Rebates, savings fuel homeowner interest in solar energy
Date: 4/3/2013
By Debbie Gardner
debbieg@thereminder.comGREATER SPRINGFIELD – If you've ever thought about cutting the cord to your local utility company – or pulling the plug on your fossil-fueled hot water system – and joining the solar revolution, now is the time.
"Both the federal and state governments have incentivized the installation of solar [electric generation for homeowners]," Gregory Garrison, general manager for NorthEast Solar Design of Hatfield, said. "What we've seen since 2010 [is that] there's been about a 50 percent drop in the installation costs."
Olan Martin of Paradise Energy of Westfield said the federal government is offering a similar tax incentive for homeowners who install thermal – or hot water – solar, and that Massachusetts also offers a rebate through its Clean Energy Center.
Rebates and tax breaks are only the beginning of the solar advantages, especially when it comes to installing a solar – or photovolteic (PV) – system to generate your home's electricity. According to Garrison, the real budget boon come through net metering credits – which offers kilowatt-for-kilowatt credit on electric bills for the energy a homeowners' system generates. PV system owners can also take advantage of Solar Renewable Energy Credits (SREC) offered by publically owned power companies such as Western Massachusetts Electric Company and Northeast Utilities, which Garrison indicated can add up to several hundred dollars per year in revenue. Kenneth Maryea of West Springfield is a local resident who has seen the potential advantage of going solar to power his home. Faced with exorbitant electric costs that were only partially alleviated by conservation efforts, he started researching a PV solar electric system for his home about a year ago.
"One of the reasons was to stabilize the energy costs," Maryea said of his decision to go solar. "I'm hoping the system will cover most of [my electric bill]."
Garrison said NorthEast Solar Design recently installed a 16.9 kilowatt, 79 PV panel system on Maryea's southwest and southeast facing roofs in one of the largest residential installs the company has done to date.
He noted that during the company's initial site visit to evaluate the home for sun exposure – the first step before a solar electric generating proposal is submitted to a local utility for approval – it was evident that Maryea's property had more than the 80 percent exposure required for a viable solar system, making his property a perfect candidate for such a large installation.
Ned Wilson, PV project manager for Transformation Solar of Townsend, Mass., explained that the initial cost savings for a project such as Maryea's would come from a combination of potential state rebates, including a basic $2,000 per installation refund from the Massachusetts Clean Energy Center under its Commonwealth Solar II program, and a second credit if his system used any Massachusetts-produced parts. Wilson added that Maryea would also be eligible for a one-time federal tax rebate of 30 percent of the cost of a PV installation.
Wilson said there are also rebate programs available to homeowners whose houses are valued at less than $30,000 or who meet certain income restrictions. In addition, there is another rebate available to any homeowner who adds PV solar while rebuilding following a natural disaster such as the June 1, 2011 tornado or the October 2011 snowstorm.
Maryea said in his case, the federal tax incentive, the $2,000 rebate from the Commonwealth Solar II program, the potential revenue from selling the SREC he would accrue by operating the system, plus a dramatically reduced electric bill, made the investment seem worthwhile.
Wilson explained that the SREC program credits a solar electric generating system owner with one credit for every 1,000 kilowatts of energy his or her system generates, whether or not that energy is used when generated. These credits, which are worth approximately $300 each, can be sold through an energy broker.
This SREC program is available to the system owner – in most cases the homeowner – for 10 years from installation.
Garrison said the average homeowner could accrue up to $1,500 per year in SRECs.
"The SREC credits are a big reason [to install solar], " Maryea said, noting he estimated he would have a five- to seven-year payback on his system with the SRECs. He added he was also hoping the SREC program might be extended past the 10-year limit.
Wilson pointed out that as the system's owner, Maryea would receive all the savings and income from his PV installation. If Maryea had elected to install his PV solar with a company that leased the solar panels, his cost would have been lower, Wilson said, but he would not receive the SREC credit income. That money would go to the leasing company.
Wilson also added that individuals who receive their electricity from municipal electric companies such as Chicopee Electric Light might not be able to take advantage of the same type of net metering on their electric bills.
In these cases, there may be less advantage to solar electricity, except for the desire to go green, Martin noted.
"Without net metering, there is no way to zero out your electric bill," he said.
For more information on the Massachusetts Clean Energy Center's solar rebate programs, visit www.masscec.com/solar.
For those still looking to go solar, but who may not be able to utilize the advantages of solar electricity because of their utility system or roof orientation, Martin said a thermal hot water system may provide some utility relief.
The hot water systems, which cost approximately $15,000 to install before rebates, only require 70 percent sun exposure to function optimally. Three panels are usually sufficient to power a hot water system for an average home.
He said the thermal systems Paradise Energy installs include a backup electric heater in the water tank to insure the hot water always reaches the temperature the customer desires.
"You estimate that 60 to 70 percent of the hot water comes from the solar array, the rest of it would be covered by the backup heater in the tank," Martin said.
He noted that the 30 percent one-time federal tax credit also applies to thermal solar installations, along with a small state rebate for installation, but that the payback time frame is longer, from 12 to 14 years on average. The state rebate, he noted, is based on how efficiently a thermal hot water system actually functions once installed.
Martin said Paradise Energy, which also installs photovoltaic systems, placed 12 solar electric and one thermal hot water system in 2012.
