1. Why is it important for Standard Renewable Energy to allow Miggins flexibility in pricing?

Pricing on most items isn’t all that mysterious. Fast food lunch:

$5.37. Hamburger: $2.49; fries: $1.89; drink: $.99. Those prices pretty much break down into operating expenses, food cost, and profit. It is what it is. When it comes to pricing an alternative energy system for your home, it’s a different story.

The first thing you have to understand is what you’re buying.

First, you pay for the materials and labor, and you can count on a 20 percent mark-up for the company’s profit and operations. Next comes the idea of watts, the electric company’s unit of measure for how much electricity you use. Then there are the intangibles.

When pricing an energy-saving system like wind or solar, you have to look at your initial investment and what you can expect to save when the electric bill comes. If you are really good about limiting your energy use, you may be able to sell some of your extra power back to the “grid.” But what if it takes ten years to pay off the home improvement loan you took out to finance the system? What will the interest be? Is that adjusted for inflation? Is the cost of electricity always going to go up, or will it stabilize or even go down in two years? What are the maintenance and repair costs? Get through all these questions and you’re still faced with the choice of wind or solar. Wind is cheaper to start, but less predictable on the return on investment—solar is the opposite.