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Financial Incentives for Participating in the Solarize Mass Pilot Scituate's participation in the Solarize Mass pilot presents an economically viable way to install a solar PV system to generate your electricity. There will be two options: leasing, with involves no upfront costs and a lower electric bill; and buying, with upfront costs, but with a range of financial incentives. The leasing option will be explained in detail during site evaluations. One should be aware, however, that the financial benefits of buying are substantial, and a leasing program would not even be offered, if the company doing the leasing were not to enjoy the benefits of owning the system that he is leasing to the homeowner.
For purposes of illustration, we will take the example of a 5 kW system, which is what is conservatively assumed to be needed for a 2500 square foot home. Costs for solar pv stand at around $6 per watt today, making this a $30,000 system. The Clean Energy Center will select a solar integrator who provides group discount incentives, with the intent of bringing that cost to $5 a watt or $25,000.
The state provides a basic rebate of .75 per watt or $3750, in this example, bringing the cost to $21,250. This would be the upfront cost of the system, if one arranges to have the rebate directly payable to the solar integrator. For those who buy a major component from a Massachusetts manufacturer, an additional rebate of .10 per watt is availble ($500). If one has a moderate income ($75,810 or less as an individual, $94,420 or less as a household) OR a moderate home value ($400K or less), there is an additional .85 per watt rebate ($4250). Being eligible for all state rebates bring the upfront cost to $16,500.
A sizable portion of those upfront costs, however, are refundable, due to federal and state tax credits. The federal credit of 30% would return $6375 (in the first scenario) or $4950 (in the second) and the state would return $1000. This brings the final cost of the system, for the person only entitled to the basic rebate, to $13,875. For the person entitled to all rebates, the final cost is $10,550. While this is a summary of the fixed costs and incentives in the example given, there are variable incentives, as well.
One is the Solar Renewable Energy Certificate (SREC). A 5 kW system generates 5 SRECs. Utility companies in Massachusetts are required to create solar energy or pay a fine. An alternative is to buy certificates from those who have installed solar pv systems and are creating solar energy. The minimum price for these certificates is $285, and the current maximum is $550. The price is set at quarterly auctions and fluctuates according to SREC availability. At a very minimum, the person with 5 SRECs to sell will get $1425 every year for a ten year period. The current maximum would be $2750 every year for ten years. Even at the minimum level, this variable benefit pays for the entire cost of the system purchased.
The incentives described thus far have covered the entire cost of the system and then some, and that is without even looking at the reason one does this to begin with -- to generate electricity. The system you install will either generate a good part of the electricity you need, all that you need or more than you need. With Net Metering, the utility company is required to buy all the excess electricity you use and give you credit for it. So if you are overproducing in the summer, you can use those credits to pay when you are underproducing in the winter. Every year, the utility company will check the overall balance and if you have overproduced consistently, will pay you for the credits not used.
With regard to pay back periods, someone who sells their SRECs at the highest price, and who generates $100+ worth of electricity each month is looking at around $4000 of benefit per year. At a $10,550 total cost (for the person eligible for all three rebates), the payback may be around three years. Best case scenario. For a worst case scenario, someone who sells their SRECs at the lowest price and gets $60 of electricity per month is looking at about $2000+ of benefit per year. At a $13,875 total cost (for the person eligible only for the basic rebate), the payback period is around seven years.
Despite all the incentives, there is still the matter of the upfront costs. The easiest financing option at this time may well be a home equity loan or line of credit, both at historically low interest rates.
A final note: The best opportunities for saving money with regard to energy are in energy conservation. Call Mass Save at 866-527-7283 for a free energy audit. You may not even need your system to be a 5 kW one to begin with. You may be able to install something a lot smaller.
Solarize Mass – Solar 101: Make Scituate a Solar Town (Solar 102 to be held in Mid-June) Presented By Massachusetts Clean Energy Center (MassCEC) Monday, May 23rd, 2011 – 7:00 SHS Auditorium WHO IS MASS CEC?
WHY ARE WE HERE?
WHERE DOES OUR ELECTRICITY COME FROM?
ENERGY ISSUES IN NEW ENGLAND
HOW DOES IT WORK?
SOLAR PANELS ON HOUSES (RESIDENTIAL)
INCENTIVES
SOLAR RENEWABLE ENERGY CERTIFICATE (SRECs)
RESULTS FROM INCENTIVES
SOLARIZE MASS GOALS
Need Request For Proposal (RFP) for selection of integration in each community More installations = lower prices BASICS
ROLE OF INTEGRATOR
SOLARIZE STARTING LINE
FINANCING OPTIONS
Leasing/ Power Purchase Agreement (PPA) OWNERSHIP
OTHER COMMENTS:
Can remove panels if plan to do renovations on house or reshingling but it will cost extra so recommended to reshingle before (considered during initial assessment) Can do solar thermal project as well (just not part of pilot) Will consider building codes and wind during initial assessment Each host customer will pay integrator same price. However, based on the house structure, panels may cost more/less so customers may not be paying the same overall price. No battery backup – will shut self off until grid repowered (for safety purposes) Over all four communities 16 integrators are currently bidding (10 for Scituate). Pay $30,000 upfront, then $3750 for rebate, then get state and federal tax credit, then get SREC income over a 10 year period and will have savings for the next 20 years. People look to finance the $30,000 (average for rebate program) Usually produce 90% of current electricity used (on average) Utility will settle credits annually If sign up early, will not pay extra because less people are involved. You will find out the maximum cost and if more people join the program, the price will be decreased. 20% of roof can be shaded and still be efficient Optimally facing south (will determine feasibility during initial assessment) In house, need to get an inverter and two meters Need 100 squarefeet of roof per Kw. |
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Solarize Mass |