Solar Electricity Rebates - now up to $20,000 back on a $30,000 3 kW system!

The Economic Rescue Bill passed October 3rd included a BIG goodie for the Solar Electric Industry. The Federal Rebate for solar energy and solar hot water was extended for 8 more years! (until the end of 2016), and most importantly, the $2,000 cap on the rebate was lifted (for solar electricity only, cap of $2,000 still exists for solar hot water systems). What is the impact of this bill? One year ago, the total rebate available for a solar (PV) electric installation was $2,000. Now it is $20,000 (for a $30,000 3kW system). What has changed? The Federal Rebate (off your taxes, not just your taxable income) has increased from a maximum of $2000 to 30% of your system and installation cost (cost plus installation is roughly $30,000 for a 3 kW system, give or take a couple thousand dollars based on the particulars of your site. For a 3 kW $30,000 installation, that is $9,000 in rebates! In August, the State of NH passed a rebate bill for solar electricity of up to $6,000 ($3 a watt up to a maximum of a 2 kW, $6,000 rebate). And NHEC customers can get a rebate of up to $5,000 for a solar installation. So, that takes us from $2,000 rebate to a $20,000 rebate for a 3 kW $30,000 system. Or the price to you has dropped from $28,000 to $10,000!!! What do you get for that money? 3 kW of electricity whenever it is sunny. But what does that mean? The average daily sunlight in NH is 4.6 hours a day (based on 30 year averages). So 3 kW times 4.5h (round down slightly since you lose 1-2% of energy going through the inverter) = 14.5 kWh (kilowatt hours - which you can compare against your usage on your monthly bill). So 14.5 kWh times 30 days = 435 kwH = a little more than $70 of electricity. Now this is not just one month of $70 worth of electricity - the system will produce power for 40 years. Thus the value of the electricity your system will produce over 40 years is $70 x 12 x 40 = $33,600 (a conservative estimate). So your $10,000 system (after rebates) will buy you $33,600 of electricity, for an overall savings of $23,600. But this is actually a deceptively low estimate of your savings, as it assumes the electricity rate will stay the same for the next 40 years. Given that electric rates doubled in just the past ten years, it is unlikely we are going to see no increases for the next 40 years. All forecasts suggest that the rise in energy prices (nonwithstanding the recent dip in the price of oil) will continue to rise in the future due to increasing demand. Imagine the rate of electricity just doubles in the next forty years (cumulative double of rates). Then, your 3 kw system would buy you the equivalent of $67,200 worth of electricity, for an overall savings of $62,200!!!! That's why solar electricity has become such a good deal. Please contact us if you would like more information on solar electricity (or solar hot water or solar air heating). Our installer charges $75 for an on-site solar analysis, which will tell you what proportion of the available sunlight your potential site gets. We look forward to serving you.

Posted on October 22, 2008 by Malik Haig