Option 3: Buying Solar Panels
Why would you buy if you can rent or be part of a solar community?
Buying is still the best way to save money over a longer period of time. The negative side is that you have to come up with the money up front, then get it back through government rebates. However, once you own the panels, they are warranteed and maintained under contract by the solar company, but you don’t pay anyone for the solar power. For the next 20 or more years, the cost of energy supplied by the panels is free to you.
What if I make more power than I need in the summer and less in the winter? Welcome to New York State! If you make more power than you need in the summer, it is fed into National Grid, or your power company, and they then keep track of how much extra you made. When you need more energy in the winter, then you buy those kilowatts back from the energy company at no cost, kilowatt to kilowatt. If you still need more energy, then you can still get more from the energy company, but you would then have to pay them for amounts over the balance you have from your solar overage.
Important things to know about buying solar.
If you are in New York State:
NYSERDA: New York State gives the installers of solar systems a rebate. This amount is based on the system size, not the estimated electricity production. Many companies will list this in their estimate incorrectly using the estimated electricity production which makes the rebate look larger than it is. Always check the math that the salesperson gives you.
In 2015, the NYSERDA rebate was $ 0.50 cents. In 2016 it dropped to $0.40. Out of state companies have not kept up on this NYS change. Watch for wrong calculations on this if you decide to look into buying.
Example: On the same system the following data can be used.
Estimated electricity 9896
System size: 8.840 kw
X 0.40 = $3536 rebate amount
Or System size 8.840 kw.
Estimated electricity: 9896
X 0.50 = $4948 rebate amount
As much as I’d prefer the bottom option to be correct, the top one is. If you know your tax laws, you will not get a rude awakening because your salesperson doesn’t.
Also for New York State also gives a tax rebate of up to ⅓ the cost of the system up to $5000.00. The disadvantage is you have to wait until next tax season to get this refund.
There is also a federal refund. It originally ended December 31, 2015, but was recently extended until 2023 provided or until the money set aside has been claimed. This refund also makes you wait until your next tax year and if the money you are due back from the feds is more than what you should be getting back, that tax rebate carries over from year to year.
Projected savings with Solar purchase over 25 year period:
If your current electrical bill is $339 and you install an 8.840 kw system, it won’t be enough to make all your electricity, However, over the course of the next 25 years, that system should save you approximately $88,134.00 in energy costs.
An example of the expense for a 34 panel installation is:
System cost: $29,317.00
NYSERDA: -$ 3,536.00
Out of pocket $25,781.00
NYS Incentive -$ 5,000.00
Fed Credit -$ 7,734.00
Final System cost $13047.00
In addition you may be able to also get credit for “SREC’s” Solar Renewable Energy Credits. The New York companies are not as familiar with this as out of state companies. If you were to choose an out of state company, they may keep your SREC’s and credit you a few thousand. If you take them yourself, you can deal with a Stock Broker when the value increases and sell them to a company that needs SREC’s as a government requirement and possibly make substantially more if you wait until the value increases.
If you have questions, ask me!
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