Going Solar

The photovoltaic (PV) solar panels are going up on my roof this week, a 5KW system that we hope will offset most, if not all, of our electric use.  We're investing about the same amount of money that an average SUV would cost.  I say 'investing' because, unlike an SUV, the panels will give us a return on  our investment.  Current estimates are that the panels will pay for themselves in 5 to 7 years (I'll keep you posted on how accurate those estimates are).

Here's how it works:

Right off the top, we receive a rebate from Commonwealth Solar, a division of the State that awards rebates to projects like ours.  That rebate trims 11% off the cost.

A Federal tax credit is available to anyone installing residential solar.  The credit is 30% of the project cost (the Commonwealth Solar rebate is deducted from the cost before tax credits are applied).

Then there's the State tax credit, which is capped at $1000.  That's about 3 1/2 % of the project cost.

So far, we've recouped 40% of the total cost of the project in the first year.  Most SUVs would have depreciated by 20% in the first year.

Also, in the first year, we've reduced the amount of electricity that we purchase from the utility.  In addition to that, we've produced electricity from an alternative energy source, so we will be selling SRECs (Solar Renewable Energy Credits).  In the first year we're estimated to receive anywhere from $2000 - $3000 from selling SRECs.  So, the potential first year earnings of the system range from 10% - 15% of the project cost.

I looked up the cost of ownership of a Jeep Commander (fairly typical SUV): $3,000 in the first year.  This is fuel, insurance, and excise tax only.  PV system: +$3,000; SUV: -$3,000.  Made sense to me.

For anyone interested, here's a good place to start - the Commonwealth Solar site:  www.masscec.com/index.cfm/cdid/11235/pid/11161