Upfront Solar Energy Payments

If you choose to, you can sell several thousand dollars worth of Solar Renewable Energy Credits (SRECs) before you even install your PV system. Along with the Federal Tax Credit, this can pay for nearly half the cost of a new solar installation.

Here's how it works:

Avery and Sun works with Sol Systems, a company that brokers SRECs. They don't buy the electricity; they buy the credits for generating electricity from renewable resources, like sunlight, from people who have solar installations. (Our customers are already getting checks in the mail for their SRECs). Many utility companies are mandated to produce a percentage of their energy from renewable energy sources; if they don’t generate it themselves they have to buy the credits for generating it from Sol Systems or other brokers. If you install solar, you generate the credits in addition to the energy itself. You keep the actual electricity to run your house, back up your meter, and offset the costs of electricity, and you get to sell the credits. You can sell the credits for $.20 a kwh (This is about twice what you actually pay for a kwh.) or, you can sell 10 years worth of credits in advance, for $1200 per kw of installed capacity. This comes out to about a quarter of the cost of installing a system. With the tax credit, it amounts to around half.

Here's an approximation of how the numbers crunch:

Let's say you have an ideal site: A south facing roof with a good angle and no shade from trees, chimneys, dormers, etc., and no unusual circumstances that would add costs. You contract with us to install a 4 kw photovoltaic system for $22,000. This will provide you with about 400 kwh (kilowatt-hours) of electricity per month. (All figures are, of course, estimates, but about right.) You can either, sell ten years of solar credits up front for $4800 and subtract this from the $22,000, or you can sell the credits as you generate them for about $960 per year. You get the 30% tax credit either way, and you still get the cost saving from the electricity itself.

If you sell the credits up front, your price of installation goes down to $ 17,200. After you write $5160 off your tax return, the net price of your system is $12,040, slightly over half the original amount. After ten years you can begin selling the credits again. (Your inverter is guaranteed for 10 years and your panels from 20 to 25 years. They should both last considerably longer.)

If you sell the credits as you generate them, you pay the full $22,000 up front, but the 30% tax credit (based on the higher amount) comes to $6600. Your net price is $15,400. Selling the SRECs for $960 a year, your system will pay for itself in 16 years, without even considering the money you save from the electricity generated.

The money you save by generating your own electricity depends on a variety of factors. With taxes and surcharges, 400 kwh/month usually amounts to $400 to $500 per year savings in Kentucky. This will bring your payback time to about 10 years. This does not take into account increases in non-solar energy costs in the coming years. (LG&E's rates will be going up 12.1% this year.) Once your system is installed, you have already paid for up to 50 years of electrical energy. (The cost of sunlight is guaranteed to remain fixed at zero for the next billion years or so.)

Solar energy converts a continuing monthly expense into a one-time investment. You buy something now that lasts the rest of your life. The cost is still high, but solar credits and the federal tax credit bring it down to a reasonable level. There can be no doubt now that those who make the investment will be more energy secure and better off financially in the long run. They will have the satisfaction of generating energy without emitting sulfur dioxide, carbon dioxide, particulates, cadmium, or mercury into the environment, and they will not be sending armies to far off places or destroying mountaintops to secure fossil fuel supplies.

Solar is one thing we can do.

We hope this new information helps you think it over.