Solar Panel Case Analysis

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We evaluated our three options by considering depreciation over 20 years, taxable income, income taxes, and after tax cash flow. Determining a before tax cash flow was incredibly difficult, therefore we used the cost of each option for 42 homes.

Solar Panels After calculating that 20 solar panels were needed on a home on Chaparral Drive we were able to find the cost for 42 homes. We used the MACRS Depreciation chart for personal property for 20 years, because that is average lifespan of a solar panel. After, we were able to find our taxable income based off the cost of the solar panel. After calculating our taxable income, we were able to find how much the solar panel would be taxed based on a corporate income tax rate. Finally, this …show more content…

It is evident that a wind turbine is the not most efficient renewable energy source to power a home. But, over 20 years the cost of the wind turbine would increase. This would also be a very large investment that may not be the most economically viable. Similar to solar panels, it would be beneficial towards the environment, but may not be an appealing factor of a home. Although they do have a much larger after tax cash flow, they are also a much larger, and impractical investment.

Do Nothing (Electricity Cost) Lastly, we compared the after tax flow the Do Nothing option. By evaluate the present cost of electricity of 42 homes, we used the Depreciation rate over 20 years to compare it to the other two options. After finding our taxable income, and income taxes, we were able to find the after tax cash flow. Similar to solar panels, and wind turbines, the do nothing option shows that electricity will increase over 20 years. But, unlike the renewable energy options, there is solely one benefit which is that it is the cheapest and most economically viable option. Unfortunately, it is not the most environmentally friendly option. In addition, as humans learn more about the planet, and how it is being affected by certain things, they are most likely to change their habits in order to save their home. Therefore, although this is the cheapest option, with global warming taking place, more people will turn to renewable energy sources. If a client

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