Microgrid’s Lopata New Featured Columnist with STLtoday

Considering tax law provisions for 2011, is this a good time to install a solar energy system?

Missouri sunshine combined with a package of federal, state and utility incentives makes this a terrific time to install solar. It’s also a good time to take a look at a business’ overall energy performance.

The 2010 tax-cut extension bill allows for faster depreciation and a higher, earlier after-tax cash flow for a new solar energy system.

At the state and utility levels, rules enacting Proposition C, which Missouri voters overwhelming approved two years ago, are scheduled to go into effect this month. The proposition requiring utilities to get some of their energy from renewable sources further improves the business case for solar and keeps Missouri revenue in Missouri.

An investment in solar for profitable businesses with good credit can deliver positive cash flow every year, shorten the payback period, increase net operating income and produce a double-digit internal rate of return. Combine solar, other renewables and energy efficiency into a corporate energy strategy, and a company can have tools to help manage risk and improve financial performance.

Ameren Missouri rates rose more than 20 percent last year and will continue to go up. No longer is the cost of energy incidental to a company’s profit and loss.

Small firms to the St. Louis Cardinals — who will build a small solar array this year at Busch Stadium — realize that delaying installation of solar usually results in lower returns because of the time value of money. Plus, over time, incentives for solar will be reduced as installed capacity grows.

In addition to the financial aspect, there also are environmental benefits through reduction of carbon emissions.

Even though it is cold on the roof now, planning and scheduling a solar installation right away will make sure the system is installed this year before the federal tax laws change again for 2012.

Reposted from stltoday.com