After many years of wondering if an upgrade to solar power makes sense, the Joneses finally decide the time is right to investigate a bit further. Armed with nothing but curiosity, they contact Independent Solar. The Joneses live in a 2,500 sq ft home with their two children in Pittstown, NJ. They have central air conditioning, and their heating system runs on natural gas.
Step 1 – Demand Profile
The Joneses presently purchase their electricity through JCP&L, and a quick review of their recent bills by Independent Solar shows that they spent $2,900 last year on electricity. At a rate of $0.17/kWh, they consumed just over 17,000kWh of energy last year alone!
Step 2 – Design Goals
While the Joneses would love to go solar for “green reasons”, the reality is their family budget does not include a “green” line item. However, with interest rates at extremely low levels and a volatile stock market, the Joneses are looking for alternative investment opportunities for their savings of $40,000. They ask Independent Solar to put together the most attractive design from a financial point of view for $40,000. Their home sits on 1.5 acres of beautifully maintained grass, which they are not interested in covering with pole-mounted solar panels. However, their 4 year-old home has excellent southern exposure, so a roof mount system is the ideal choice for them.
Step 3 – Design Proposal and Quote
Independent Solar’s certified technicians perform a thorough site analysis including geographical features, shading issues, solar exposure, and present electrical service to develop a detailed plan for mounting all necessary hardware, running all necessary wiring, and making the necessary connections to the Joneses’ main electrical service. After this, Independent Solar prepares a design proposal and quote which is presented to the Joneses for review and input on potential adjustments. In summary, the quote is for a 6kW polycrystalline PV roof mounted system that is designed to tie back into the grid for net metering. This system will produce enough energy to cover all of the Joneses’ annual energy consumption, and is still expandable if they decide to add to it in the future. Most importantly, the full system and installation comes in just below their $40,000 target.
Step 4 – Project Kickoff
After working with Independent Solar to make some final tweaks to the design proposal, the Joneses sign a contract and place a deposit that triggers project kickoff. Independent Solar begins the SREC application process for the Joneses, which entails filing a number of documents relating to the proposed installation. The state of New Jersey responds with an SREC Acceptance Letter in less than 3 weeks.
Step 5 – Installation
After receiving their SREC Acceptance Letter, the Joneses place another deposit with Independent Solar to order all the necessary equipment, including solar panels, wiring, inverter, and safety panels. Once the equipment arrives, the Joneses make a payment to Independent Solar to begin the installation. The panels are mounted on the Joneses’ roof in a few days time, and Independent Solar’s licensed electrician arrives after to complete the system wiring and tie the solar system to the Joneses’ existing electrical service. The system is not yet turned on.
Step 6 – Inspection
After the system is installed, the local inspector is called in for final inspection to ensure the system is safe and meets all required codes. After the inspector signs off, the Joneses new solar energy system is powered up, and they make their final payment to Independent Solar.
Step 7 – Payback
Once their system is powered up, the Joneses begin seeing the return on their investment immediately. During the summer when their air conditioner is running, the Joneses see their electricity bills drop significantly, and in the winter they actually see their electric meter spin backwards and get a check from JCP&L every month. In total, their electricity bill is reduced by nearly $1,300 alone in the first year. At the end of the year, they receive an $12,000 tax credit. And they receive a check averaging $4,000 each year for the next 15 years, for their Independent Solar managed SRECs. Their system will pay for itself in ~3.5 years, and when compared to other potential investment opportunities, is projected to maintain an internal rate of return (IRR) of 27%.
Initial cash out: $40,000
Federal tax credit: $12,000
Annual SREC credits (assuming $650/credit May 2011 and 3% annual drop): $3,969
Annual reduction in energy costs (assuming 6% annual electricity rate increase): $2,903
Payback period: 3.58 years
The above is a fictional example based on typical costs and incentives. Every solar project is unique, which is why Independent Solar is here to help you understand the costs and benefits of converting your home to solar. Call us at (908) 528-8441 or to request a free proposal, [click here]