Let the Sun Shine In: Investments in solar energy can pay back big dividends.
Mar 30, 2012 02:19PM
By Susan Bloom
When Grace Mui’s husband, Richard, first suggested that they install solar panels in the backyard of their Chester home five years ago, she recalls feeling resistant. “He’d always been a big advocate of recycling, energy conservation, and other environmental practices and had wanted to install solar panels from the moment we bought the house,” she says. “But I wasn’t sure how they’d look and I was also concerned with the big cash outlay involved—even after applying the generous rebates that New Jersey was offering at the time, we were still $30,000 to $35,000 out of pocket. I couldn’t help but think about all of the other things we could do with that amount of money.”
After making the investment, however, Mui admits she’s never looked back. “Since installing the panels, we’ve never paid an electric bill, and the utility sends us rebate checks for any energy that we’ve generated but haven’t used,” she says. “Five years later, I think we’re at or close to breakeven on this investment, so we’ll get to continue enjoying the financial benefits of this decision for the life of the equipment while doing something good for the environment.”
The Muis are not alone in their vision and proactivity. With New Jersey’s higher-than-national-average kilowatt-hour utility rates and the availability of federal and state financial incentives helping to reward investments in solar technology, the progressive Garden State stands behind only California in its embrace of solar systems, which directly transform sunlight into electricity through the use of solar or photovoltaic cells.
“Since a 2006 BPU regulation, the state requires that its energy suppliers generate a certain amount of electricity by solar means every year, and this requirement keeps increasing,” says Greg Reinert, Director of Communications for the New Jersey Board of Public Utilities in Trenton, which administers solar programs through the state’s Clean Energy Program. “Suppliers adhere to this mandate by purchasing Solar Renewable Energy Certificates, or SRECs, which can be bought and sold in the open market, much like a commodity. The bottom line is that if you install solar panels on your property, not only will you ultimately enjoy free or nearly-free electricity, but you can net meter excess electricity back to the grid against the cost of electricity purchased while the solar array is not producing electricity.”
Though the aggressive rebates that the Muis enjoyed in 2007 are no longer available in New Jersey as of January 2011, and the SREC values are lower, Reinert says, “The SRECs system and federal tax incentives are what have really driven the current market for solar technology in New Jersey and are the mechanisms that allows these projects to be financed.” Despite the significant up-front cost, he confirms, “New Jersey is still installing more solar than ever, though the payback period is now longer.”
Of course there are many things to consider with such an investment. An accredited installer would need to determine the extent of the solar opportunity based on the layout/suitability of the property and the electric usage patterns of the residents, and the returns and payback period would be contingent on the size of the system and its generating capacity. “You’ll also want to consider such factors as the level of financial investment you can afford, how long you’ll be in the house, etc.,” Reinert says. Comparing the magnitude of a solar investment to that of “building an addition on a house,” Reinert says, “it’s not something you just leap into.”
That being said, over 14,000 solar arrays have been installed by businesses and residential customers in New Jersey since 2001 and represent over 650 MW of installed capacity. “Based on data in recent years, the payback on solar systems through SRECs is now up to 10 years,” Reinert confirms.
“Based on the length of time we expect to live in our house, we’ve been surprised and delighted by our investment,” Grace Mui shares. “It’s great for the environment and only enhances the value of a house for resale. The only down side is the initial investment,” she concludes, “but, as we’ve experienced, it will pay itself back.”
For more information on solar installations, SRECs, or any other renewable or energy efficiency upgrade, contact New Jersey’s Clean Energy Program by calling 866-NJSMART (657-6278) or visiting NJCleanEnergy.com.
Freelancer Susan Bloom writes weekly Health and Food features for New Jersey’s Asbury Park Press and specializes in topics related to nutrition, fitness and healthy lifestyles.