Solar Subsidies and Small Business

Solar Subsidies and Small Business

With all the publicity about the push for energy independence and “going green,” it is easy to assume that solar energy products practically sell themselves.  This may hold true on the West coast, or in states with added incentives to encourage solar investment, but not in our part of the country.

The misconceptions may stem in part from the 30% tax credit offered by the Federal government for investing in solar energy.  These rebates directly benefit the consumer.1 There are no rebates offered to those of us marketing solar energy products.   As a matter of fact, the company must pay excise tax on all solar energy equipment delivered from another state.  Most solar equipment is manufactured in California and the cost to ship products to the middle of the country remains high, not to mention the overhead required to operate a small business.  Add costs for marketing, insurance and labor and you can see how the costs can add up in a hurry.  In a global economy, even small business must keep their profit margins low in order to remain competitive.

Sun City Solar Energy has been in business since 1983, and the company is proud to be the most experienced and knowledgeable provider and installer of quality solar equipment in the area.  As such, Sun City Solar is contacted on a regular basis by individuals, architects, engineers, municipalities, electricians, plumbers and other professionals seeking information about the proper design, layout, equipment specifications, sizing and numerous other questions about solar energy.  Although we are happy to promote solar energy, giving this information to individuals, companies, agencies and design professionals for free does nothing to keep our doors open.

Small businesses new to solar have a very steep learning curve, especially if the owners believe they can take advantage of stimulus money available for renewable energy.  As taxpayers, we are grateful the government accepts only the lowest bid for the solar applications for local, state and federal government projects.  The bottom line is that only large companies able to buy equipment in bulk at discount prices will be able to win a low bid government project.  And there is no guarantee that because a company is large, the margin for error decreases.  Sun City has been able to capitalize on redesign and repair of systems installed by companies both large and small.

There are the programs funded by the ARRA (American Recovery and Reinvestment Act of 2009), which are publicized specifically to benefit small businesses.  These programs have fallen far short of their intentions.  Solar is a relatively new technology, and some of the government projects sent out to bid are not properly designed or do not specify correct equipment.  Small businesses that win a low bid further complicate the problem because they do not have the knowledge or experience to properly execute the project.  The end result is that a small business may win the battle, but lose the war.  In other words, the small business will win the bid and add revenue to their bottom line, but go out of business because they are not profitable. Also, a company that bids the job too low ends up substituting inferior products in an effort to keep the overall cost within the amount bid.  Often, this ends up being a lose / lose situation for small businesses and the government.  The government ends up getting an inferior product and the small business loses money because they are not familiar with the equipment and/or installation. The bid did not include all the system products or the business is unable to provide the extensive warranties required by the government.

A recent study ranking 160 countries according to their dedication to the promotion of environmental stewardship ranked the US 61st on the list.  As a whole, Americans are not willing to change their lifestyle for short or long term benefits.  Sun City Solar Energy has devoted many decades to promoting, encouraging and providing quality solar energy systems to improve the quality of life for our customers and future generations.  It has been a challenging, interesting and rewarding journey.  We encourage you to learn about the benefits of solar and become part of the solution for energy independence at SunCityEnergy.com.

“What’s the use of a fine house if you haven’t got a tolerable planet to put it on?”
– Henry David Thoreau

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