by Gary Farha, President and CEO, CustomerFirst Renewables
CustomerFirst Renewables is a corporate partner of Second Nature
As more large electricity end users – including Higher Ed institutions – are considering securing dedicated large-scale renewable energy solutions, we are increasingly asked about the timing of when they should act. The question posed is whether purchasers should execute contracts prior to federal and state tax credits going away (which is currently slated to happen for solar and wind projects at year-end 2016 when the federal tax credit for solar goes from 30% to 10% and the “grandfathering” of the expired wind federal tax credit runs out) or whether they should wait – essentially gambling whether renewable energy costs will decline fast enough to offset the cost of diminished tax incentives.
This is akin to the question we grapple with whenever a new technology comes to market (e.g., personal computers, flat-screen televisions, smart phones). We know that prices will come down in the future at the same time that product benefits increase, which makes deciding on when to enter the market a tricky question. Particularly when, in the case of renewables, the size and term of contracts (millions of dollars, up to 25 years or more) are much more significant than buying the latest electronic gadget.Read more