(What follows is a very long, comprehensive post filled to the brim with everything I’ve learned about going solar. Our installation is now feeding green energy into the grid, I obsess about cloudy days, and I’m looking forward to our new investment paying us back in both money, and in knowing we’re contributing a great deal towards a green future. Cross-posted on my blog, Left in Lowell.)
The flurry of activity in and around my homestead during two days in the week of October 7th was very disturbing to my poor dogs, but exciting for us. After a journey of more than five years in researching and planning (more on that in a bit) the contractors we hired, NuWatt Energy Inc, were on our roof installing our 4.16kWh solar electric system. A system that, it is estimated, will be providing around 80% of our current electricity usage.
Why did it take us so long, and how did we finally decide on the path we did? The answer to that, I’m hoping, will give other people a shortcut to the knowledge we got the hard way, and give you several paths to solar for your own home or business if you think you’ve got the roof for it.
When we bought our home, it wasn’t for the solar-perfect south-facing second story roof. But it wasn’t hard to see that we’re situated well for panels. There are trees behind our home but they’re set back (because of a small road behind our house), and while in winter, a couple of large leafless trees back there will, with the low mid-winter sun, lightly shade the bottom of that roof at midday, we’d be getting the most out of those panels the rest of the year.
2008-09 – the Beginning of Our Journey
When the City of Lowell put on its Getting to Zero contest, which included a team of UMass Lowell engineering students coming to your home to do an evaluation, and a MassSave home assessment (which is free for anyone), I signed up. The concept was that homeowners would put together a plan for getting as close to a zero-carbon footprint as possible with $25,000 – and the winners (with two winners – one in a moderate-income category and one with no income restriction) would get those funds to do the work. We became finalists, but didn’t win. However, I will say, I became hugely educated on many fronts, and it was a worthy enterprise.
In our GTZ plan, we included an installation of solar panels. At the time, you could buy PV outright of course, but it was expensive (moreso in 2009 than now), and would have eaten up all of our $25,000 contest winnings, or more. But there was a new option in Massachusetts, a business model just imported to Mass that allowed you to get solar without much cost – called solar leasing. Again, things have changed somewhat since then, but I want to explain the incentives for going solar, which apply in all cases, so I can then better explain solar leasing and its pros and cons. Because ultimately, we decided not to lease, but to own. I think both paths are valid, but first you need to understand the numbers.
Money Money Money
There are a number of incentives lined up for purchasing solar in Massachusetts. I’ll go over each in detail.
• Federal tax credit
• Massachusetts state tax credit
• Massachusetts Commonwealth Solar II Rebate Program
• Solar Renewable Energy Certificates (SRECs)
Federal Tax Credit
First, the big one: the federal tax credit which pays for 30% of the total installation cost of the system. That’s for starters.
That’s money back from the taxes you paid in the calendar year you installed the panels. So, let’s say you paid $9000 in income and other federal taxes. When you go to do your tax return, and you installed a $17,000 solar panel system on your roof in that tax year, you’ll get 30% of that install cost back, out of the taxes you paid, as a refund. For that $17K system, that’s $5,100. So long as you paid more than $5,100 in federal taxes, you’ll get back that amount.
The only drawback here is that there is a ticking clock on the federal tax credits. They will be up on December 31, 2016, and would need to be renewed to keep this incentive in place. This is something to keep in mind if you are thinking of solar; if Congress fails to renew this program, then you lose out on a lot of money if you wait too long.
Mass Tax Credit
Then there is the Massachusetts Personal Income Tax Credit. This is a tax credit of 15% of the total cost, up to $1,000. Most installations will qualify for the full $1000 (we did).
Commonwealth Solar II Rebate
The third incentive is a straight-up, nearly immediate (less than 4-6 weeks after install) rebate under the Commonwealth Solar II rebate program. This is in addition to the state tax credit. (Yes, Massachusetts is generous to solar adopters!) The base incentive is $.40 a watt. The “Moderate Home Value or Moderate Income Adder” is another $.40/watt. Most residential home owners will qualify for this additional $.40. There’s another $.05/watt if you use components made in Mass. We did not qualify for that because our contractor used panels not made here; that incentive can be good but you might find a lower cost panel or a better panel not made in MA, so ask about this incentive but you or your installer might decide to skip the MA-based components incentive.
All told, we qualified for $.80/watt for the Commonwealth Solar II incentive. I’ll detail what that translates to in our rebate later on.
SRECs
There is one last really great incentive to understand: the Solar Renewable Energy Certificates (SRECs). After Governor Patrick, upon his first swearing in, signed the RGGI (Regional Greenhouse Gas Initiative), it entered Massachusetts into a regional cap and trade system. That system puts a cap on emissions, such that carbon-polluting utilities must purchase green credits (SRECs) to offset their polluting.
The cap is working. This year, the cap got lowered (for 2014) by 45% – between burgeoning renewable energy projects, more energy efficient buildings, the drop in natural gas prices (which means more plants using gas and less using oil and coal), and also the Great Recession, emissions overall were plummeting, and therefore the price of SRECs on the open market went down (with less demand for them). The lowering of the cap will sustain the SREC market and continue the downward pressure on carbon-producing utilities.
So what is an SREC? Basically, as a producer of green energy, my roof generates credits, which can then be sold on the open market to polluters. The company we used to install our panels uses a third-party bundler of credits, to which we have to report our production and they will help sell our credits (selling them yourself would be a pain). We get to sell these SRECs for the first ten years. It’s estimated (conservatively) we’ll be getting around $1000 or more per year for our SRECs (if current prices hold).
A Word on Technical Stuff Like Selling SRECs
Part of the reason that I’ve published this piece more than a month after our solar was installed was that installation is not the only end game. The install itself, as mentioned, took only a couple of days. Once installed, the work needs to be inspected by the city, and once you get your inspection approval, your contractor should be the one notifying your electric utility, who has to come and do the final hookup. I was pleasantly surprised that National Grid, which has a rather, er, slow reputation, had us hooked up to the grid in about two weeks.
Residential solar production in Massachusetts means net metering, which is to say, when you are producing more than you are consuming via your renewable source, the meter “runs backwards” and you gain credit from the utility. Then when you use more than you produce, you get that credit back. If you overproduce – let’s say, you go super-efficient in your electricity usage, installing LEDs and forgoing the use of ACs in the summer – my understanding is that you will not be getting a check from the utility company here in MA. And Even if the law in MA allowed you to get a check from the utility for overproducing, it’d be at the very low wholesale rate, not the retail rate.
Since most residential installations are limited by the available space, you’re not likely to run into a problem. Our (best) south-facing roof can only fit enough panels to cover 80% of our current usage, so we have some wiggle room for efficiencies we might want to deploy. But this is something to keep in mind when planning out your solar with your contractor.
As for SRECs, there are a few details to keep in mind. An SREC is created for every 1000 kWh (kilowatt hours) you produce, aka 1 megawatt hour. The SREC gets “minted” at the end of the quarter in which it’s produced – if our installation fails to produce 1000 kWh by end of December, which is likely, given the winter sun, we won’t mint our first SREC until the spring quarter. An SREC will then be available for sale in the next quarter after it’s been minted. So for us, we definitely won’t sell anything until spring, but more likely, our first SREC sale will be in the summer quarter.
SRECTrade.com, the outfit we’ll be selling our SRECs through, doesn’t just sell your SRECs at the quarterly auctions. They are looking for the best price (you make more money and so do they) and that often happens between auctions. For our size installation (under 50kW) the fees in total are 7% of the price of the SREC they sell for you.
They also have an option for people who want to try to play the market. You can set a “minimum price” for your SRECs, kind of like an Ebay auction (you pay the same fees). It’s not recommended generally, and the customer service rep I talked to mentioned that the studies they’ve been able to do (remember, this market is only a few years old) shows that on average, their managed SREC sales do slightly better than the average sales where a minimum was set. But if you think you can do better gambling, you can try it if you want.
If SRECs don’t sell, there is a last-chance auction (the Solar Credit Clearinghouse Auction or SCCA) at the end of the fiscal year (July). Massachusetts has been pretty aggressive in making sure there is at least a fall-back fair price for SRECs, including the Department of Energy Resources offering to buy any extras. To quote another SRECTrade blog post, “The [last-chance] auction was designed as a ‘price support mechanism’ for the Massachusetts SREC market, but it does not represent a ‘price floor,’ a common misperception.” Also, remember that past performance does not give you a guarantee for future prices in the SREC market.
If your SRECs don’t get sold, but go into the last-chance auction, they are reminted for another three years. For more on the markets in each of the states in which there is an SREC market, go here. There is a lot more information here about the Massachusetts SREC market.
To Lease? Or To Own?
Now that you’ve got an idea about the incentives available in Massachusetts, let’s talk leasing versus owning.
Solar leasing is a program whereby for little or no outlying cost to you, a company comes in, installs the solar panels, and you sign an agreement (usually 18-20 years) to buy your power (up to the amount expected to be generated by the panels, and any excess energy need would be supplied by your regular utility at their price) at a price negotiated at the time you sign the contract. The price per kWh is very competitive (or else why lease?) with modest increases built in, and what they tell you is that if electric prices do what they have always historically have done, your price over the 18-20 years will be significantly less than what your non-solar neighbors buying direct from the utility are paying.
There are pros and cons to leasing versus owning solar panels. I think both paths are valid ways to get green – your circumstances might better be served by one or the other.
Advantages to leasing:
One big advantage to leasing is that you are not expected to maintain the panels – the leasing company monitors the output. Since they guarantee you the power you’ll buy from them, they are incentivized to keep the panels in top working order. Otherwise they would have to supply you from the utility, which if things work the way they are expected, will cost more and lose them money.
This includes replacing the inverter should it fail during the leasing terms. The inverter is one component that isn’t expected to live as long as the panels, and can cost money to replace. The good news is (for owning) is that inverters are expected to cost less in 10-15 years.
With leasing, the upfront cost to you is pretty negligible. In effect, all you’re doing is swapping power companies and probably getting a better deal. When we first looked into solar leasing (in its infancy in MA) they wanted $2,000 from us up front to help offset the installation costs. The last quotes I got more recently for leasing were for $500 up front cost, or even zero cost. It depends on the current market for SRECs and other things, as to whether or not the solar leasing company can make enough money to front all the costs of buying and installing the panels. You should be able to find a zero-cost leasing company (and is one thing you should look out for when getting quotes – if someone wants a lot of up-front money on a solar lease, beware!).
When the lease timeframe is up (18-20 years is the norm) you can renew the lease with them, or buy out the remainder of the value of the panels outright and own them yourself. (Keep in mind solar panels do degrade over time, up to 1% a year generally.) Or, you can opt out entirely and they’ll remove the panels.
The lease is transferable if you sell your home. The new owners can take up the lease for the rest of the contract terms.
Cons to leasing:
You don’t own the panels, and you get none of the incentives – all the SRECs, tax rebates, etc go to the leasing company. If you do the math, you find out that you’ll make out ahead if you own the system (even making money on it!) but leasing means you don’t get any of that.
Some leasing companies might have additional incentives, like giving you the SREC money, but that is something you will have to check with leasing companies. It’s a great question to ask!
Advantages to owning
When we decided to own, it was the math on the incentives that did it for us. If we played our hand right, we could actually break even and start making money on the system within 4-5 years, including any interest on the loan we got. We got our loan with the bank with whom our contractor has a relationship. More details on our loan are further down the post.
Outright, after next year’s tax season and all our rebates and tax credits, we’ll have gotten back 55% of the cost of our panels (not including the loan closing costs, just the installation and component costs). I’ll go over the numbers later, but that is a pretty attractive incentive. On top of that, we’ll get 10 years of SRECs to sell (around $1000/year or more) and 80% of our power will be generated for us, leaving us with only 20% to pay National Grid for electricity. Less if we can do some home energy efficiencies like replacing all light bulbs with LEDs. (That’s the plan!)
So, leasing might save you a little bit in your utility costs over time, but you can fare much better monetarily by owning them.
The final advantage to owning is that your home will be worth more. If you sell your home while leasing your roof to a solar company, there might be some value there, but if you own the panels and they come with the house, that value is all yours. Our panels were estimated by our contractor to add $13,371 of value to our home.
Cons to Owning
Of course, there are cons to owning as well. The big one is the outlying costs. Our system was $17,264 and our loan total was $19,024 after closing costs. The ideal scenario would be to have 100% of your solar panel install cost in cash, of course, followed by having around half of your cost as a down payment – then you could get a loan for the rest, which means having to pay closing costs but then you’d pay off the entire loan as soon as you get all your rebates and tax refunds. If you have home equity, using that would give you the advantage of a lower interest on secured home equity loan.
But no matter way you slice it, and despite the much lower costs of panels these days, it’s a pretty large commitment.
Another con to owning is maintenance. You will be responsible for the panels (which are unlikely to need much maintenance but you never know) and for replacing the inverter that is likely to go within the lifetime of your panels. This can be a couple thousand, though as stated before, this component may be quite reduced in price by the time it’s a problem.
Other than the price and maintenance, though, there aren’t any other cons to owning that I can see (so far!!). Make sure the company you hire is reputable (there are many companies coming out of nowhere to take advantage of solar installations) and ask them if they will be doing much of the paperwork for the rebate program. Find out if they will help you get loan if you need it. The nice thing about participation in the Commonwealth Solar II Rebate program is that the state of Massachusetts has some minimum requirements of its participating contractors. To that end, make sure the company you hire is certified with the program so you get all of these incentives! If you talk to a company that says you’ll get the tax credits, but fails to mention the Commonwealth Solar II rebate, that is a huge red flag.
I always recommend getting multiple quotes of course, and also search online for reviews of any company you’re thinking of hiring. A few bad reviews among lots of good ones are probably to be expected, but if the balance of bad to good seems iffy, don’t hire them. Use the same judgement you’d apply to hiring any other contractor to work on your home.
Solar Leasing Companies
The first place we got a quote was with a reputable company which put together the program called SunRun. They have gotten even bigger since then, and I still think they are a good recommendation.
We also talked to Roof Diagnostics Solar about leasing, though I have no opinion good or bad about them regarding specifics.
There are other solar leasing companies, some with familiar names, including Vivint.
Solar Panel Installation Companies
I can highly recommend the company we went with for buying and installing our panels, NuWatt Energy. A friend of mine, John Tehan (jtehan@nuwattenergy.com) is the salesperson we talked to, someone I trust and who loves what he does. We had a couple of hiccups, but they were on the city side (a lost permit request!) and no harm done. It did delay things a little bit. But in the end, I felt confident in the knowledge of the installers, and I was on site for their entire (very short) installation period of around two days, so I was monitoring things pretty closely. Everyone from John, to NuWatt’s owner, to the contractors on site answered all of my very many questions quickly and competently. They were a godsend in helping with the paperwork, and they are a one-stop shop, with a bank you can talk to about a loan, and helping to set you up with the SREC-bundler they work with to help you sell your SRECs (I can’t even imagine doing it on my own).
Our Installation By the Numbers
But what does all this mean? Here is where we get into specifics. Namely, I’m going to disclose all the details of our system, its costs, and our loan and its costs. (Doing this with the permission of my better half, of course!) I feel that a lot of this information is abstract until you see the numbers. So here we go! This is the cost for our installation in October 2013 (just so we’re clear).
Our system:
Roof Mount 4.16 kW DC rated solar electric system
Substituting 81% of usage, assuming a $73 OR 497 kWh/month average bill.
| Total Cost of Equipment and Installation | $17,264.00 |
| Massachusetts Base Rebate ($.40/watt): | ($1,664.00) |
| MA Adder Rebate (moderate home value, $.40/watt) | ($1,664.00) |
| MA Tax Credit | ($1,000.00) |
| Federal Tax Credit (30% of installation cost) | ($5,179.20) |
| Total Rebate/Tax Credits: | ($9,507.20) |
| Net Investment after Incentives & Tax Credits | $7,756.80 |
| % Savings on Installation after Rebates | 55% |
| First Year Utility Savings | $669 |
| Estimated 1st Yr SRECs (based on today’s market value of $210 /SREC) | $1,013 |
So as you can see, the total rebates and tax credit numbers amount to 55% of the cost of our system. The SRECs have already rebounded slightly in price, so this is a very conservative yearly estimate. Of course, our SRECs will be subject to the market, so we’ll be watching that.
Moreover, here is our impact on our carbon footprint. Over 25 years, this solar system is estimated to offset:
- 106,959 Lbs. of CO2, the leading greenhouse gas
- 128,351 miles of your average auto driving in an average car, or
- 10,696 miles a year
Finally, a word on our loan. We went through the bank that our contractor works with, and got a 20-year, secured solar home improvement loan issued through the FHA. Our loan amount was $19,024 (the $17,264.00 cost of the panels and installation, plus closing costs). Our monthly payment will be just under $200 a month, but you can re-amortize once within the first year after you get all your rebates and use that to pay down the principle of the loan. Our interest rate is 9.95%. We plan on paying as much above the monthly minimum as we can, and adding our SRECs as we get receive those checks, to pay this loan down within 3-4 years, saving a bundle on interest.
Do I Have the Roof?
Don’t assume because you’re not totally south facing, or there are some trees around, that you aren’t a good candidate for solar. Of course, it should be pretty obvious if you have a perfect solar situation, but get an assessment anyway. The company(ies) you ask for quotes will come and measure your capacity with equipment that can track where the sun will be.
One proposal we got was for the east side of our one-story extension on the back of the house. Not ideal, but at the time we were worried about the structural strength of our second story roof (which is 108 years old, part of the original house). This was a proposal we got quite some time ago, before panels got lighter and cheaper and easier to install. At the time it appeared to be a viable option (this was for a solar leasing quote, so they were the ones guaranteeing a certain output). The most ideal is a south-facing, angled roof if you can get it. But a solar installer will give you more information once they assess your individual situation.
Of course, it could be the case that solar is not viable for your site, or at least not without major modification like trees being taken down. But it’s worth a free assessment if a company is willing to do that. (Often they do their initial assessment by Google satellite maps and rule out the impossible cases.)
As stated before, the structure of your roof can be a factor. Old roofs are just not built the same. Make sure whatever company you hire is willing to do an engineering study with stamped drawings. The city will ask for such things in order to give a permit, but you’ll want to have everything done right. This is a roof over your home, and between the weight, and the fasteners which penetrate the structure, you want to be sure you feel comfortable with the work done on your home, regardless of what route you take towards solar.
Other Things of Note in Going Green!
I have some idea of our next steps to becoming greener…and saving green! The first is to really get serious about our heating and cooling. There is a new technology spreading in the north (not quite new but improved for colder climates) called air-source heat pumps. There are also geothermal heat pumps, which are not tapping into thermal vents, but simply use the steady temperatures in the ground to do heat-exchange for cooling and heating for your home. Geothermal heat pumps can be expensive because of the required drilling (and in urban areas drilling is potentially problematic). However, the “air source” heat pump, which look like one of those fancy air conditioner units sitting outside your house, but in reality they are doing both cooling in the summer and heating in the winter, is now available for New England. With no drilling, installation is much cheaper.
Previously, air-source heat pumps were only practical down south in a warmer climate, but recent innovations in the refrigerant used in the closed system allows more northern climates to install these, viable down to near zero temps. It’s recommended you keep your regular heating system as backup in case the temp goes below the operating abilities of the heat pump (which is rare to never).
Why a heat pump? Because they can be 1.5 to 3 times as efficient as even the best, most energy efficient home heating systems relying on natural gas. They use a little electricity to run a refrigerant through lines between a small unit in the rooms you’ve installed it in and the outside unit, using temperature differentiation to heat and cool your home. (Bizarrely, this means “pulling the heat out of the air” in winter – which seems counter-intuitive, but the science works.) No more AC window units!! This system does both!
Heat pumps are installed on a per-room basis. What I like about this is, for things like our guestrooms upstairs we hardly use, or our back-door “mudroom,” we can simply not install a heat pump indoor unit there, driving the install price down and keeping the heat on only where we live. Then if you have guests, simply turn up the backup traditional system you kept. You can program the heat pump indoor units on a timer as well (similarly to programmable thermostats). And the per-room or per-area indoor units means you can keep different areas at different temps, again, so the places you live in the most stay warm while areas you don’t frequent can stay cooler (or vice versa in summer). It would also address a perpetual problem in our house – our kitchen is always hot in summer and cold in winter, as it is rather cut off from the front part of our open-concept first floor, and has little in the way of heat registers, or ability to put in window units for cooling in the summer. The kitchen would have its own unit suited to its square footage in a heat pump installation, and boy, would I just love that. I’m sort of sick of freezing my tail off in the kitchen in the winter!
An air-source heat pump would eat up more electricity than we current use (so our solar panels would cover less than 80% of our usage), but we would be getting rid of at least an average of $150 off our monthly natural gas bill. The efficiency of the electrically-run heat pumps could save us $600-1200 a year, according to my back-of-napkin calculations. Maybe significantly more. (Especially if we decide someday to install more panels on another lower, but still south-facing roof. Then we run our heat pump system with our own panels!)
Another energy-efficiency dream of mine in the next five years is to buy an electric car. Again, this would increase our electricity usage, and then our panels cover less of our usage annually, but we’d be getting much closer to totally green at that point. This is of course kind of a pipe dream right now, but definitely something that could be doable if the prices of electric cars comes down like they ought to.
Conclusions
In the beginning of our search, going solar felt like such a big and tough decision. I badly wanted to do it, but many of the programs were in their infancy and frankly, untried, though they were attractive even then. The initial lease programs wanted a couple thousand up front and that daunted me, when we didn’t win the Getting to Zero contest, which would have paid it.
Then, more recently, trying to suss out the pros and cons of both paths to solar, especially now that leasing programs’ up front costs are low-to-none, was even more intimidating. The idea of spending over $17,000 scared me, until my friend carefully went over every aspect of the incentives (more than once!). Between the rebates and tax credits totaling 55% of the installed cost right away (or at least by the next tax season), your total costs are quite low, comparatively. Cheaper than the cost of a low-end new car! Then you factor in the SRECs you get for ten years, and the decades of sun-made energy, and it becomes even more attractive.
I’m hoping that my assessment here, of how these incentives work and about owning or leasing, can help you take the solar leap that took us over 5 years to make. Especially with the federal incentives expiring in 2016 and renewal not guaranteed, and panel prices stabilizing and no longer dropping, I think you’ll agree, the time to go solar, if you can and you have the right roof, is soon!
Thanks for the vote of confidence – I’m happy to talk solar with anyone who would like to have that conversation, email me at jtehan@nuwattenergy.com
There is one additional con to leasing – I knew I’d think of more things after I posted. You are under contract with them for the length of the terms…so if you, say, wanted to get rid of the lease and install your own panels because now you have the money, well, too bad for you! So, if you think you want to commit long term to a lease it works great, but if you think your situation will be in flux, maybe not so much…the good news is, the contract is for buying power, which you were going to do anyway (from your traditional utility).
From the dkos diary I cross-posted, a really great question: “I notice in the pictures that the solar panels are being installed on top of an asphalt shingle roof. What happens when the roof needs replacing?”
Here was my answer:
In a solar lease, typically what I’ve seen is that the lease has a provision that the leasing company will take off the panels once free of charge during the life of the lease if you need to redo your roof. This is a GREAT question to ask if you get quotes from leasing companies, make sure they do have this provision or something like it!!
If you own your panels, you’ll have to pay for their removal, get the roof done, and then pay for the reinstall of the brackets and panels. Since a lot of the expense of the work is the electrical wiring already in place (down to the converter and your electrical panel and to the street), at least you will not incur those costs again – just maybe a half day or one day bracket-and-panel-uninstall and reinstall and maybe a brief bit of time with the certified electrician to reattach all the connections. It’s a bit of an add to the cost of reroofing but compared to the roofing contractor…probably not so bad!
There is a good chance your roof will last longer under panels, though, since the hot sun is being diverted to hitting the panels on most of that roof, and less snow will fall [directly on the roof and it will slide off fast], so that’s something to talk about with a contractor in either a leasing or buying situation. I’m told that a roof stays much cooler in the summer under panels. (The brackets keep the panels several inches up off the roof and air can flow underneath.)
A few comments from someone into his 6th year with panels.
When looking at placement, realize (as Lynne mentioned above) that snow will slide off the panels and the piles where it lands can be as heavy as concrete (the wetter the snow, the more it compacts). So try to avoid panels directly over doorways you want to use in the winter and/or places you need to shovel.
I discovered last year after a significant snowfall with really dry snow that the wet snow is preferable. If the snow is wet, it will avalanche after every inch or two. With the dry snow, none came off during the storm. The entire amount (probably a foot or so) came off all at once when it warmed up. That took out a couple of our shrubs and also meant that we didn’t get any solar electricity for a couple of days.
We own our system (the only option in 2008) and have not had any maintenance issues. There are some times during dry periods when I wish I could get up on the roof with a hose and wash off the pollen and dust, but other than that, they work fine.
I usually run a credit between the equinoxes (spring and summer), but I notice that our AC usage has creeped up the last couple of years and the amount of credit I get during these months has dwindled.
For your non-solar electricity, there are now green programs with better pricing than NSTAR’s green program. I’m using New England Wind from Easy Energy.
Useless to me as a renter, but I will forward to my ma and brother. They just closed on two family in Wakefield with a great roof and lots of sun, which could be a prime location. Our soon to be sold homestead in Cambridge was a lousy location for solar last time we looked into it for water heating. Considering they both want to redo their kitchens I doubt they want to look into this yet, but its a good option to have.
…but I can make the argument that going solar first will enable the kitchen re-do. Typically, a major home improvement returns 60% of what you spend as increased home value – if you spend $10,000 on a new kitchen, you can expect a $6,000 bump in your home’s value.
Not so with solar – in Lynne’s case, she improved her home’s value by $13,371 for a net investment of $9,516.80, including her loan’s closing costs. So, she’s cash flow positive immediately, and the system provides an income stream from energy savings and SREC earnings. Rhis income can be used to pay down the loan, or to pay for that new kitchen!
One other thing to note – even though your home value improves when you go solar, you won’t get hit with a higher tax bill. Solar power systems are exempt from property tax assessment for the first 20 years after installation.
We’re wondering (Chris and I) does that 20-year exemption on the city assessment value only for the original owner, or if the house was sold does that exemption go with it? And this exemption, is it a Massachusetts state law thing?
(You can all see how much of a PITA I was as a customer of John’s!) 😉
john: Lynne may be net investment positive, but unless she’s selling her home in the next few months, arguing that the increase in the value of her home makes her “cash flow positive’ isn’t quite right.
Lynne: My understanding is that the 20 year exemption doesn’t terminate earlier due to a sale. It is state law.
More information at the DSIRE database.
An increase in her home’s value increases her equity position, which she can cash out with a home equity loan or line of credit – allowing her to re-do her kitchen! 😉
IF we weren’t so deep in the damn hole to begin with!!
However, you know what this will help with? Getting us off our PMI earlier. Our loan-to-value ratio right now is dismal and I was looking forward to years of mortgage insurance…this puts us a little ahead on getting rid of that payment. That would be nice!
They’re as different as different can be. There’s no question that lynne increased her equity. But equity ain’t cash flow. The words mean exactly what they sound like. SREC payments? Increased cash flow. Decreased electric bill? Increased cash flow. Loan payments? Reduced cash flow. Net result? Dunno, but I’d bet it’s a reduced cash flow.
Tom put the link to DSIRE below
http://en.mapdwell.com/solarsystem/cambridge
This should give you a good idea whether your roof in Cambridge, MA makes sense for a solar electric installation.
Lynne has the basics correct — not only can your electric company not write you a check, but even if they could, you wouldn’t want it — the paperwork hassle would exceed the suppliers pricing you’d get.
BUT! If you do end up overproducing, by a little or a lot, there’s hope. First of all, you could always plug in a small electric heater. You’d be able to reduce your consumption of oil or gas, using up the surplus and otherwise “wasted” electricity. So long as the annual period begins and ends in heating season (some utilities do Jan 1, but I don’t know if all do), then you can use electric heat near the end of the cycle to “use up” your credits.
There’s more though. Air source heat pumps use electricity to heat (and/or cool) the air, and are far more efficient than electric resistance heating. They can’t work as stand-alone in New England because they can’t push enough heat when the temperatures are in the teens and lower… but for retrofitting your home, you’ve already got heat, so the air source heat pumps allow you to run your gas or oil fired system less. If you heat with oil (and can’t get gas), these air source heat pumps pay back very quickly, and are part of the Mass Saves program. Definitely check it out.
The point is: you could actually size your PV system to “over-generate” based on your current consumption patterns, if you’re also in a position to install an air source heat pump. You’ll save even more money, *and* do it carbon-free. If you happen to overgenerate by just a little bit, pick up an inexpensive electric resistance heater and use it in your living room in the evening (while simultaneously turning down the thermostat) to use up the otherwise unusable generation credits.
Had I done that, I would have read that Lynne discussed the air source heat pumps.
For serious, check them out. They’re a super duper cost efficient way to save money, increase comfort in your home, and cut carbon.
And P.S. winter is coming. That means higher heating and lighting bills. Now is a fantastic time to walk your home and tighten up the air leaks — door sweeps, locks on the wooden sash windows, the works. It’s also a great time to upgrade to LED lighting for the bulbs you use every day — maybe kitchen, dining room, lamp next to the couch in the living room, whatevs. You don’t have to make your home net-zero energy use tomorrow, but you could spend just a little time and reduce your consumption with little or no money spent, and have a little more cash in your pocket.
I win, stomv! Kidding!
We just replaced two outside lights (with the dogs, we’re always out at night getting them to do their thing before bedtime). They weren’t cheap, but even just replacing the lights with another halogen was like $10 anyway, so I went for broke. Now half of our 4 outdoor backyard lights are LED. Holy CRAP are they bright! It’s like daylight in those corners of the yard. (We better make sure they are pointed right or we’ll annoy our neighbors!) I’m tempted to trash the other two early in favor of more LEDs so we can see those dang hounds and where they’re leaving us gifts!
If one is lucky enough to run the meter backward during a fall or winter month, they’ll generate even larger surpluses in the summer. I think for most home-sized systems, it would be hard to get a credit during the low sun months (but someone prove me wrong!). Lower sun angle, many fewer hours, it all adds (or subtracts) up.
you run a surplus in the summer, and you “burn it off” in the winter. If regular use isn’t enough to do it, electric heat will do the trick.
In my experience, burning off the surplus is no problem. The credit, as Lynne said, is paid at a supplier rate, not a consumer rate. So effectively, the excess kWHs at the end of a billing period get converted to dollars, and when you use those dollars later to buy kWHs, you end up with fewer kWHs. It would be nice if it were all traded in kWHs, but that isn’t how it works.
Also, there are the extra hours of lighting in winter and the fact that I have to run blower motors (forced hot air) for heat.
at what point does the utility pay out? Monthly? Annually?
In other words, let’s say you install the solar panels on Jan 1 at 12:01 am [for the sake of the example] and lets say that it’s really sunny and you go out of town so you use little electricity in January.
Jan 31, 2014: 100 kWh PV generated, 90 kWh used, monthly surplus: 10 kWh
Feb 28, 2014: 80 kWh PV generated, 200 kWh used, monthly shortage: 120 kWh
When you get your bill for January’s use on February 5, does it “pay out” on that 10 kWh in dollars, or does it “roll over” the 10 kWh of surplus to February? Also, is this for all utilities in MA or just yours (and which one is yours?)?
Thanks
My bill comes from NSTAR. Here is how their net-metering works (at least for me).
Under the scenario you have above, when the bill comes on Feb 5, $0 is due and a dollar credit is applied to the account based on excess kWH multiplied by the supplier rate, added to any credit currently on the account (and remember the supplier rate is less than what I’d be charged if my meter registers positive for the month). Then on March 5, I’m charged for the 120 kWH based on the consumer rate (my “green program”). That is paid out from whatever credit I have banked and if that doesn’t cover the cost, I am billed for the balance.
One way to think about it: If you have such a variation within a billing cycle, like a lot of sunny days the first half of the month with storms and clouds the latter half, the surplus pays for the shortfall kWH-for-kWH because NSTAR doesn’t check the meter until the end of the month. But once you hit the end of the billing cycle, the surplus is converted into dollars and it takes more kWH during a “good” month to cover fewer kWH during a “bad” month.
Make sense now?
I had thought that net metering in MA was reconciled annually, but it turns out that, at least with NSTAR, it’s reconciled monthly. That is, any surplus kWh at the end of a monthly billing cycle is converted to $ at the supplier rate.
(Some) other states reconcile annually, which is why I suggested using electric heat in the winter to “use up” those credits before they are paid out at the lower rate.
This MA reality is quite frustrating — you’d like citizens to “overgenerate” in the summer time because the electricity they are generating replaces the most expensive electricity we manufacture all year long. Allowing the “overgeneration” to offset their winter use would be a far better outcome for both the owners of the PV and the rest of us ratepayers, because it would encourage slightly bigger installations (which are only slightly more expensive because all the fixed costs and most of the soft costs are already absorbed), which would bring down the marginal price of supply on those sunny summer afternoons, when the generating price can be as high as $1000/MWh ($1.00/kWh). It doesn’t take many hours of that expensive electricity to bring up the annual supply cost (which is a weighted average of all 8760 hours of the year).
All of the incentives for an annual (ideally in March) roll-up of the credits are spot-on. However, I assume that the lost revenue to the utilities is the main reason we don’t have it. Utilities seem to have a lot clout on Beacon Hill. They are certainly fighting efforts to allow new municipal utilities.
net metering wouldn’t be legal. That it is legal, and that it has been expanded by legislators 2, 3, or 4 times in the past few years to make net metering accessible to more people in more ways suggests that the clout utilities have may not be as strong as you seem to imply.
Allowing new munis? Most of that resistance relies on a few really, really old MA laws. Ultimately, the challenge in forming a muni is that the muni has to pay fair market value for all of the infrastructure in the town, and wires and poles are expensive.
But as of right now, a city or town doesn’t even have the option.
I think that a city or town does have the option; the problem is that the assets are so expensive (and how much they’re worth so uncertain) that a city or town doesn’t have the ability to make the purchase.
So, perhaps legal but unrealistic?
Web page here.
They put dollar credits on my bill, as described here, but those credits carry over from month-to-month and year-to-year. There is no annual reconciliation, and I don’t ever get paid the credit, it just offsets any consumption that exceeds that month’s production. So, yes, I accumulate credit during the long-days seasons, and spend some of it during the short-days seasons (and during heavy AC use).
n/t
they reconcile the kWh monthly, and convert it to $. Any kWh generated in excess of use gets reconciled on that monthly bill into $. Then, they let the dollars credit roll month to month, but at that point they’ve already bought the excess energy at the supply rate, not the residential rate.
I’d like the utilities to reconcile the kWh annually, so that you’d have a greater incentive to overgenerate during the summer. Dig?
I don’t understand where the incentive comes from. I already overgenerate in the Summer, because that’s when there’s the most solar energy available. It’s not like I can dial it down. Once you’ve installed the panels, the production is fixed to whatever lands on them. What is your incentive going to get people to do?
because it’s a conversation between (at least) stomv, kirth, and jasiu. But…
I just checked the DOER guidelines and got my hand on a ratepayer’s bill. I THINK (!) that when a customer over-generates with PV in a month [that is, makes more kWh than they consume that month] that the utility converts the remainder to dollars by multiplying the kWh by (supply price + distribution price + transmission price + transition price). I had thought it was just (kWh X supply price) based on
but that appears to not be the case.
If, as I think now (!) the utility pays for surplus kWh at the (supply + transmission + distribution + transition) rate and assigns you a dollar credit on your bill which rolls over, then, in fact it does make sense to “overbuild” in the summer so that you rack up the bucks (assuming no A/C) and apply them in the winter. Whether it’s in $ or kWh, if they’re paying at the full marginal retail rate (fn 1), then the effect of the rollover is the same.
kirth: I had thought (again, based on jaisu’s post) that the utility only paid out at the supply price level, not total price. In that situation, at the time of construction there’d be an incentive to install fewer panels than if they pay back surplus at the full retail rate, because that last panel (the one that pushes you over the edge in the summer month) will generate fewer dollars than the rest (because it’s working for the supplier rate, not the all-in rate).
fn 1 minus a few really, really small charges, on the order of $0.0025/kWh.
But it is, so if this posting doen’t spark your fancy, go to another topic, please.
I meant that *my* post shouldn’t be where it is in the thread because it’s responding to multiple things, so the logic of the thread would be disrupted… not that it wasn’t worthy of discussion.
If BMGers know anything about me, it’s that energy sparks my fancy.
I was not responding to what you meant to say, I was responding to what you said. If I am not mistaken, I believe the entire contents of the page is called a “post” or a “diary”, each individual item within on which people can upvote or downvote is called a comment. Hence the link at the top of the page called, “My Comments”. So when you said, “This post shouldn’t be here…”, the fact that you meant to say, “This comment shouldn’t be here…” is not immediately obvious, thus I assumed that when you were commenting on the “post”, that I thought you were, in fact, commenting on the “post”. Once again, the aluminium foil hat has prevented my ability to emulate normal human interaction.
and even less reason to take that many words to do so.
Chillax, mike_cote.
The post (thread? diary?) does belong here because it’s about the difference an enlightened state government’s policies are making on the major issue of our time. The conversation we’re having is just figuring out some details of how the policies work. Cross-talk is permitted; it’s not a 12-step meeting.
I don’t think I could make it past the “Making Amends” Step if it was.
You can check out how PV will work for you using a tool at this site:
http://www.nrel.gov/rredc/pvwatts/grid.html
Both purchased their panels and are very happy. I believe the electric company is forced to buy clean power so each gets a check from the power company.
Both are close to the ocean, so I wonder if the panels can get pitted from the salty air, and shorten the panels life-cycle, which I think is 20 years….
We installed 5.5 kW of solar on our roof two years ago this month, and are very satisfied with the investment. Some thoughts:
Snow-slide is a function of roof slope. The January following the solar installation, we got a 10-inch snowstorm. Because our roof slope is relatively shallow, that snow stayed put for over a month, and we had no solar production until the snow melted off. The roof is 3 stories up, and I don’t have a ladder that tall. I have considered adding a melting cable, but haven’t done it. No problem last winter.
Our system produces more than we use, and since last year, my power bill is $0 every month. The power company does convert the surplus to dollar credits. Those do not expire, so there’s no need to take extra steps to use them up at the end of a cycle. The credit balance goes down in the Winter because of shorter days and decreased solar availability. It also goes down if we use the central AC a lot in the Summer. Still – $0.
It is not necessary for your solar panels to be made in MA to get the extra $.05/W rebate, so long as some major component is local. We got a Solectria inverter, made in Lawrence, and it qualified us for that bonus. I don’t know about other inverters, but this one comes with these nifty features:
* It automatically monitors the system, and reports production directly to the SREC wholesaler. Once we set up an account with them, the SREcs are sold automatically, and we get checks in the mail.
* Our system has its own website, where I can monitor current and accumulated production. I can estimate the amount of sunshine at my house from anywhere in the world by looking at the day’s graph on the website.
* If the reporting function goes down because of a power grid or modem failure or whatever, the power generated during the outage is still recorded, and is reported when Internet communication is restored.
From that website, I can say that in the 2 years it’s been connected to the grid, the system has generated 20,064 kWh of electricity, and has offset more than 25,000 pounds of carbon. (That’s got to be at least 4 or 5 darnfromwalthams!)
This year’s SREC checks have added up to $1,000 already. They come at irregular intervals; last month there was one in the middle of the month, followed by two together a week later. The amount varies, depending on how hungry the utilities are to get the credits. The earliest ones were around $400/MW; later ones were just about $200, and the recent ones are $220-230, with the trend upward. The wholesaler notifies me by email when one of my SRECs is sold, so I know when to expect a check.
The installer estimated that our system would pay for itself in 7 years. I think he may have been conservative with that.
My next crusade is to cut down on gas use. I’ll buy an electric water heater and dryer when the current gas ones wear out.
I very highly recommend getting solar panels installed if you can use them and can afford it.
Enough with the fat jokes. 😉
What heating system do you have? It might be more cost-efficient to use air-source heat pumps for heating and cooling and to keep your gas-fired dryer and/or water heater. It might also be the case that if air source heat pumps are more cost efficient, that you could convert a tanked gas water heater to a tankless, which (I believe!) uses less gas.
Wow, what a great thread. The editors can use some of their spare time (HAH!) to dig more of these up! 🙂
One note on snow slide, since kirth mentioned it here. The very dry, powdery snow that fell in February did not slide off my panels for weeks. With the usual wet snow, my panels are clean a couple of days after a storm. I average over 500kWh for February and have produced as much as 700. Because the panels were covered for most of the month, I didn’t even hit 200.
N/T
I’m still working for NuWatt, and with today’s electricity rates, solar makes more sense than ever. The rebates have ended, but the tax credits are still there, a solar investment will pay for itself almost immediately. Email me here if you’d like the details: jtehan@nuwattenergy.com
Maybe something slightly less than a “great value”:)
…a “great value” when typing on a keyboard that looks like this:
Time for a new laptop? 😉
Over there the letters are in different places. There is a setting on them to put the letters in American spots, but you still don’t have a visual and have to know where the letters are supposed to be.
Apparently, to protect their equipment, some leasing companies put a lien on the property. They call it something else, and insist that it is not a lien, but realtors, banks, and real-estate lawyers are unanimous in saying it is one. I’m not sure how widespread this practice is, but if your home has such a lien on it, you won’t be able to sell or refinance your home, or get an equity loan, until the lien is removed.