A comparison of the cost and financial returns for solar photovoltaic systems installed by businesses in different locations across the United States

Depending on what one reads, the cost of solar photovoltaic energy systems (solar PV systems) has already reached parity with grid produced electricity or, at the other extreme is far from parity. This leaves potential end users who are considering the installation of solar PV systems confused as to whether such an investment makes economic sense. These contrasting views are not surprising for several reasons. First, many analyses of the costs and financial returns of solar PV systems ignore important factors impacting the potential costs of such systems. Second, the factors impacting costs and financial returns such as levels of solar insolation, government and utility incentives, and the cost of grid produced electricity vary dramatically based on location. Finally, the cost of solar PV systems is declining rapidly over time. This study compares the costs and financial returns of solar PV systems installed by businesses, to grid produced electricity, in four specific locations across the US for 2012. The amounts are calculated after taking into account local solar insolation, and all available tax incentives and other available incentives and rebates. The results demonstrate that costs and financial returns of solar PV systems vary dramatically depending on the location where they are installed. The differences are primarily the result of variations in state incentives, electricity prices, and the level of solar insolation. This confirms that detailed, site specific, information about incentives, grid produced electricity rates, and levels of solar insolation is needed to determine whether the installation of a solar PV system makes economic sense in a particular location.(C) 2013 Elsevier Ltd. All rights reserved.