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April 22 is Earth Day; a day about awareness and appreciation of our planet, its resources, and its environment. For the past 50 years, Earth Day has been celebrated by billions of people around the globe. In its early years, Earth Day was little celebrated and little noticed. Now, it is a worldwide event; a reminder to look at the way we live and to live sustainably. There are many ways in which we can become better stewards of the Earth. We can recycle hazardous materials; we can shop at markets and other stores that sell organic produce, natural groceries, and green products; we can support companies that defend (rather than destroy) habitats and clean up our communities. With this in mind I would like to introduce you to our guest blogger this month, Phil Covell of Vellco Solar. Phil will be sharing his thoughts on INVESTING WITH NATURE IN MIND.
In Celebration of Earth Day we are also co-hosting a Shred Event with Amy Lodes of Main Street Home Loans on April 23, 2022 from 10:00 am to 1:00 pm at SimplyBe Coffee in Leesburg (940A Edwards Ferry Rd NE). Shredding provided by ECHO, Empowering Individuals For Life. I hope you will bring your paper documents for shredding and join us for a cup of coffee.
We would like to thank Phil for sharing his insights with us this month as we celebrate Earth Day. This is our chance to act green: to plant a tree; to clean up the landscape; to protect habitat and species; to protect the environment; to conserve. I hope Earth Day inspires you to make a difference.
INVESTING WITH NATURE IN MIND by Phil Covell of Vellco Solar
The first Earth Day was held in April, 1970 to highlight the value of a healthy environment. Before then, there were no legal mechanisms to protect our environment (no EPA, no Clean Air Act, no Clean Water Act), and most of the world’s investments in food, fiber, and energy featured the unsustainable conversion of natural capital into cash. Now, more than 50 years later, we are learning better how to live and invest in harmony with nature.
There are myriad ways of living more naturally. Propser.com, for example, lists 21 ideas to save money while saving the environment (see the link under “resources”, below). There are also many investment funds with environmental, social, and governance criteria for investors who wish to value nature with their investment portfolios.
Beyond these opportunities, it is now more economical than ever before for homes and businesses to both invest directly in solar power, and enjoy the benefits with every sunrise. Compared to other jurisdictions, Virginia was late to the party, but in 2020 the General Assembly adopted measures which, combined with lower costs for solar and with federal incentives, make it much more attractive for homes and businesses to invest in solar. These measures include:
- Net metering, which requires utilities to value energy produced by their customers’ solar systems at the same rate that they buy power from the utility, and
- A renewable portfolio standard (RPS), which requires utilities to obtain more and more of the state’s energy from clean and renewable sources. Utilities in the state now regularly purchase Solar Renewable Energy Credits (SRECs) from people in the state who produce electricity with solar energy systems. These SRECs trade at market prices, and at the end of the day put cash in the pockets of homeowners and businesses powered by the sun.
Given the current costs of solar, the price of electricity, and the value of incentives, investments in solar can achieve stable, predictable financial returns of 6 to 10% for residential systems. Commercial returns for solar installations can be higher due to accelerated depreciation benefits.
This spring and summer may be the best opportunities to invest in solar. The federal investment tax credit applies to equipment placed in service during the year, and is scheduled to step down from 26% to 22% of the system cost in 2023. Many industry insiders expect that there will be a rush to order systems this fall for installation during 2022, potentially triggering year-end equipment shortages. After 2023, the investment Tax Credit is scheduled to ratchet down to 10% for commercial installations and 0% for residential installations.
- A retrospective on the first Earth Day from Walter Cronkite: https://www.youtube.com/watch?v=WbwC281uzUs&list=RDLVWbwC281uzUs
- 21 Ways to Save Money and the Environment: https://www.prosper.com/blog/ways-save-money-environment/
- Solar as an investment: https://www.solarreviews.com/blog/investing-in-solar-energy-what-return-can-you-get-on-your-solar-investment
- Solar Investment Tax Credit summary: https://www.seia.org/initiatives/solar-investment-tax-credit-itc
- Earth Day Extravaganza, Franklin Regional Park, 17501 Franklin Park Dr, Purcellville on Sat Apr 23 2022 at 10:00 am to 2:00 pm: see https://allevents.in/purcellville/earth-day-extravaganza/200022101473551
The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.