New Jersey residents are amongst the most progressive in the nation and it shows in the widespread adoption of solar with over 1GW of solar installed. With growth, there is choice and a drumbeat of conflicting marketing communications on TV and digital media about the merits of these choices. Working through the clutter of information, we have arrived at these top 5 Home solar options for New Jersey single family home owners :
1) Direct Purchase
The best way to go solar is to own your solar system. The combination of Federal and New Jersey’s State incentives work handily to generate enough savings and earnings to recover your investment in about 5 years.
Here are the numbers to help you make the choice. An average single family home in NJ spends about $200 a month on electricity. A 10Kw solar system with a price tag of $30,000 (at a price of $3 a watt) will produce enough power to reduce your utility electric bill almost to $0 a month.
Your initial investment of $30,000 will yield a tax credit income of 30% i.e $9,000 dollars. State incentives (SREC’s) will earn about $2,400 per annum and your savings from electricity bills is another $2,400 a year.
You solar system will recover your 30K investment back in less than 5 years and you will continue to harvest the benefits of SREC earnings and savings for many many years thereafter. So, if you have a CD or a home equity line of credit you can use, go ahead and buy your solar system.
Solar Installation companies are local and are easily found through a google search. Demand and negotiate a good price, while remembering that a $3 per watt price for a roof solar installation is a reasonable benchmark. Most installers will provide 15 year bumper to bumper warranties on their installations.
A note for potential solar buyers; the NJ Pace program offers financing options through local and township property tax initiatives and is definitely a resource for all things renewable.
2) Direct Purchase : via payment plan
If you are not able to access a line of credit or don’t have the capital to invest in a solar system your next bet is to ask your solar installer for a payment plan.
Most installers have financing arrangements with partners like Sungage to finance your solar system. All homeowners with credit scores of 690 or more easily qualify for these programs. The cost of the system goes up because of closing costs and interest, but it is still an excellent option.
The 10KW system discussed above when purchased through a payment plan will cost about $32,000 with closing costs. Financing terms are usually for 15 years at about 6.5% interest and that translates to a monthly payment $195 per month. That expense is offset by your earnings from SREC’s of about $200 per month. You actually end up making $5 a month after going solar while getting rid of your pesky electric bill completely.
The only variable are the SREC prices which are market driven and your earnings stream could go up or down. However, they have been steady for the past two years at around $225 or so per SREC Trade.
3) 15 year Solar Lease
This is the most popular solar option available in the market. It is a fixed payment solar lease plan. Your solar system is owned, operated and maintained by the Solar Installation company and you pay them a fixed amount every month for your power. The cost of solar power is usually 50% lower than the cost of regular utility power.
In our example, if you decided to go for the 15 year solar lease, your electric costs from solar would reduce to $100 a month from the current $200 a month. This program transfers ownership of the solar system to you after 15 years. You no longer have to pay for solar electricity from the 16th year onwards. This program is based on additional incentives offered by the NJ electric utility companies PSE&G and JCPL and is not offered by all solar installers.
Search and ask around to find a local installer who offers the 15 year fixed solar lease – it is the best Solar Lease available for NJ residents. Ampericon at Princeton, NJ are a leading installer with the 15 year lease option.
4) 20/25 year Solar Lease
This is the traditional solar lease offered by the national solar installers like Solar City and and through the Home Depot and Lowes. This program locks you in for a much longer period. The benefits of a large national player are significantly offset by the longer term of the lease and higher prices.. Monthly prices are usually higher than the 15 year lease as they are not backed by utility incentives. And in many cases they come with the dreaded 2.9% escalation clause.
5) PSE&G Solar Loan
The final option is rather local and only for customers of PSE&G electricity. PSE&G has an excellent loan based program for purchasing the solar system.
PSE&G buys your system’s SREC’s by paying you in advance for 10 years of your solar systems SREC production. This advance payment accounts for about 40% of your solar systems cost. Since, you are get another 30% from the tax credit incentive of the federal government, your net out of pocket while buying a solar system through this program is just 30% of the systems cost.
In our earlier example, the net out of pocket for the 10KW solar system would be just $9,000, a very handsome deal. As a potential buyer through this program, you will have to manage your cash flows as the payments from PSEG and the federal tax credit take between 6 to 9 months to materialize and thus, you will have to float the full amount of $30,000 for upto 9 months before you get back $21,000 from your tax refund and PSE&G.
Now for those of you who don’t have a single family home or are looking for something slightly less expensive you might just like the option of going solar by buying a solar generator. Here are a selection of the best solar generators.
About the author: Mike Bennet, is solar energy professional with eight years of marketing and installation experience. He is avid and passionate about the adoption of solar and related technologies. He blogs at mysolarhome.us.