There is green, and then there is green
The following was submitted by Tony Pappas of the Solar Initiative project:
Most folk would like to make the environment greener without making their wallet less green. So let’s look at the economics of going solar.
The cost for a basic roof top solar array now being installed on a residential roof on Block Island averages $12,000.
Against this cost, the Solar Initiative can line up three mitigators:
1) In 2020 there is a 26 percent federal tax credit. (Always consult your tax advisor.)
2) The Block Island Solar Initiative is offering two levels of assistance: a) To town designated affordable homes, a total subsidy. This is an all-benefit no-cost scenario. b) To all other home owners, a subsidy of $800 per kilowatt, up to 15 KWs.
3) State funded grants. Tony Pappas, of the Solar Initiative, personally received a grant at the level of $3,000 against my PV system, which was applied for and obtained by EnTech Engineering, a Block Island solar installation company. But grants come and go, vary in dollar amount, are very application time sensitive, and can be onerous to file. If your installation is dependent on a grant to be viable, make sure you obtain the grant first.
So let’s do some math. The basic system cost is $12,000 offset by a $2,000 Solar Initiative subsidy and a 26 percent tax credit. This brings “out of pocket” down to $7400. You go to a bank and obtain a home equity loan at 3% for ten years and pay $71.45 per month.
Now to the benefit. [Note: this analysis is based on the new proposed BIPCo tariff becoming effective. Adjustments will need to be made when other scenarios apply.] Your solar array produces 602 kwh (as mine did last month, (but sun levels and system sizes vary) and BIPCo “pays” you $.15/kwh (this number is likely to vary between .12 and .16) or $90.30. After paying the bank that month you put $14.85 in your pocket! And in year #11 the $71.45 goes in your pocket monthly, too. Solar arrays are typically rated for 25 years, so you may be looking at 15 years of sunny weather.
Or suppose you pay the whole $7,400 up front. This leaves you $90.30 per month or $1083.60 annually. This amounts to a return on investment of 14.6 percent. Note: This is based on reasonable numerics for a number of variables: system size and cost, number of sunny days, BIPCo payback rate, etc. This is one possible example and is not meant to imply a definite return in all situations.
Individual situations may not fit the assumptions made in this analysis, so do your own math. The Solar Initiative team will work with the homeowner on the specifics for each home. Contact email@example.com or call (508) 272-8822 for more information.