Solar Nj

[Occo370]

I live in Nj. I had a solar company out today. I have a fair sized ranch and estimate about $100 per month for the electric bill. The solar company said I needed 40 panels and I would have to pay $27000. I expected about 15k out of pocket. But 27k. It would take 6 years to pay back. Seems a little steep to me. Anyone have any other info or options for me? Thanks

 

[SolarAndWood]

How did they figure the payback? $27K out of pocket pays back in 6 years when it only replaced at best $7200 in electricity? $8K in tax credit and $12K in incentives?

 

[Occo370]

Approx 3800 a year in srecs. 1400 a year electric bill. Savings. That's roughly 5200 a year. Times 6 years. 8100 kw per year

 

[SolarAndWood]

Interesting model. I wonder how in any given month you can have a such a big range in that market? Maybe the utilities get to buy from themselves first? With 3/4 of your production going to that market, it seems you are exposed to some risk. Also seems that your payback is better by replacing what you consume rather than get at most .07/kWh on that market. I assume your rates are somewhere in the mid teens and also that you would have to pay income tax on the srec proceeds?

 

[Occo370]

The rep came out and made it sound so good. But I have to front the 27k. I can't justify that even tho it pays itself off in 5-6 years. What do u think

 

[SolarAndWood]

Sounds like you hold all the risk. Why not do a 2kw system so that you get the full retail rate, i.e. what you would have to pay for it, instead of the lower srec rate?

 

[Occo370]

Excuse my ignorance. What is the difference

 

[SolarAndWood]

If you use the energy you produce, it simply comes off the bill. If you produce more than you consume, you have to take the srec to the market where you aren't certain what you are going to get for it or for that matter if the market will even exist. It seems that you are highly exposed to this market for the vast majority of your payback. Don't take my word for it though, I just learned about srecs less than an hour ago ;-)

 

[Occo370]

U said 2 kw system?

 

[begreen]

Is the $27K before or after the Federal Tax Credit of 30%?

(Note, you don't have to go for 40 panels, that might just be the maximum. Check NJ solar incentives. IIRC they were pretty good.)

 

[mbcijim]

Current install prices for residential systems are $4.00-$4.50/watt. With some work you should get them down to the lower number.

$27,000 and 8,100 watts/year 40 panels (210-280W), I am really curious to what size your system is?

NJ SREC prices were $600 heading fast to $400.

For the rest of 2011 you can depreciate the whole system if you're a company. If I was building a system at my home my business would own it and get the depreciation. Plus you get to write of 50% of the ITC too. What a world.

 

[SolarAndWood]

It doesn't look like they have incentives for solar? They just turn your meter backwards, give you credits based in months you produce more than you consume and issue you srecs on everything you produce:

http://www.njcleanenergy.com/renewable-energy/project-activity-reports/srec-pricing/srec-pricing

 

[begreen]

There are a lot of programs in NJ. Your solar installer should be able to provide you with a list. Also notable are very cheap 2% loans in NJ for a system that will provide a much higher ROI. Can you find a CD with these returns?

http://www.dsireusa.org/incentives/index.cfm?getRE=1?re=undefined&ee=1&spv=0&st=0&srp=1&state=NJ

There is also an incentive program for the purchase in NJ. It pays out 50 cents/kw capped at 7.5KW – with a maximum payment amount of $3,750.

 

[Occo370]

Besides srecs. I don't see any other incentives or special financing options for residential

 

[SolarAndWood]

Besides srecs. I don't see any other incentives or special financing options for residential

That is what it looked like to me as well and why my take is that you hold all the risk for everything other than the piece that reduces your utility bill. Worst case is an ugly one: srec market disappears the day after you write the $27K check and the system doesn't pay for itself before it needs to be replaced. Highly unlikely but who knows.

 

[DiscoInferno]

Are there any lease options up that way? I did not feel like becoming an expert on all this stuff, so we're going with a leased system. We pay $7000 up front (and nothing afterwards, although there are other options) for 20 years' use of a 5.67kW system, and all paperwork, maintenance, and monitoring is the responsibility of the company. (SolarCity) They also guarantee output. They get all the tax breaks and credits, and I get a much lower install price and no hassles. I think our payback window is 7-8 years, depending on electric prices of course. (Would be better if we had a southern exposure.)