We had Green Sun Energy Services install our Solar System 3 years ago and it has worked out very well for my family. Everything has worked as expected: in terms of our Utility Bill being much lower and the SREC program working so well that it has been a truly outstanding benefit. The whole team was outstanding in every way - Customer Service, skill level and expertise, and follow-up/responsiveness. They worked very hard to guide us through the process and I am grateful to them for their diligence, persistence, and work ethic. - Desmond S. Matawan, NJ | Review Source: Angie's List
Going Solar Doesn’t Have To Be A Scary Process
After you get past the mechanics of how solar works, you should come to realize that “going solar” is more like making a financial investment than doing a capital improvement on your home. Sure, we're bolting solar panels to the roof of your home… But, aside from the great environmental benefits, the primary function of solar is to save you money --- or more importantly make you money.
So, like any investment, you should start by (1) understanding the components of your solar investment (costs, savings, income); (2) defining your investment goals & time horizon (short term –vs- long term); and (3) what solar program is best for you (e.g. do you need financing or are you better off paying cash). Lets examine each of these in a bit more detail below:
What Are The Components Of Your Solar Investment?
The first thing we need to understand is what contributes to the cash flow of the investment. In simple terms, we need to examine the following equation: income + savings [cost avoidance] – cost = profit. Let’s break this down into detail:
Income is generated through the sale of Solar Renewable Energy Certificates (SRECs). As registered SREC aggregators, we create, aggregate, sell and dispense the proceeds of SRECs to our clients that purchase systems from us. SRECs provide our clients with 15 years of income averaging about $0.15 of net income for every kWh of solar energy produced.
Savings [cost avoidance] is money that you save from not having to pay the utility company for electricity. Fully delivered electric rates (generation + supply) range from $0.125 to nearly $0.20 per kWh in NJ, but we will use $0.15 per kWh for our example.
Cost for a purchased solar panel system is the total principal and interest associated with paying for the system. The principal is determined by calculating the fully installed system price less 30% for the Federal Investment Tax Credit. Interest is only included for projects that require financing. Cost for a solar lease or power purchase agreement (PPA) is the total of all monthly payments (including annual rate increase escalators) for the term of the agreement.
What Are Your Solar Investment Goals?
Most homeowners considering solar are focused on 1 of 3 goals:
Long Term Return On Investment
For individuals that have access to capital (money sitting in their savings account or underperforming investments), investing in solar is a great option. The goal is to get the solar panel system to pay for itself as quickly as possible. This is called the payback period (which can range from 4 to 8 years depending on site conditions)… The shorter the payback period the greater the long term profit… because once the system pays for itself all of the saving and income is yours to keep!
EXAMPLE: Let’s assume that the net system price (after tax credit) for a system generating 1000 kWh of solar per month is $24,593. To calculate the payback (using the information for the Components of your solar investment described above), we add $0.15 /kWh in SRECs to $0.15 / kWh in energy savings to come up with $0.30 / Kwh. We then multiply the $0.30 by 1000 kWh per year to come up with $300 per month. Next we divide the net system price of $24,593 by $300 per month to come up with a payback period of 82 months or 6.8 years. Assuming a 15 year time horizon, your total profit will be $29,407.
Cash Flow (creating a profitable annuity)
Here we want to use the bank’s money to fund our investment --- with the objective of being cash-flow positive within the very first year of operation. We offer over 100 loan packages with terms ranging from 6 months to 20 years. Our most common loan term is 15 years, as this typically generates a consistent cash flow starting in the very first year. Let use the same system as described in the example above. Like in the earlier example we add $0.15 /kWh in SRECs to $0.15 / kWh in energy savings to come up with $0.30 / Kwh. We then multiply the $0.30 by 1000 kWh per year to come up with $300 per month. To finance this system for 15 years our loan payment will be $169 per month (assuming a 740+ credit score). To calculate cash-flow we subtract $169 from $300 to produce $ 131 of positive cash flow a month. Then we multiply this by 12 months as see a positive cash flow of $1,572 a year. Simple math says that by the time the loan is paid off in the 15th year, you will have produced $23,580 in profit.
Generally speaking, solar leasing programs attempt to focus on saving homeowners money. In our opinion the only homeowners that should enter into a lease agreement are those that cannot take advantage of the Federal Incentive Tax Credit. That being said, $0 down lease or PPA agreements include “free” installation in exchange for purchasing the solar energy produced on your roof from the leasing company. Let’s assume that a fixed rate 25 year lease can be negotiated at 0.12 per kWh. Your monthly savings will be what you were paying ($0.15 / kWh) minus your lease rate ($0.12 / kWh) which equals $0.03 / kWh. Now if we multiply 1000 kWh by $0.03 / kWh you will save about $30 / month… multiplied by 12 months is a total savings of $360 in the 1st year… and just $5,400 savings within 15 years.
What Solar Program Is Best For You?
The primary difference between us and our competitors is that we focus on creating long-term value for our clients. Rather than just selling you solar and completing a "transactional" solar panel installation, we developed solar programs that deliver both short and long term economic and environmental benefits to our clients.
SolarBase™ - Solar Purchase Program
The cornerstone of our approach is the SolarBase™ Program. SolarBase™ was designed to provide our clients with a long-term solar energy program (where we share in the risk and reward of the system's performance) --- not just a transaction. To this end, each of our SolarBase™ programs include fixed rate financing (if you need it), customized design, top-of-the-line products, superior installations, an industry leading workmanship warranty, and 15 year of the following post-installation services:
- Remote system monitoring
- On-site maintenance & support
- Annual system inspection and panel cleaning
- Full service SREC management, aggregation and brokerage
- Money back energy production guarantee
LeaseBase™ - Our Solar Leasing Program
LeaseBase™ is our solar leasing program. We utilize the same exceptional designs, top-of-the-line products, superior installations as our SolarBase™ but the leasing company manages the system and relationship after the system has been installed and approved by the utility.
Installing Solar Panels In New Jersey
Installing Solar Panels is a great way for New Jersey families to offset the rising cost of electricity. Here's why:
- The average New Jersey solar home gets about 50% more sunshine per day than Germany, the world leader in solar installations.
- According to the Department of Energy, New Jersey electricity rates have increased by about 56% in the 10 years ending in 2012! A New Jersey solar panel system is a great way to protect your family from volatile electricity prices and save thousands in energy costs over the lifetime of your home solar system.
- Historically, NJ has gotten about half of our power from nuclear plants and import about 30 percent from out of state. The bulk of our expanding electricity needs have been met by coal and natural gas. All of these factors keep New Jersey's electricity prices in line with the surrounding states, which remain the highest in the nation outside of Hawaii.
- New Jersey established the goal of obtaining 4.1 percent of its electricity from solar by the year 2028. Cumulative per-capita capacity here reached 136 W/person, with 27 W/person added in 2013. A total of 240 MW of capacity was added in 2013, bringing New Jersey’s cumulative capacity to 1,211 MW (or 1.2 GW).
- Part of New Jersey’s robust solar growth can be attributed to having a far more developed renewable energy market in place than others with sunnier climates. New Jersey has one of the most aggressive Renewable Portfolio Standards (RPS) in the United States. Electricity providers must get 22.5% of their electricity from renewable sources by 2021. In addition, we must also get a significant portion from solar power (at least 2,518 gigawatt-hours by 2021). With great solar incentives, it's a great time for solar in New Jersey!