Is going solar in Middleboro Ma cost effective?
Middleboro Gas and Electric have great electricity rates. The average rate for electricity across the commonwealth is somewhere around $.18-23 Kw/Hr. Here in Middleboro our rate is around $.14 Kw/Hr. 30-50% lower than most of the state. Nice huh?!!
This does make solar somewhat less attractive here in Middleboro than is does when the rater is higher.
Here is a quick breakdown of how solar works in Middleboro MA
For the purpose of this comparison I will use a 9,700 Kw solar system that produces around 12,000 Kw/Hr's of energy annually. Your homes annual energy usage can be determined by looking at your electric bill and adding up the previous 12 months of energy usage. This is almost always shown on your bill and this is an average for a typical MA home. A solar system of this size would cost around $45,000 to install on your home.
#1 Federal Tax credit
The federal tax credit allows you to deduct 30% of the total cost of the solar installation and apply this to you taxes owed. This can be a little confusing but here is the skinny.
This is not a tax rebate!! 30% of the cost of the system can be applied as tax debt paid. If your annual tax liability is more than 30% of the cost of the system and you paid this in taxes, you will get all of this money back at the end of the year. Tax credit can be rolled over in a 2 year period.
For this example your reduction of federal tax liability would be 45,000 X .30 = $13,500 credited to your tax debt (see financial breakdown at the end) Consult a tax accountant for details of how this works.
#2 State tax credit
Massachusetts has capped this tax credit at $1,000, you would receive at State tax credit of $1,000. If you live in MA and work here this will be fully deductible in the first year. Who works in MA and doesn't pay $1,000 or more in state income tax? LOL
#3 Net Metering
You can connect you solar system to the grid and get net metering. What is net metering you may ask? That is when your solar generator produces more power then you are currently using in your home and the excess power goes back into the grid. You get credited for this energy and get to use it at a later time. The meter on your home is different than the normal meter and can read energy both forward and backward. In other words energy sent back into the grid turns your meter backwards. At the end of the month you only get charged for the energy you used, more than the power you produced.
Example: your solar system produced 900 KwHr's during the month and your home used 1020KwHr's during the month. Your bill would only be for 220KwHr's, no matter when you produced or use the power. Some months during the year you may actually produce more energy than you use. This will result in a surplus on your energy bill. They don't pay you for this but credit it to your account for future use. This typically happens during the late spring and early fall, when solar production is high but energy usage is low.
#4 SREC's can be sold on the market.
What are SREC's and how does this work? SREC's or solar renewable energy credits. SREC's are measured in 1,000Kw/Hr increments. If your system produces 12,000 Kw/Hr's of energy you receive 12 SREC's. SREC's are sold on the market to energy providers across the state. The SREC's generated from your system are eligible to be sold for a period of 10 years after your system is installed. The current years value of SREC's is around $285. A system producing 12 SREC's a this year would receive approximately $3,420 from selling the SREC's the first year. The value of your SREC's decline gradually over the 10 year period.
#5 Energy savings
A system that produces 12,000 Kw/Hr's annually would save a Middleboro resident about $1,680 in energy costs annually
Cost saving breakdown
Cost of system installed ($45,000)
Federal tax credit +$13,500
You get this federal tax credit
Massachusetts tax credit +
$1,000 You get this state tax credit
Costs after tax credits ($30,5000)
SREC income over 10 yr period.
+$27,368 You get this $ by selling the SREC's
cost of system after SREC's = ($3,132)
Energy savings over 10 yr
+$16,800 You save this much in energy costs( yr1-10) 10 year total savings of = $13,668
10-20 year energy saving +
$16,800 You save this much in energy costs (yr 11-20)
20 year savings of =$30,468
In this scenario the system would pay for itself in just over 6 years
20 Year savings of $30,468
20 year saving if energy costs do not increase from today's energy rate of $.14 Kw/Hr. It does also not account for increase in energy costs or reduction of system efficiency. These should at least balance out. System will loss about 1% of production annually and energy rates are likely to increase by 1% or more annually. Every home is different and the area of roof, orientation of the home, shading and roof slope all factor into the total energy a system will produce. This is estimated is prior to installation. This is completed with some tools and software that have been developed for this specific purpose and are very accurate. The system above is a best case scenario, with optimal conditions.
If you are interested in install solar on your home, call me for a free assessment and estimate.
Tom Pittsley
Synergy home Energy Solutions
508-524-4038
tom.pittsley@gmail.com
For more information about SREC's click on link below. We connect you to SREC trade and provide a full automated tracking and report system to ensure accurate accounting of energy produced.
http://www.srectrade.com/srec_markets/massachusetts
