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Show Me the Solar Money

How much will switching to solar actually save you?

I really appreciate the many comments posted in response to my last article. The common thread echoed was that you agree wholeheartedly with the “solar ideal.” Well, welcome to the majority! Did you know that more people in the U.S. love solar than they do puppies? It’s funny, but true; the ideal of living in a clean environment, free of fossil fuels, with full energy independency is a notion few could argue with, as if loving a puppy could be arguable.

But here’s the challenge many of you communicated loud and clearly: “Show me the money!” While an ideal world is something we all dream about, let’s get real. If the dollars don’t add up, there is really nothing to talk about. I get it!

Recently, I spent two days at a national solar conference in Philadelphia, where Rhone Resch, the president of America’s Solar Energy Industry Association (SEIA), highlighted the solar industry’s importance to the U.S. bottom line. Mr. Resch declared solar energy the fastest growing industry in America, pointing to a recent report that found that U.S. solar revenue grew from $3.7 billion to more than $6 billion this past year — an impressive growth rate of 67 percent, while the rest of the U.S. economy unfortunately grew at less than 3 percent. With the numbers working in our favor, I am more than happy to take on a good challenge. So roll up your sleeves and prepare to see the sunshine…

On Long Island, we have a number of circumstances that make going solar a very attractive financial investment. First off, our utility rate is amongst the highest in the entire country, so any measure that you can take to reduce your consumption from LIPA will be a plus. We also live in an area that scores very well on the solar rating scale, meaning the levels in our region are high enough for good solar productivity. And lastly, there are these very motivating financial incentives:

  • A 30 percent tax credit based on the gross cost of your installation given by the federal government.
  • A tax credit of 25 percent based on the net cost of a solar system, up to a max of $5,000, offered by New York State.
  • A rebate of $1.75 per watt DC, up to $17,500, offered by LIPA’s Solar Pioneer Program.
  • Net metering: If your solar system produces more energy than your home consumes, your meter will spin backwards, sending excess electricity back into the grid, which means you’ll get a credit on your bill.
  • A New York State sales tax exemption
  • A 15-year property tax exemption

Now, let’s assume your average monthly electrical bill runs approximately $200. As long as your home has approximately 400 square feet of available shade-free roof space (facing south, ideally, but east or west will work well too), you’re good to go.

A 4,000-watt DC system, which is a mid-size range solar system, costs approximately $25,600. I can tell you that I recently bought my system for much less, but for this example let’s keep things on the conservative side. Once we deduct all the incentives, rebates, and tax credits I mentioned above, you are left with a net cost of $7,500.

A system this size will reduce your bills by 40 percent, leaving you with an annual savings of $1,650 per year or $41,000 over the life of the system. In simple mathematical terms, if you were to invest the $7,500, you will recoup your full investment in a matter of just over four years. Keep in mind, the minute the panels are turned on, they start putting money back into your pocket. You will see a return from day one!

As icing on the cake, if you decide to move before you recovered your investment, your property value will have increased by close to $20,000, leaving you with zero risk.

And let’s not forget that yummy cherry: your solar system is reducing your carbon footprint. How exactly? Well, by substituting buying energy from coal, nuclear, or oil with sunray energy, you are contributing to our environment with the equivalent of planting ¾ of an acre of trees each year! That’s quite a lot of manual labor that you just spared yourself, but you can feel awfully good about it and your children will thank you!

So, now what do you think? If the dollars make sense but are still a bit high for your comfort level, no problem — many contractors offer fantastic finance programs and third-party leasing options that you can take advantage of to reap the benefits of solar energy and not have to spend a dime out of pocket.

How did I do? Hopefully, I stood up to the challenge. I’m sure I will hear back from you.

If you live outside of the Five Town area, I can help you too, but with more than 3,000 utility providers across the United States, each with its own set of rules, regulations, rates and incentives, I would need to know where you live. With that information, I can generate a personalized report that outfits your specific parameters. You are welcome to visit www.EcoOutfitters.net and leave your details or come back in May for our official launch.

Before I leave you, I want to remind you that Earth Day just passed us on April 22. Even though it's over, take a moment and consider one action that will help the environment and try to add it to your daily routine. It doesn’t have to be installing solar panels on your roof — it could be as simple as closing the faucet while you brush your teeth.

The team at EcoOutfitters is bringing a solar program to a local Five Town school. I believe there is no better way to “pay it forward” than to teach our children how to grow up and have the tools to make healthy, clean, sustainable and responsible decisions. On May 3, children at the will learn the ins and outs of solar and sustainability. Stay tuned for some “solar talk from the mouth of babes.”

I hope everyone had a very happy Passover, Easter and Earth Day!

Let’s celebrate liberation, protect creation, and cherish our precious Earth! Until next time ... may the sun keep warming your heart!

Clem April 26, 2011 at 06:29 PM
I note that nobody considers maintenance in their cost/benefit calculations. How about the cost of maintaining a roof that you have placed 200 steel bolts through? Or what happens to your savings when one of your $4000 inverters bite the dust? Sorry, but destroying my roof and installing $25,000 of equipment on my home that requires constant upkeep should return a lot more than $1500/year to be worth my time and work. The only people really making money on this feel-good scam is the installers' salesmen like the writer of this article.
Ralph V. Russo April 27, 2011 at 03:19 PM
Such a shame you are so “turned off” to solar, the great thing about a solar system is there are no moving parts and is very low maintenance, since we don’t live in a dusty climate it is not necessary to clean your panels too often. In fact, many panel owners never clean their panels and rely on the rain to do the job. Since your system is expected to produce a certain amount of power each month, the solar monitoring system can tell you if your system is not performing as expected (this info can be accessed on the web or from your iphone, depending on the device installed). No time and no work necessary. In terms of your roof, the solar panels actually protect and preserve the portion of the roof they cover. The panels are attached to a railing system so they can be easily removed and the connections to your roof are fully waterproofed with sealants and metal flashing. The panels are warranted for 25 years with a loss of about half a percent a year in efficiency and the inverters carry a manufacturer’s warrantee of 10 years.... sorry you have been mis-informed .
Eileen Coles April 27, 2011 at 04:41 PM
All investigation I've seen and personally conducted on the subject of solar power on LI seems to involve selling power back to LIPA. Why is that uncool? Simply this: because you don't get to have a say in how much what you are selling is worth. The buyer is the one who determines the price. How's that again? Can I do that with my next new car? Why should LIPA be allowed to do that with power my system generates? I would like to see complete off-the-grid solutions being discussed. LIPA may have changed it's name over the years but generations later we are still paying for that abomination known as Shoreham in our inflated utility bills, and I for one am sick and tired of it. Long Island has been held financially hostage to this federally sanctioned utility monopoly for decades. Off-the-grid solar needs to go mainstream. The only major corporation in NYC which remained up and operational during the blackout of August 2004 was J. P. Morgan. Why? Because they were the only ones with off-the-grid power. Anyone who talks about contingency planning, "homeland" security and sustainability in the face of a natural disaster or an act of war or terrorism should be seriously looking at complete off-the-grid solutions.
Mike April 27, 2011 at 06:47 PM
Thanks for the update on the cost. However I would disagree with the out of pocket cost being reduced to $7,500. Some of that money you are getting back are credits on your taxes. You still have to put out more than the $7,500 to have the system installed. Based on the numbers you gave. The system starts at$25,600. The LIPA credit is $7000. Leaving you with an ut of pocket cost of $18,600. You can then take a $7,680 credit on your Federal taxes. And then a $2,730 credit on your NYS taxes. Depending on your income on withholdings this will hopefully give you a bigger refund to offset the cost. However the out of pocket is still $18,600 which could be the biggest hurdle in getting it done.
Clem April 29, 2011 at 03:43 PM
Hi Ralph. No coincidence that you have the last name of the writer of this advertising piece is it? I'm in this line of work. What you are saying is patently false. No maintenance? We've replaced a dozen $4000 inverters that were less than three years old. And I have a list of roofs that were turned into leaky messes after solar panel brackets were bolted through them. Think the roofing company will back their warranty? You have either a commercial interesting in hucking this crap, or you're simply an enviro-loon who feels others should spend massive amounts of their money for what you want them to do. There's simply no economic sense to all this at this point. If there was, they'd be all over town.

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