Want Solar? Move Now!

One of my favorite PF Bloggers, BostonGal, recently unveiled her large purchase for 2008: solar panels for her house. I was pleased to read about her choice. One reason I enjoy her blog is that she tends to take the long view, and by long, I mean looonnnngggg, as in 30 years long. A lot of people commented that solar panels was a frivolous purchase, which surprised me, because solar panels cut energy costs for years and years. For someone like BostonGal, who consistently tries to cut her fixed expenses, a purchase that will pay off in 10 years and lower her cost of living then, if not now, makes perfect sense.

Anyway, in another display of utter senselessness, Congress has passed an energy bill that is unfavorable to solar energy. With energy independence in the forefront of so many people's minds, this kind of choice makes me shake my head and hold up my hands in disbelief. I tend not to talk politics in this blog -- it is about personal finance, after all -- but it does frustrate me to see bills that make energy improvements more difficult for homeowners. Last but not least, I invested in solar power, and after the bill's announcement I was puzzled to see one of my solar stocks (SunPower) plunge by about 30% (the other one, ironically, was less favorable according to the finance experts and it continues to hold steady gains). I knew SunPower had a high price to earnings ratio, and I hesitated because of this (SunPower's P/E ratio is 477; Evergreen Solar's P/E ratio was about 12 when I purchased it, although it is currently unavailable), but the herd mentality took over eventually and I bought a small amount of SPWR stock.

So, if you look at the article, you see that subsidies for solar power will expire in 2008, so BostonGal is ahead of the curve yet again. I just wish we had started watching our finances earlier; if we had, we could be installing our panels right now, too! All I can do is watch and hope that Congress, with the pressure of an election coming, acts to extend subsidies to solar. (Some people think the drawing back of solar subsidies is a good thing; see BostonGal's post on that here.)

Energy Bill Troubles Solar Industry
NEW YORK -The omission of renewed investment tax credits for solar energy in the wide-sweeping energy bill signed by President Bush late last month has put the future health of the U.S. solar power industry in question.

The bill includes more stringent mandates for fuel economy and energy efficiency, but it doesn't extend the investment tax credit for companies specializing in solar power systems. That credit, which amounts to 30 percent of the value of qualified residential or commercial solar equipment, is set to revert to 10 percent at the end of 2008 unless it is extended.