Ownership ROI
Solar ownership today is very affordable! Incentives at the federal, state and local level enable customers to reduce the cost of going solar by as much as 50%. Simple payback models often show a five (5) year timeframe for this 25 year producing asset. Typically the analysis involves a mix of investment subsidies, Solar Renewable Credits (SREC) and Net Metering.
- Investment subsidies
- Solar Renewable Energy Certificates (SRECs)
- Net Metering
- Owner Financed Benefits
The government refunds part of the cost of installation of the system (federal and state tax incentives)
With investment subsidies, the financial burden is decreased as federal tax credits and accelerated depreciation methods bring down the costs of solar installation leading to near grid parity in overall expenses. Current incentives at the federal level are:
- A 30% Income Tax Credit (ITC) of the system price for newly deployed systems through 2016.
- A five (5) year accelerated depreciation incentive (MACRS) to help further business investment.
SREC's are another form of subsidy where their values are determined by market supply and demand. In this mechanism, a renewable energy production or consumption target is set, and the grid provider is obliged to purchase renewable energy from whoever provides it the most competitively. The producer (solar energy system owner) is paid via the SREC program.
Net Metering allowing producers to sell excess power back to the utility.
Another form of economic benefit permitted in Massachusetts is Net Metering, defined as a method of crediting customers for electricity generated via on-site solar PV systems in excess of their electricity consumption. Building owners with their own solar generation capability, offset the electricity they would have purchased from the utility. When these building owners generate more than they use in a billing period, their electric meter turns backwards to indicate their net excess generation. In Massachusetts, net metered electricity is credited at the full retail generation cost.
- Financial Incentives:
- Federal Income Tax Credit (30%)
- Income Tax Deductions - depreciation, interest expense
- MA Solar Renewable Energy Credits (SREC)
- Average Payback 5-7 years
- Visibility and Predictability of Future Electricity Costs
- Net Metering Revenue
- Green Marketing Benefits
- Reduction in Greenhouse Gas Emissions
- Energy Independence
