The number one question about solar is an obvious one: How much does it cost? While the answer to this is relatively complex because it truly does depend on several factors unique to individual homes, there are consistent incentives that will reduce the cost of the system.
In Massachusetts, the payback on many home solar installations is around 4 or 5 years. This is a result of many rebates available as well as the sale of SRECs (Solar Renewable Energy Credits).
To make the incentives a bit more manageable, here is an example of what a 5kw (average home system size) solar array would cost in Massachusetts.
Before rebates the system would cost around $25,000.
In Massachusetts, as well as the rest of the country, every home solar installation is eligible for the 30% federal tax credit. If you are not able to realize the full amount of the tax credit within the first year it will roll over into following years.
With the $7,500 tax credit realized in the first year the system would cost $17,500.
Massachusetts also has the Commonwealth II Solar Rebate Program which is available in most Massachusetts locations. This rebate is received within about 3 months of the installation. The base rebate value is $0.40 per watt and then an additional $0.40 per watt if your home value is under $300,000 or your annual household income is less than $95,000.
The base rebate for our 5kw system is $2000 and the additional moderate home value/income adder is $2000, bringing the cost down to $13,500.
SRECs are Solar Renewable Energy Credits that you would receive for every 1000 kilowatts of electricity produced. The owner of the system receives these SRECs and can sell them on the open market. Each year a 5kw system in MA would produce about 6,000 kwh, which would translate into 6 SRECs earned for the system within the first year. Currently SRECs are valued at $210, so within the first year the system cost would be down to $12,240.
A unique feature about the Massachusetts SREC market is it adjusts for oversupply at the beginning of each year, and therefore prices for SRECs are expected to increase within the next year. Historically prices have been above $500 per SREC. If the market does rebound to about that level the price of the system after the first year would be $10.500.
You would continue to receive SRECs for 10 years from the system installation. For more on SRECs, check out www.srectrade.com.
The final thing to factor in is the cost of electricity saved. With an average electricity price in MA of $0.15 per kwh, 6000 kwh produced in the first year would result in a savings of $900 resulting in a total expense after year one of $9,600 - $11,340.
As originally described, the actual costs and production capacity will vary due to many factors, and we will be able to give an accurate quote after a site visit. To schedule a free, no obligation quote click "here".
-William at All Energy Solar