Cost of Residential Solar Electricity in New Jersey, New York and Connecticut

The economics of investing in a solar electric system for your home or business varies depending on a number of factors, including:
  • Solar system performance - a function of orientation, pitch (slope) and shading issues
  • Electric rates - depends on your individual utility rates (note that rates in NJ, NY and CT have all increased from as little as 7.7% to nearly 40% for some rate payers -- the economics below assume these new rates)
  • Utility or state subsidies (usually referred to as rebates)
  • 30% federal investment tax credit, uncapped for residential
  • 25% state income tax credit for NY residents, with a cap of $5,000 (none in NJ or CT)
  • Annual Sale of Solar Renewable Energy Certificates (SRECs) in New Jersey (sometimes called "Green Tags")
Below are the economics for typical 5000-watt residential solar systems in New Jersey, New York, and Connecticut, on fully-sunny, south-facing roofs. The calculations include an assumed 5% average annual escalation in electric rates, which is approximately the historical average for the region over the last 30 years. If rates go up more quickly, then annual rates of return will be higher and payback periods will be shorter. 

The opportunity to sell SRECs in New Jersey comes about from the passage of Renewable Portfolio Standards (New York and Connecticut may have SRECs in the future - such programs are under evaluation -- but there's no guarantee that they will or what their value will be.) 

5KW SYSTEM  NJ SOLAR REBATE PROGRAM
System Price$38,000  
Rebate$8,750$1.75/Watt: 19.5% Savings
System Price less Rebate$29,250$7.23/Watt 
Fed Investment Tax Credit (30%)$8,775  
Net Effective Purchase Price$20,475$5.06/Watt 
Year 1 Solar Savings:   
Electricity Savings$1,09523.0% 
Solar Renewable Energy Credits (SRECs)$2,750$550 per SREC
Total Year 1 Solar Savings$3,845  
    
Years to Break-Even:6.1  
Internal Rate of Return (20-Yr):24.8%  


5KW SYSTEM  LIPA SOLAR REBATE PROGRAM
Pricing for High Output Panels
System Price$38,000  
LIPA Rebate$12,500$2.5/Watt: 46.1% Savings
System Price less Rebate$25,500  
NY State Tax Credit$5,000NY: 25% ($5K cap)
Fed Investment Tax Credit (30%)$7,650  
Net Effective Purchase Price$12,850  
Year 1 Solar Savings:   
Electricity Savings$1,09523.0% 
20-Year Solar Benefits:   
20 Yrs Electric Savings$37,978$0.346/Watt (avg)
    
Years to Break-Even:9.2  
Internal Rate of Return (20-Yr):15.7%  


5KW SYSTEM  NY STATE SOLAR REBATE PROGRAM (NYSERDA)
Pricing for High Output Panels
System Price$38,000  
Rebate$9,056$3/Watt: 39.5% Savings
System Price less Rebate$28,944$5.59/Watt 
NY State Tax Credit (if applicable)$5,000NY Residential: 25% ($5K cap)
Fed Investment Tax Credit (30%)$8,633  
Net Effective Purchase Price$15,261$2.95/Watt 
Year 1 Solar Savings:   
Electricity Savings$1,15420.9% 
20-Year Solar Benefits:   
20 Yrs Electric Savings$51,241  
    
Years to Break-Even:10.4  
Internal Rate of Return (20-Yr):13%  


5KW SYSTEM  CONNECTICUT SOLAR REBATE PROGRAM
System Price$38,000  
Rebate$25,000$5/Watt: 65.8% Savings
System Price less Rebate$13,000$2.6/Watt 
Fed Investment Tax Credit (30%)$3,900  
Net Effective Purchase Price$9,100$1.82/Watt 
Year 1 Solar Savings:   
Electricity Savings$99032.6% 
Total Year 1 Solar Incentives$990  
20-Year Solar Benefits:   
20 Yrs Electric Savings$42,574$0.429/Watt (avg)
    
Years to Break-Even:8.3  
Internal Rate of Return (20-Yr):18.5%  

Posted by Ricky Sunshine at 2/18/2010 10:06 PM
Categories: Solar Rebates
Tags: connecticut solar rebate new jersey new york solar home solar panels solar power
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