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Investing in Your Future:
With Current Arizona Policy,
a Solar Panel is a Good Investment
Dean Howard Smith and Gary Tallman*
Working Paper Series—05-16 | October 2005
Introduction
Policy Benefits
Producing, Using and Selling Electricity
Expanding the Analysis
Environmental Implications
Sensitivity Analysis
Final Notes
Introduction
Arizonans are poised to reap the benefits of new technology in
the production of electricity. This production will occur at the household
level harvesting one of the state’s vast resources: solar energy. Changes
in the federal energy policy and the state’s Environmental Portfolio
Standard are likely to result in a rapid growth in the use of solar panels
within the state.
This paper shows the economic decision process for an individual
household’s evaluation of an investment in a solar Photovoltaic (PV)
system. For exemplar purposes a simple PV system for a grid-connected
(connected to a commercial electricity supply system) house will be
used. The various assumptions and decision processes are then developed.
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