Preliminary Estimates and Finding Your True Savings
A significant advantage from the solar revolution in Pennsylvania and New Jersey comes from the savings to every family that takes the leap. It is one of the few investments you can make that can add home value while also leaving more money in your bank account every month.
With years of experience, we provide estimated annual and long term savings based on a few key figures:
- The range of purchase costs tied to our detailed proposals minus the incentives received.
- The projected annual and lifetime solar energy production. NOTE: We are meticulous and conservative in estimating production. These figures will include realistic weather predictions and more importantly they will incorporate the manufacturers’ confirmed performance changes with age.
- Knowledge of your specific utility’s pricing, both current and future.
Your True Net Solar Savings
Your net solar savings is simple calculation, whether an estimate at the design stage or something you check every month after going solar. It is the difference between your final costs and the incentives allowed plus the ongoing savings through reductions in power purchased from the utility. The steady income from those incentives and the savings from reduced electricity expense eventually return your solar energy investment cost.
Every home is different to some degree. The monthly and yearly average energy demand depends heavily on the family and their habits. This sets an initial solar energy capacity design target that is then guided by what each home’s design and condition may support. Design options are produced which can vary. Visit our page to learn more about solar energy system financing.
There are three significant incentives for solar buyers in both Pennsylvania and New Jersey.
Investment Tax Credit (ITC)
The ITC is a decade old federal program that allows first time solar buyers the chance to credit 30% of their purchase against their federal taxes within the next 2 subsequent tax years. With the passage of the Inflation Reduction Act, the credit will be maintained through 2032.
Solar Renewable Energy Credits (SREC)
SRECs, also referred to as Solar Alternative Energy Credits – SAEC – in Pennsylvania, are certificates generated when specific solar energy production levels are reached. They were established to allow utilities to meet renewable energy mandates without installing solar capacity under their ownership. They are “buying” capacity through certificates from homeowners. See more details about SRECs at our page.
Your ongoing savings are derived from the power you no longer must buy from your utility. Of course, the more you generate the more you save. However, a solar energy system can produce more than a homeowner needs at a given moment during every day. So a program called net metering was established to address that.
Net Metering is the primary mechanism that allows for the monitoring, tracking, and utility reimbursement of the power from a solar energy system. Because a solar system generates most of its energy during the middle of any day, this provision allows the owner to “send” excess power to the grid that they can later “take” from the grid. Whenever there is more sent in a year, the rules assign a purchase value. Check out this short informational video below and see more about net metering in our post.
One way to look at net metering is to consider it an energy bank. Your bank is the power grid. Throughout a specific 12 month billing period, the customer is depositing into the “utility bank” any momentary excess energy that cannot be used. At a later time, that energy is withdrawn when solar generation is not sufficient. In our region, this excess solar energy builds substantially during the months with the longest days, and is used during the months with the shortest days – the winter.
At the end of the 12 month period, each state addresses any accumulated excess – or sometimes called net excess generation (NEG) in order to credit the homeowner for their solar energy. This is the first time your solar energy is given a monetary value as follows:
In Pennsylvania, customers are compensated for remaining NEG at the utility’s “price-to-compare” around the end of May each year.
In New Jersey, customers are compensated for remaining NEG at the utility’s “wholesale rate”. The customer can set their anniversary date one time. Exact Solar recommends that our customers do so in a way to best deplete their “energy bank”, so that they get maximum value for the 12 months of solar energy production. While transacting into and out of the “bank”, you are reducing your billing at a retail rate. Whatever remains at your anniversary has the lesser, wholesale value. This normally means the month of February is ideal for most customers, when the “bank” has been reduced or nearly depleted throughout the shorter days of the winter.