming from solar power. Also, the state of New Mexico allows you to sell the electricity back to the utility company. If you make less than $50 a month, your credit is rolled over to your next month’s bill and you’ll be paid if you make more than $50 per month.
The state of New Mexico is the second sunniest state of the U.S. In the parts of the Southern Valley, the amount of solar energy hitting the face of the earth exceeds an average of 6.5 kWh per day. This means that even if you have only 1 square meter of the solar roof, you will be able to generate quite a lot of energy.
Though the state is sparsely populated, it still ranks fourth on the total installed solar panels. The cost of electricity in New Mexico is not as high as in other states like California. Also, the state gives reasonable incentives encouraging people to install solar panels.
In addition to the obvious benefits of saving money, you get to generate your own electricity, which is free from the outside control.
Just in case the Sun does not decide to show up one day, you can save up additional electricity using batteries of water based energy storage systems.
If you are living in Albuquerque, New Mexico, it is a good idea to buy a solar power system. Factors like better RPS, better incentives, and ample sunlight make solar energy a lucrative option.
However, relatively cheap electricity, lack of rebates, and low payments on performance may make this energy method less attractive. But you can still sell the surplus electricity to the grid and earn a little extra.
To sum up, the residents of Albuquerque, New Mexico have an amazing opportunity to go for this renewable energy source. The final decision is utterly yours. You should calculate how much energy you use and how much you are expected to save if you were to invest into a solar power system.