Page 174 - Sustainable Cities and Communities Design Handbook

150 Sustainable Cities and Communities Design Handbook

TABLE 8.1 Cost and Incentives Analysis
Hard and Soft Cost of Panel Installation
%of
Total Cost
Cost of photovoltaic panels $293,250 $ per watt: $1.96 46
Cost of ancillary electrical $57,375 $ per watt: $0.38 9
equipment
Cost of structures and installation $184,875 $ per watt: $1.23 29
Cost of engineering $12,750 $ per watt: $0.09 2
Cost of construction management $25,500 $ per watt: $0.17 4
Cost of general site work $6375 $ per watt: $0.04 1
Other costs (commissioning, $57,375 $ per watt: $0.38 9
performance guarantee, bonds,
fees, and permits, OH&P)
Total Hard D Soft Cost $637,500 $ per watt: $4.25 100
Incentives
Federal income tax benefit a
Present value of accelerated a
depreciation recognition
Total Incentives a
Effective Cost of Project Installation
Total Hard D Soft $637,500 $ per watt $4.25 100%
CostLIncentives

OH&P, overhead and profit.
a
As discussed in the next section, the main incentives are Federal income tax benefits and the
accelerated depreciation of solar equipment, which cannot be used by a nonprofit agency such as a
city. However, a city can take advantage of these incentives by partnering with a for-profit, third-
party developer.

Many states, local governments, and utilities offer solar PV incentives that
assist in increasing the financial feasibility of installing PV systems. These
incentives consist of upfront cash payments, property and sales tax reductions
or credits, and performance-based incentives. It is beyond the scope of this
article to delve into the myriad incentives available on a state-by-state basis. In
addition, incentives can change considerably over time. It is important for the
financial analyst to keep abreast of changes in existing and formation of new
incentives. Information on all state and federal incentive programs around the
country is available at the Database of State Incentives for Renewables and
Efficiency at http://www.dsireusa.org/.