The Solar equation for me

So this morning I was talking to a colleague who is interested in solar, and I reran my numbers on the cost/benefit of solar.

Cost of the system $19993.08 (Let’s round to $20k for the sake of simplicity.)

30% federal tax credit shaves that to $14k.

10 year loan on 14k at 2.99% interest is about $135.

We average about $90ish electric monthly.  Assuming electric rates rise at around 5% a year, we’ll be paying around $154 for the same electric usage in 10 years.

In short, it means that the cost of the system pays for itself in about 8 years.  This doesn’t account for one other factor, Solar Renewable Energy Credits (SREC).  There is a program where you get one credit per year for every 1000kW you generate.  My system should generate 7 SRECs per year.  utilities buy SRECs to meet renewable energy minumums, and there is a commodity trading market for SRECs.  Unfortunately here in Ohio, we can only sell our SRECs on the Ohio or Pennsylvania markets, where prices for SRECs are very low. ($6 and $10, respectively.)  By contrast, Massachusetts and New Jersey SRECs sell for $200 or more.  If we sell in the PA market, that’s $70 a year, so over 10 years $700, or 5% of the cost of the system.