Solarize Mass: A Golden Opportunity to Buy Solar Energy for Your Home

The most common complaint about solar electric energy generation is that it’s too expensive. And, no doubt: solar has cost more than fossil fuel sources, if the external, environmental costs of conventional generation are neglected.

But, nowadays it’s a different story. Currently, the lowest-ever equipment and installation costs in conjunction with federal and state (MA) incentives provide a surprising result: a solar energy system on your home in Massachusetts will typically provide a simple payback on investment of 6 to 8 years.

Buying a solar system is similar to buying a car in that it's a technical purchase - one needs to spend time to understand the siting and to sort out the marketplace’s competition and variety.

Here’s where the Solarize Mass program comes in. For Sudbury, Wayland and Lincoln residents, Solarize Mass (overview) will provide technical assistance and assure cost competitiveness for the next four months. Solarize Mass will officially kick off later this week with an introductory meeting at the Lincoln-Sudbury auditorium. ().

The Solarize Mass program is organized by the Massachusetts Clean Energy Center. The program solicits pricing from qualified vendors in return for marketing assistance in advance of roll-out to the communities. It's an example of bulk purchasing: the more systems installed, the lower the cost of the systems.

For example, if a total of 100 kilowatts (kW) of solar systems were installed in the three communities, the installation price offered by the vendor might be $4.75 per watt; if 200 kW were installed, that price might be $4.50 per watt. (Note: these numbers are illustrations only). Lincoln, Sudbury and Wayland have joined as one group to increase the purchase volume. The primary benefit of Solarize Mass to homeowners is to provide a competitive price baseline and technical support (through local energy committees). The solar system installation contract (and required local permitting) is between the solar vendor and homeowner in the same manner as any home improvement project.

Here’s an example of an actual system, which will be installed in Sudbury later this week. The capacity of the system is 5.76 kW, or 5,760 watts. The expected annual energy production of the system is 5,925 kilowatt hours (kWh).

The installation cost of the system is $28,200, or $4.90 per Watt. The federal tax credit for residential solar systems is 30 percent, which is $8,460. The state of Massachusetts tax credit is $1,000. The Commonwealth Solar II incentive is $2,000. The net cost of the system is the first cost minus the incentives for $16,740. In this case, two trees were removed which cost $2,700. The total net cost is $19,440.

The annual, expected revenue for the system is the sum of the energy cost savings and the value of solar renewable energy certificates (SRECs). The annual energy cost savings per year (averaged) over the next 10 years is $920. (Note: the installer has guaranteed 95 percent of this revenue stream.)  The system will generate SRECs worth an expected average of $1,650 per year for the next 10 years. The combined annual revenue is $2,570 per year for the 10-year duration of the SREC program.

The simple payback on investment is 7.6 years: $19,440 divided by $2,570.

Moreover, the system's expected lifetime is 25 years, which is the solar panel and solar inverter manufacturers’ warranty periods. Assuming an annual 1 percent escalation rate for retail energy rates, a half percent reduction in annual output for the system, no SREC income after 10 years, and neglecting maintenance, the expected cumulative cash flow for the system over its lifetime is around $24,750. This system was ordered before Solarize Mass was available.

There are other alternatives for having a solar system on your property
other than buying it outright. Vendors offer leasing arrangements and power
purchase agreements. Given the level of incentives available, each of these
approaches will provide positive cash flow over the life of the system. Interested? Come this Thursday evening at 7 p.m. to the L-S auditorium, visit http://www.solarizelsw.com and get started.