In balmy Palm Springs, Calif., the desert sun shines an average of 350 days a year. So converting an auto dealership to solar energy might seem to be a no-brainer.
But Paul Thiel studied the economics of solar power for seven years before he took the leap and converted his Palm Springs Motors, a Ford-Lincoln store in Cathedral City, Calif. For a long time, he couldn't make the numbers work.
"We started studying it in 2005. The price of the solar system was too high," Thiel says. "It didn't justify to where you could make it pencil, where it would pay off in a reasonable amount of time. The payback would have been 10 to 12 years."
Waiting paid off in a big way for Thiel, 61, a South Dakota native who worked for Ford Motor Co. as a general field manager before buying his dealership in 2000. He estimates the system cost 60 percent less than it would have seven years ago because of a combination of factors: a $220,000 Southern California Edison rebate, a $600,000 federal energy tax credit and 50 percent bonus depreciation that reduces the dealership's tax bill.
The result: After the less than five years it takes Thiel to pay off the $2 million system, his Southern California Edison electric bill will mostly disappear. Thiel's average monthly electric bill is $15,000 but goes as high as $30,000 during summer, when the temperature sometimes soars above 120 degrees.
The system began operating in December after five months of construction.