Going Solar - Step by Step
In a previous thread I mentioned that we were considering putting solar panels on our roof. We finalized our contract last night, and we should have solar panels on our roof by the end of the year. Our community was selected to participate in the Solarize Mass program. I don't know a whole lot about the program details, but I know it is a subisdized program to bring solar panels to residential homes in Massachusetts.
In my previous thread, Dee asked me to post about our experience with the process, so this is what this thread is about.
We contracted for a 5 kW system. 20 Suntech 250 watt solar panels. It is estimated that 62% of our energy will be solar. It is estimated that we will generate 4,430 kWh our electricity annually.
We actually have a relatively small house. It is a 1950s center entrance colonial, with garage on one side and sun porch on the opposite side. Our house roof measures 14'8" x 30'8". We will put 16 panels on the roof of our house. Our (1 car) garage roof measures 10'8" x 11'8". We will put 4 panels on the garage. The enclosed porch is on the North side of the house and will not get any solar panels.
I thought a lot about whether I would mention pricing on this thread. But I decided that pricing is one of the biggest factors when people decide whether to purchase a solar system. Yes - this system is a lot of money. However, we consider it a "major improvement" to our house. So instead of just thinking about this in dollar terms, I start thinking about it in terms of number of mortgage payments. In our case, the system is about 2 mortgage payments.
Our contract price for the system is $8,655.39
This is for a 20 year lease of the system.
We made a 30% down payment last night. The balance is due upon installation of this system - which should be some time in December. There will be no additional lease payments.
There are 3 factors to consider when calculating payback.
1) How much solar will your system generate?
2) What is the going rate for a kW of electricity?
3) How much can I sell my SRECs for?
1&2) We don't have the best orientation for our house. It faces South East. And we have a huge silver maple tree in our front yard. Our generation assumptions are made based on cutting down the tree.
The system is estimated to produce 4,430 kWh of electricity per year. We have a guarantee that our system will produce 4,209kWh of electricity in year 1. If the system does not produce that much electricity, we will get a rebate check from the manufacturer. We have an output guarantee for 20 years, with guaranteed output declining by 1/2% per year.
Right now the going rate of electricity is 16.9 cents per kW. Our rebate is based on that price, increasing by 3% per year.
On average we use 6,500-7,000 kW of electricity per year. Our average electric bill is $100. By generating solar electricity, we expect our bill to decline by $62 per month.
3) The SREC's. Solar Renewable Energy Credits. You receive 1 SREC for every 1,000 kWh of solar electricity your system generates. Thus we will receive 4 SREC per year for the next 15 years.
Utility companies buy SRECs to help them comply with the states Solar RPS requirements and help them avoid paying a Solar Alternative Compliance Payment.
The price of a SREC is all based on supply and demand, and they have an active trading market. Massachusetts has targeted the price of an SREC to be $285. Currently an SREC is being sold for about $225. After commissions, we would realize just under $200 per SREC. In July an SREC was selling for $270.
We have opted to pool our SREC's with our leasing company, they will be sold annually at the going rate and we will pay no commission. We could have opted to have a guaranteed price of $170 per SREC for the next 3 years. We are hoping the price will increase closer to the target rate of $285.
Feel free to ask specific questions, and I will do my best to answer them. I am going to try to get some roof and tree photos taken as I try to document this process.
As for next steps - I should hear from the installer in the next 2-3 weeks to set up an installation time frame.
I need to call my tree man to arrange for the maple to be removed.