Generous federal and state incentives combined with a steady decline in the cost of solar power are making solar energy an economically viable choice for powering the nation's warehouses and distribution centers, said an industry executive at the Warehousing Education and Research Council's annual meeting in Atlanta.

Thomas R. Hunton, president and CEO of American Capital Energy, an integrator of electric- and solar-powered systems, said companies that pay for systems out of pocket can expect to get a full return on their investment in four to six years after federal and state government subsidies are factored in. Companies that finance the transaction can expect an eight- to 12-year payback window.

Because solar systems generally have a 30- to 50-year design life, the energy savings over the decades can be significant. For example, a company buying a $7.9 million solar power system can recoup all of its investment by the fifth year due to reduced energy costs, Hunton said. Net energy savings over the next 20 years—savings minus ongoing cost—would approach $10 million, he added.

Hunton said the cost of developing and building solar systems has been falling, on average, 5 percent a year for decades. Solar investment is also aided by federal tax credits equal to 30 percent of the project's costs and subsidies in many states equivalent to one-fourth to one-half of the investment.