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How Long Does It Take to Break Even With Solar Panels?

By Mikey Rox

June 15, 2017

Read the original article Here

Solar power has advanced leaps and bounds over the past couple decades, and those grid panels that harness the power of the sun and turn it into energy are everywhere. It’s not uncommon to find at least one house in your neighborhood that has panels covering every square inch of its roof.

You may have also been approached by a solar company rep about outfitting your home with panels. (These guys and gals are almost as ubiquitous as the product they’re selling.) And maybe you don’t understand the mechanics of solar home power — or its benefit to your wallet — which may make you hesitant to explore the option.

Well, you’re not alone. Those of us who haven’t adopted solar energy yet still have a lot of questions — namely, what’s this going to cost? And when will I break even?

The cost of solar panels

First, let’s get down to the nitty-gritty of just how much solar panels will set you back. It’s not cheap to save the planet, even though the sun has been free of charge for billions of years.

The easiest way to calculate the average cost of solar panels, according to New England-based solar-installation company EnergySage, is to look at its price in dollars per watt, and those numbers are fairly consistent across the country.

This year, “most homeowners are paying between $2.87 and $3.85 per watt to install solar, and the average gross cost of solar panels before tax credits is $16,800,” says EnergySage’s data. Figure in tax credits and the price comes down to $10,000 to $13,500, based on the average 5kW (5,000 watts) system that’s typically installed in the United States. EnergySage also says these numbers are about 9 percent lower than last year, but recommends comparing prices quoted to other homeowners in your area.

Now that we know how much the system will set us back, the next reasonable question is how long will it take to break even. (See also: 10 Ways Anyone Can Go Solar and Save on Energy)

When you’ll break even

Sarah Hancock is a digital marketing strategist who manages the solar coverage at BestCompany.com, an online review site that ranks companies in different industries. She says the amount of time it takes to break even depends on three main factors.

1. Current utility price

The higher the current electricity price is in your area, the more money you will save by going solar, which results in a faster break even time, Hancock says.

“For example, an individual who lives in California, where the price of electricity currently sits at about 17 cents per kilowatt-hour, will break even quicker than an individual who lives in Washington, where the electricity price is only 9 cents per kilowatt-hour, because the Californian will be saving more on his electricity bill each month,” Hancock says.

2. Available incentives

These vary from state to state. There are a number of different incentives to take into consideration, including tax credits, rebates, performance payments, and tax exemptions. The more incentives available to you, the quicker your break-even time will be.

“One of those incentives is the 30 percent federal tax credit,” says Andy Schell, marketing manager at Paradise Energy Solutions. “This credit allows solar owners to recoup 30 percent of the project’s cost. If you aren’t able to recoup all 30 percent in year one, the remaining amount can be carried forward for 20 years until the full credit is expended. In addition, USDA grants and accelerated depreciation schedules are available for qualifying businesses and farms.”

This is a good resource to find solar-energy incentives available in your state.

3. Method of payment

According to Hancock, you can purchase the panels outright, or get them on loan, lease, or PPA (power purchase agreement — which is a financial agreement that allows a developer to arrange the design, permits, financing, and installation of a solar energy system, and lasts anywhere from 10 to 25 years).

However, there are fewer studies supporting the increased home value when you upgrade your home through a PPA or a lease. The reason is simple: With an upfront purchase or loan, the new buyer will not have to pay for any of the electricity produced by the panels because you would have already paid for it. With a PPA, the new buyer will still pay for electricity, simply at a lower rate than what other neighbors will pay to the utility company. Those agreements are easily transferable and can also be bought out by either seller or buyer if necessary.

The payment method that will result in the quickest break-even time varies from state to state depending on the two other factors mentioned above — utility price and available incentives. If you live in a state with high electricity prices and several incentives, you will probably break even quicker with a loan because your energy savings will be higher than your loan payment. However, if you live in a state with low electricity prices and few incentives, you’ll most likely break even faster with an outright purchase.

“To provide a general range,” Hancock says, “most individuals who go solar will break even in 15 to 25 years.”

Leasing versus buying a solar system outright

“We guide homeowners with what we’ve seen is the question that is most likely to help them decide what route to take: How much is your tax liability?” says Julio Daniel Hernandez, a representative of renewable energy company EnLight.Energy.

If your tax liability is big enough right now to able to take full advantage of the Federal and possible state tax incentives, he says, then you should take advantage of the available loans and tax credits. If you don’t have the tax liability, then a PPA/Lease makes more sense. You’ll get access to all of the energy your solar system can provide at a cheaper rate than your utility company (usually around 20% savings) and will not ever have to pay a dime out of pocket.

As far as break-even calculations cost go, Hernandez’s estimate is much more liberal than Hancock’s.

“Break-even with a PPA/lease is zero because you don’t pay anything; you just start saving right away similar to a third party electric company in a deregulated market,” he says. “If you buy a system, depending on the incentives available to you, break-even point should be around eight years or less.”

How incentives and pricing have evolved

As an early adopter of solar power a decade ago, you would have made out like a bandit with incentives, but that’s not the case now that so many people are switching over to the energy solution. But as with all technology, the longer it’s been around, the cheaper it becomes on the front end.

“Unfortunately, there are fewer incentives available now than there were 10 years ago due to the increased popularity of solar power,” explains Hancock. “However, the good news is that the price of solar panels has dropped by more than 60 percent over the past 10 years. So, while fewer federal and state solar incentives are up for grabs, solar power is still more affordable than ever for consumers.”

Is it a good investment?

In most states, solar power is a solid investment that will result in a significant return over the next 20 to 30 years.

“For example, an individual in California who purchases a solar system outright can probably expect to see a return between $30,000 and $40,000 over the next 25 years, while an individual in Washington could expect a return of about $10,000 for the same scenario,” Hancock says.

Although the dollar-for-dollar return isn’t as high for the Washingtonian as it is for the Californian, both individuals are still saving money with solar power.

Says Hernandez, “Your home value is estimated to go up $15,000-plus by upgrading to solar energy. Some of this depends on the size of the system, but studies are showing that the bulk of the increase comes from simply putting panels on and then there’s only a slight additional shift upward based on how big the system is.”

Solar power emerges where oil and gas once dominated

By Ryan Maye Handy

June 13, 2017

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When oil prices tanked two years ago, hundreds of Pecos County workers lost jobs working at oil and gas companies in the prolific Permian basin. Last year, the rural county lost around 20 percent of its $2.5 billion tax value.

But the unemployed residents weren’t out of work for long. Most of the 300 to 400 oil field workers found jobs installing solar panels beneath the hot and abundant West Texas sun.

Pecos now has five operational solar farms, large projects that meet the definition of utility-scale – having the capacity to generate at lease 1 megawatt, enough to power about 200 houses on a hot Texas day.

All told, the projects, including two likely to get underway within the next few years, are expected to add hundreds of millions of dollars to the tax base of the county, where solar panels stand on the same property as gas flares and drilling rigs.

“It’s a great marriage,” said Doug May, the executive director of the Fort Stockton Economic Development Council in the county.

Pecos County, which has only three people in each of its 5,000 square miles, has become a hub for utility-scale solar power. Across the nation, solar farms are poised to become a boon for rural economies that have been hard hit by the decline of industries such as agriculture, manufacturing and coal, as well as the boom-and-bust cycles of oil and gas.

In North Carolina, for instance, farmers lease fallow land to solar panel companies; in West Texas, counties like Pecos, once reliant on oil and gas extraction, are diversifying through solar and wind power.

Utility-scale projects are eligible for a state tax abatement – up to 80 percent for 10 years – an incentive that has drawn projects to places like Pecos County. Texas’ utility-scale installations, at around 783 megawatts, are expected to double in Texas this year, according to the Solar Energy Industries Association, a national trade group.

Beyond abundant sunshine, the county’s other draws are its many transmission lines that feed into the electric grid that serves the state’s population centers. More transmission lines are expected to be added in 2019 and 2020, likely driving another burst of solar installations, May said.

If that happens, solar power will exceed the county’s 700 megawatts of wind energy. In addition, solar companies will employ locals even as the price of oil remains stubbornly below $50 a barrel.

“It has basically helped to compensate for the boom and bust cycle,” said Colin Meehan, the director of regulatory and public affairs for Houston-based First Solar, which has two solar farms in Pecos. “They see it as just another source of revenue.”

Pecos is a model of how rural counties can benefit from renewable energy, said Helen Brauner, the director of origination strategy for 7x Energy, an Austin-based utility-scale solar company. In Austin on Tuesday, Brauner and other solar executives gathered at a conference hosted by the Solar Energy Industries Association.

“The typical 100-megawatt solar project should give the county about $30 million in property tax revenue” over the duration of the project, Brauner said.

The conference attendance nearly doubled this year to more than 400, a sign that Texas is primed for more investment in solar, conference organizers said.

Nonetheless, the growth of utility-scale solar in Texas suffered a setback in April of last year when Sun-Edison, the world’s largest renewable energy developer, filed for bankruptcy, delaying two major projects.

In September, Houston-based NRG Energy bought one the projects, the 154-megawatt Buckthorn solar farm in Pecos County. When the project is done next year, its sole customer will be Georgetown, a city of about 60,000 north of Austin.

These Solar Panels Generate Drinking Water from the Air

By Rich Demuro

June 12 2017

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A company called Zero Mass Water has created a special solar-like panel that creates clean, drinkable water from the air. You can now install them on your home or office.

I’ve drank a lot of water from bottles, but it was never created like this.

I’m on the rooftop of a building in Santa Monica on an overcast day, checking out solar panels from a company called Zero Mass Water. These are not just your typical energy creating panels – they are busy pulling water out of the air.

“It turns out there is more water in the air than all the fresh water in the planet,” explains Zero Mass Water CEO Cody Friesen.

Friesen says he’s installed his special form of solar panels in seven countries. The panels are self-contained – with everything they need to generate clean drinking water inside. Solar cells power the device, a special membrane inside absorbs water molecules, which is then treated with minerals for a fresh taste before being stored in on-board reservoirs.

“What these panels do is very similar to the ocean, sun, rain cycle,” says Friesen.

You can hear cooling fans whirring as the panels do their job on the rooftop. Each panel costs about $2,900 and that does not include installation costs. A panel produces about ten small water bottles daily and is expected to last for about ten years. A simple water line carries the drinking water inside the building, your home or into your kitchen.

We head downstairs to a drinking fountain supplied by Zero Mass Water’s panels. As I fill up a water bottle, a digital counter says the system has filled the equivalent of 5,862 plastic water bottles so far.

The water looks and smells clean. I take a sip and am pleasantly surprised by the taste. It’s fresh, crisp and doesn’t have the flat taste I had imagined.

Zero Mass Water has managed to create a green source of water and their panels are now available to homeowners in California and Arizona, although the company says they will work anywhere in the world.

Although their current price is prohibitively expensive for many homeowners, they practically pay for themselves in about 4 years if you’re currently buying bottled water. It also just feels neat knowing that you’re going green and creating your own water supply, seemingly from thin air.

More information:

Zero Mass Water

Solar accounts for 30 percent of new energy in U.S. so far this year

By Bret Fanshaw

June 8, 2017

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WASHINGTON, DC – A new analysis released today by SEIA/GTM Research shows that solar remains a growing part America’s energy mix so far in 2017, accounting for 30 percent of new energy capacity installed.

California, North Carolina and Arizona rank as the top three states for solar installations during that time.

The report comes as President Trump withdraws the United States from the Paris Climate Agreement and as dozens of state and local leaders double down on their commitments to climate action and renewable energy.

According to SEIA, the U.S. now has nearly 15 times more solar energy capacity installed than in 2010, with enough solar to power the equivalent of over 8.7 million homes and reduce 55 million metric tons of carbon emissions annually.

The solar industry is expected to nearly triple in the next five years, as demand for clean energy grows and costs continue to fall.

The data comes from the quarterly U.S. Solar Market Insight Report by SEIA/GTM Research.

Environment America solar program coordinator Bret Fanshaw released the following statement in reaction to today’s report:

“The data released today is clear: solar power continues to boom across America.

“If state and local leaders keep stepping up their commitments to solar power, our country’s health and environment will benefit from cleaner air, water and a safer climate.

“These figures also show that even while President Trump withdraws from the Paris Climate Agreement and unwisely rolls back American commitments to act on climate change, state and local governments, businesses and institutions stand ready to ramp up renewable energy at record speed.

“In order to reach 100 percent renewable energy, we can and must continue the wave of solar adoption currently underway in our communities.

“We urge state and local leaders across the nation to stand with us for a clean, bright solar future.”

US Army Base Goes Green With Renewable Energy Project

By Reuters

June 6, 2017

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The U.S. military’s biggest base on American soil has begun drawing nearly half of its power from renewable energy, days after President Donald Trump’s decision to pull out of a global agreement to fight climate change.

Fort Hood, in Texas, has shifted away from fossil fuels to wind- and solar-generated energy in order to shield the base from its dependence on outside sources, a spokesman said.

“We need to be autonomous. If the unfortunate thing happened and we were under attack or someone attacked our power grid, you’d certainly want Fort Hood to be able to respond,” Chris Haug, a spokesman for Fort Hood, said in a phone interview.

The project brings the Army base, home to 36,500 active-duty personnel and some 6,000 buildings, in line with the Department of Defense’s decade-long effort to convert its fossil fuel-hungry operations to renewable power.

It comes in the wake of Trump’s decision last week to withdraw the United States from a landmark global agreement to fight climate change, the Paris accord, a move that drew condemnation from world leaders and heads of industry.

The project is already fully operational. Its 63,000 solar panels, located on the base’s grounds, and 21 off-base wind turbines provide a total of some 65 megawatts of power, according to an Army statement.

Previously, some 77 percent of base’s energy was generated by fossil fuels, a 2015 draft report assessing the renewable energy plan shows.

Burning fossil fuel generates greenhouse gases that are blamed by scientists for warming the planet.

The Paris accord aims to reduce such emissions, including by encouraging a shift to clean energy.

Fort Hood’s new solar field and wind farm will result in savings of more than $100 million over some 30 years, the Army said.

Over the last decade, the U.S. military and intelligence officials have developed a broad agreement about the security threats that climate change presents, in part by threatening to cause natural disasters in densely populated coastal areas, damage American military bases worldwide and open up new natural resources to global competition.

The number of military renewable energy projects nearly tripled to 1,390 between 2011 and 2015, a Reuters analysis of Department of Defense data previously showed.

The Defense Logistics Agency (DLA), a Department of Defense agency assisting the Army in its renewable-energy shift, is also working with the U.S. Air Force on long-term renewable energy projects, a DLA spokeswoman told the Thomson Reuters Foundation.

Solar Power Has Finally Proven That It’s The Energy Source of the Future

By Kaitlyn Wylde

June 5, 2017

A NEW AGE IN ENERGY?

As with most energy and cost efficient power alternatives, there’s a lot of misinformation surrounding solar energy — even when we’re faced with hard facts outlining their benefits. Consider the fact that it took nearly 30 years for fluorescent light bulb (also known as CFL) sales and dependency to rise, as Americans were unwilling to switch over from incandescent bulbs until 2010.

Tried and true sustainable products often sit on the market for a while before they become “trendy enough” to be purchased. But now, thanks to some promising developments from Tesla,(including some slicker-than-expected solar panel roofs) the value and importance of solar power is finally getting the momentum it so critically needs.

These moves are important because, not only is solar power cost effective, it reduces our reliance on fossil fuels, which is an imperative issue we need to tackle. Humanity’s current net emission is 37 gigatonnes of CO₂, meaning we’ll need a reduction of at least 700 gigatonnes to keep global warming within safe limits. By switching over to solar power, we reduce our carbon dioxide emissions by over 37 million metric tons. And while it might be hard to see past your own finances, switching to solar power saves the United States over $400 billion in healthcare and environmental cleanup costs. But back to your wallet: solar panels pay for themselves in six to 15 years and increase the resale value of a house by about $15,000.

But solar power technology is nothing new. In fact, a similar standard of today’s models has been around since the 1960s. And since that time, panels have only become more efficient, more dynamic, and more attractive. So, what’s taken us so long to consider the switch?

MAKING A CHANGE

It’s the myths that deter people from trusting in the technology. Most commonly, potential consumers worry that solar panels will not work in cold or cloudy climates. The truth is, they’re highly functional in cold climates, as conductivity is increased at colder temperatures. And, Germany, a country that receives half as much sun as the sunniest city in the United States, has the most successful solar power system in the world.

Now that Tesla has shown us how chic the solar panel roof of the future will look, skeptical homeowners will be more likely to make that change.

If you’re curious about the potential to save money and the planet, check out a solar power advocate like Understand Solar and get a proper estimate for your home. When faced with the facts, it’s hard to see it any other way: solar power roofs are essential investments for your home and the future. Fill out a cost estimate form and get access to exclusive deals in your area, and a fast and easy estimate to get things started.

Home solar power becomes a brighter prospect for many

By Sarah Shemkus

May 28, 2017

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Just out of view on the back side of Rob and Irene Kneeland’s Colonial house in Sutton, 28 photovoltaic panels are transforming light into power every time the sun shines.

The system came online in December. By March, the Kneelands’ monthly electric bill had dropped from $150 to $38.

“I imagine the next bill will be about zero,” Rob Kneeland said. “It appears that they’re performing as promised.”

Historically, installing solar panels was a pricey proposition — usually something only committed environmentalists with money to spend did. In recent years, however, improvements in technology, falling manufacturing costs, government incentives, and worries about the perils of fossil fuel dependence have come together to accelerate the adoption of solar technologies among everyday homeowners.

Between late 2013 and mid-2016, Massachusetts’ solar capacity more than tripled, from 362 megawatts to 1,174 megawatts, according to numbers from regional electric grid operator ISO-New England.

If you want to consider joining the surge, here’s how it works.

First, determine whether solar panels are feasible for your home. Generally, you will need a roof that isn’t facing north and doesn’t receive too much shade from the south, said Andrew Belden, senior director for renewable energy generation at the Massachusetts Clean Energy Center.

Your roof should also be large enough to accommodate at least 10 to 15 panels and be relatively new.

“You want to make sure you’re not going to be taking the system down in the next five years to replace your roof,” Belden said. Just about all installers will provide a free on-site assessment.

Next, study up on the basic economics of residential solar. In the past, leasing and power purchase agreements were popular ways for homeowners to get solar power. Under such arrangements, a business builds and retains ownership of a solar system then sells the energy produced to the homeowner.

But today, the price of a residential solar installation is about one-third what it was just 10 years ago, according to a report from the Lawrence Berkeley National Laboratory. At the same time, financing options have multiplied, making straightforward ownership more economically advantageous.

“More financial institutions are familiar with solar now,” said Tom Kimbis, interim president of the Solar Energy Industry Association, a Washington-based trade group. “Today, you’ve got lots of options.”

The median price per watt of capacity for systems financed through the Mass Solar Loan Program is $4, and the median installation size is 8.1 kilowatts. Those numbers suggest a new solar system could easily run more than $30,000.

Fortunately, several programs can help defray the costs. Federal tax incentives allow you to take a credit worth 30 percent of the cost of the installation. Massachusetts also offers a tax credit of 15 percent of the remaining cost after the federal incentive has been subtracted, with a maximum value of $1,000.

Together, these credits could reduce the cost of a $30,000 system to roughly $20,000 — still a pretty hefty total. To help cover that balance, the Mass. Solar Loan Program will assist you in locating a participating bank or credit union and, for income-eligible households, it also can provide further financial assistance.

Households below 80 percent of median income — the threshold is currently $87,183 for a four-person household — are eligible for a principal reduction of 30 percent. Those below 120 percent of median income — $130,774 for a family of four – qualify for a 20 percent reduction.

Some individual communities may have further incentives — DSIRE.org maintains an updated database of renewable energy programs, state by state

Once the system is installed, ongoing savings will come from two places: net metering and solar renewable energy credits, or SRECs.

When your system is producing more power than you use, the excess electricity flows back into the grid and your meter runs backward, deducting kilowatt-hours from your usage — and your bill. This phenomenon is known as net metering.

If your power is currently delivered by a utility company, your system will almost certainly be able to take advantage of net metering. Homes served by municipal electric plants, however, may not be, so research eligibility before moving forward.

SRECs are certificates representing the environmental benefits generated by your solar system. They can be sold to companies looking to meet regulations, boost their green credentials, or offset their carbon emissions.

An 8-kilowatt system could produce as many as 10 SRECs per year and, though prices fluctuate, one SREC can sell for well over $200. While homeowners can sell their SRECs on their own, many choose to work with aggregation companies, which pool many SRECs and then sell them on behalf of their members.

Once you understand the financial basics, it is time to start shopping for an installer. If you are interested in the Mass. Solar Loan program, start with its list of prequalified businesses. Make sure to contact several installers. But limit your search to companies that are solar specialists, rather than roofers or general contractors who have added solar to their menu of services.

Ask vendors questions until you are completely satisfied with the answers, Kimbis said. He recommended asking how many systems the company has installed in your area, and requesting at least three references.

A potential installer should provide detailed cost estimates, including expected annual production, available incentives, and projections of how long the system should take to pay for itself. Be wary of companies that offer vague assurances instead of hard numbers.

An installer also should arrange for local inspections, connections to the utility, and the paperwork involved in signing you up to receive SRECs.

Finally, once you’ve chosen a company, be prepared to wait. Solar is becoming so popular that there will probably be a delay before you can schedule installation.

“Crews might be scheduling six, eight, 10 weeks out,” Belden said. “There’s a lot of solar activity going on in the state.”

Sarah Shemkus can be reached at seshemkus@gmail.com.