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What is the financial feasibility of solar in Washington?

16/4/2018

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Solar feasibility in Washington

Location

The state Washington is located in  the Pacific Northwestern region of the country.  Let us find  the feasibility of the residential solar in the state. My solar power system will be feasible if it offers more than or equal to 2.9% (20 years bond yield) return per year otherwise it is not feasible.
​38.9° North 77° West

Solar Radiation

The state receives the average solar radiations of ​4.57 KW-hr/m²/day
solar radiations in washington

System cost and electricity rate

  • The cost of 5 KW residential solar system is $ 14750
  • The cost of electricity in the state is 9.51 cents per unit. It is quite low as compared to the electricity cost per unit in Arizona. Well, the escalation rate of electricity per year is 3.36%. 
  • If I extrapolate the above findings in the form of graph or chart, the cost of electricity will become 21 cents per unit in the 25th year. Please see the chart below:
electricity rate in washington

Let's see the financial feasibility in the state

  • The actual cost of the 5 KW solar system is $ 14750
  • The return offered by the system is -0.8% per year with NO payback period
  • The system is Not Feasible
  • It is only feasible after 30% tax credit by the state, reducing the cost of the system to $10325 for the 5 KW residential solar power system, offering you the return at par with the 20 years bond yield.

Conclusion

The main reasons for the non feasibility of the residential solar power system before tax credit with respect to the grid electricity in the state are
  • The low cost of the grid electricity and
  • Relatively less solar radiations with respect to the other states in the country.
But this doesn't mean that it will not be feasible in near future. Any further escalation electricity prices, reduction in the solar prices or any development in the solar technology will improve it's efficiency and will make the system effective, efficient and feasible even before the tax credit offered by the government.

Related Articles:

How to know the profitability of your system?
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