Why Go Solar?
You may have an altruistic reason for going solar such as:
- Reduce Climate change
- Being self-sufficient
- Freedom from rising utility rates
- Using Pennsylvania-generated energy
- Switching to distributed power that reduces the load on the nation’s electric grid
- Reduce your air pollution foot-print
- Reduce your reliance on natural gas fracking
But most people only make the decision to go solar when the economics work. So here you can see some real examples of how solar costs less than the utility.
Example 1, a house with a $135/month electric bill: Groundhog Solar installs a 9 kW system on 500 square feet of south-facing roof. The solar array also reduces the weathering of the shingle roof. Homeowner pre-sells SRECs for 25 years. Homeowner then finances $15,000 over 15 years with payments of only $112/month that are less than the utility bill would have been.
$23,130 total costs
- $6,014 Federal tax credit (26%)
- $2,042 Pre-sale of SRECs
- $15,074 Net cost after tax savings.
This system would then generate $1490 in electric bill savings each year (10,200 kWh). A loan for $15,100 over 15 years at 4.99% has payments of $112/month. The utility bill drops from $135/month to $11/month plus the loan payment of $112/month. Homeowner saves $12/month now and even more as the utility rates increase and the loan payments stay fixed. After 15 years, the system is paid off, the homeowner still has another 15 years of warranty and many more years of expected solar array life. The system will pay for itself AND save an additional $105,000 over the expected life of the array.
7.5 Year Simple Payback
14.5% Return on Investment
Example 2, a house with a $280/month electric bill: Groundhog Solar installs a 19 kW system in 1000 square feet of back yard or open field area. The solar array also provides an ideal location for a shade garden or sheltered storage building.
$43,200 total costs
- $11,232 Federal tax credit (26%)
- $4,401 Pre-sale of SRECs
- $27,5670 Net cost after tax savings.
This system would then generate $3200 in electric bill savings each year (22,850 kWh) and results in a 7.5-year payback. This is also equivalent to an 14.5% return on investment in which the electricity production is guaranteed and the solar modules have a 25 year warranty. This is unmatched in the investment world where even lower yields of 8% always have considerable risk.
8.5 Year Simple Payback
14.4% Return on Investment
Example 3: Groundhog Solar installs a 15.6 kW system on 900 square feet of a southwest-facing roof. The solar array also reduces the weathering of the shingle roof and reduces summer air conditioning needs by shading the roof itself. This roof is not oriented perfectly, but since there is no shading, it works very well.
$33,540 total costs
- $8,720 Federal tax credit (26%)
- $21,635 Net cost after tax savings.
This system would then generate $2300 in electric bill savings each year (16,500 kWh) and the homeowner sells 16 or 17 SRECs each year at the current price of $35 each for an additional income of $575/year. This results in an 8.5 year simple payback and a 14.4% return on investment. Like the example above, this is an unmatched investment. In fact, what better way to save for retirement than by eliminating your electric bill for life! In addition, the SRECs provide additional income for life and there is an increase in home value of about $30,000 that can be passed down in the family or used for other purposes.
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