Silver State Renewables, Inc. "agricultural hydroelectric economics" web page

A tax credit of $200. per KW is available for the period of October 3, 2008 to December 31, 2016 on hydroelectric systems.
A 5-year accelerated depreciation schedule can be applied to the cost of the hydroelectric system.

Table 1 represents the estimated final cost of a typical 10KW commercial hydroelectric system installed in Nevada.

Table 1	Estimated Value ($)
Typical Installed Cost of a Grid Tied, 115 KW Hydroelectric System	$280,000
Federal Income Tax Credit ($200. per KW)	-23,000
Total	$257,000

Table 2 represents the simple payback period given the expected output of the hydrolelectric system, on an annual basis, with a current electricity rate of $ .13 per KWH, and secondly the anticipated cost of electricity escalating at 8.5% per year for the foreseeable future (has been averaging 12% per year over the 2000-2005 time frame here in Elko, Nevada).

Table 2	Estimated Simple Payback (years)
200,000 KWH Per Year with no Escalation (assuming an overall efficiency of 85%)	9.9
200,000 KWH Per Year with 8.5% Per Year Escalation in Electricity Rates	7.0

Having said all this, your situation will be different. You may purchase a different size of hydroelectric turbine that significantly changes the system cost, install the system in a different local where either the water flow or head available is different, perhaps miss the federal tax credit window, be from another state entirely, be surprised to find that electricity rates have leveled off, fall into a different tax bracket, or any number of other variables. Each project should be evaluated on a case by case basis.

Please consider one last thing. Contrary to an economist's rather negative definition of the term "payback", a renewable energy advocate, much like yourself, sees the purchase of a system in a more positive light, more like an investment in the future. Upon start-up of the system you begin to see an immediate savings in your monthly expenses. After a few years the initial investment is paid off. Thereafter these savings go directly into your pocket. When your neighbor complains to you about their high utility bills, you of course just smile, and then tell them about your system.

So, if you believe as we do, now is the time to take action. Incentive programs are bound to vaporize or not be available to you when you need them the most. Furthermore, we believe electricity rates will follow crude oil prices, escalating at more than the 12% per year as they have over the 2000-2005 time frame here in Nevada.

Whatever you decide, know that Silver State Renewables, Inc. will be there to help you reach your goals. Call or email us, with your questions, or for a quote.

Where Can I Find More Information?

For accurate, up-to-date information on the incentive programs mentioned above, please contact the following organization:

Organizations	Phone	Email or Web Address
Database of all State and Federal Incentives for Renewable Energy		http://www.dsireusa.org

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