Conclusion of a 3-part story
SHIRLEY -- MassCEC Renewable Energy Generation Program Director Elizabeth Kennedy said there would be two options for obtaining solar equipment: leasing, which 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 and at the next public information session.
Despite the upfront costs, said Kennedy, the financial benefits of buying are substantial. For purposes of illustration, Kennedy took the example of a 5 kW system, which she conservatively assumed to be needed for a 2,500-square-foot home. The costs for solar photovoltaic stand at around $6 per watt today, making this a $30,000 system. MassCEC and the town of Shirley 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 currently provides a basic rebate of $.75 per watt, or $3,750 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 available ($500). If one has an income of $75,810 or less as an individual, or $94,420 or less as a household, or a moderate home value of $400,000 or less, there is an
Federal and state tax credits
Many of the upfront costs, however, are refundable, due to federal and state tax credits. The federal credit of 30 percent would return $6,375 in the first example, or $4,950 in the second, and the state would return $1,000. 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. This is a summary of the fixed costs and incentives in the example given, but there are other additional variable incentives to consider.
One incentive is the Solar Renewable Energy Certificate. A 5 kW system generates five 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 photovoltaic systems and are creating solar energy.
The minimum price per SREC 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 five SRECs to sell would receive $1,425 every year for a 10-year period. The current maximum would be $2,750 every year for 10 years. Even at the minimum level, this variable benefit pays for the entire cost of the system purchased.
These incentives added together would more than cover the entire cost of the system, which would also generate a good portion of, all, or more electricity than the average homeowner needs.
With net metering, the utility company is required to buy all the excess electricity you generate and give you credit for it. This means that if you are overproducing in the summer, you can use those credits to pay when you are underproducing in the winter.
In a best-case scenario, someone who sells his or her SRECs at the highest price and who generates over $100 worth of electricity each month would likely receive $4,000 or more 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.
For a worst-case scenario, someone who sells his or her SRECs at the lowest price and gets $60 of electricity per month would reap about $2,000 or more 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.
The easiest financing option may be a home equity loan or line of credit,
The best way to get started, said Kennedy, is to invest in energy conservation beginning with a free energy audit by Mass Save, 866-527-7283. Energy efficiency can reduce the size of your solar installation, or you may decide that making your home or business more energy efficient is enough.
Shirley residents may also sign up for a free site assessment from the selected solar photovoltaic installer at www.solarizemass.com/index.cfm/page/Shirley-/pid/13036. "There is nothing binding at this point," said Kennedy. "After the installer is selected, we will do a Solar 201 to introduce the installer to the community, their equipment, proposed tiered pricing and more specifics."
For information on Solarize Shirley, contact Shirley Solar Coach Bryan Dumont at firstname.lastname@example.org, or 978-425-2726.