DENVER (CBS4) – A 4 On Your Side investigation found it will take decades for taxpayers to get their investment back on a $40 million solar project at the Denver Federal Center.
The project created jobs and will be good for environment, but experts are shaking their heads over the projected payback period. The government’s own estimate is 48 years. Experts say that is an unbelievably long time for taxpayers to recover their costs on the large project.READ MORE: Trevor Woodruff Identified As Suspect In Deadly Shooting Outside Of Walgreens
The panels are mounted on the rooftops of several buildings and more than a dozen carports.
“I just think there’s something wrong,” Nick Perugini with Bella Energy said.
The recently finished solar energy project will provide 15 percent of electricity for the Denver Federal Center, but is it worth it?
“It caught me off guard when you first said it, it still catches me off guard. It’s outside the industry norm,” RJ Harrington Jr. with the Colorado Solar Energy Industries Association said.
The government spent $40 million on the project. While Uncle Sam is content to wait nearly half a century, the business world won’t go solar without a much quicker return on investment, according to Harrington.
“We typically see paybacks, especially for commercial projects that are up to 10 years,” Harrington said. “The average is 5 to 7 (years). So a 48-year payback on a project, I said to myself, ‘What’s wrong with this picture?’ ”
The government project doesn’t take advantage of generous subsidies, tax credits, solar incentives, nor utility rebates. But commercial projects can use all of those to look better than they are.
“If you take those incentives away from the private sector, their payback period is going to be 48 years as well,” Scott Conner with the General Services Administration said.READ MORE: Maize In The City, Colorado Family Tradition, Opens For A New Year
Perugini is the solar energy advisor to a new hotel near Denver International Airport. He says without any subsidies the project would pay off in about 20 years.
“Quite honestly businesses and homeowners would not be going solar with a 48 year payback, and the truth is they are,” Perugini said.
Solar makes economic sense for the Hampton Inn because costs are coming down, according to general manager Marcelo Birckenstaedt.
“A few years back no hotel would have considered solar panels anywhere,” he said. “Now we’re the second hotel in the area that has those.”
With solar becoming more cost competitive, experts say it’s hard to understand why the government would settle for a 48-year payback period.
“I don’t know if I’ll still be around in 48 years,” Perugini said.
One expert refused to believe the payback period could be as long as 48 years, so he double checked the government’s math and says a more accurate number for the project should be 29 years. But the feds are claiming 48 years.
Either way the payback for the Federal Center solar project is way beyond what’s acceptable in the commercial marketplace, and taxpayers are footing the bill.MORE NEWS: Colorado Task Force 1 No Longer On Alert Amid Intensifying Hurricane Sam
The $40 million project was paid for by federal stimulus funding.