Sample Solar Installation Finances
The seemingly expensive solar panel system becomes approachable when you take into account how the state of NJ is going to help you pay for it.Say you are interested in a modest $30,000 system, large enough to offset an annual electric bill of $700. Let's see how this gets paid for.
1. NJ State rebate: This is an immediate rebate of $1.75 per watt from New Jersey. For our sample system, this would be $6,650. Installers, such as ourselves, usually reduce the initial cost of your purchase by this amount when pricing your system. Instead of $30,000 your system is effectively $23,350.
2. Federal investment tax credit: This 30% credit means that for our theoretical system, you’ll pay $9,000 less in taxes. You can spread this credit out over five years if you can’t use it all at once. This means the system really is now $14,350.
3. If you're a PSE&G customer you can obtain financing from them for about 60% of your system cost. Let's call it $15,000. Best part - You’ll pay this loan in SRECs, not in cash.
All in all, your costs look like this:
System Cost $30,000
State Rebate $6,650
Federal Tax Credit $9,000
PSEG Loan $15,000
Out of Pocket $0
Since you never invested anything, your payback time is zero and once your loan with PSEG is satisfied you'll have savings to boot. For example, you'll also save on your electric bill and will probably have several years of SREC sales remaining after the loan period.
Non-PSEG residents have similar programs from their utility companies to consider. Paying in cash or with a private loan implies a payback period which is typically around five years, with profits enjoyed thereafter.
In short, the numbers work out well for the homeowner. The State of New Jersey is essentially paying people to install residential solar, and making utility companies do the same. It's a historic opportunity, and one we hope will last.
Contact us to help YOU go SOLAR! 201-736-9388
