The solar revolution in Pennsylvania and New Jersey has brought a significant advantage that can benefit homeowners in many ways. One of the primary advantages is the savings that every homeowner can enjoy by switching to solar. Unlike other investments that may take years to see returns, investing in solar panels can immediately reduce your monthly energy bills. This means that you can enjoy more money in your bank account every month while also adding value to your home.
By leveraging our extensive years of experience, we can confidently provide you with an accurate estimation of your annual and long-term savings based on a handful of key figures:
Calculating your net solar savings is a simple process that can be done either as an estimate during the design stage or as a regular check after going solar. This calculation simply involves subtracting your final solar energy costs from the incentives you’re eligible for, and then adding the savings you receive from using less power from your utility provider. Over time, the steady stream of income from incentives and reduced electricity expenses will eventually cover the initial cost of your solar energy investment. By doing this calculation regularly, you can track your progress and see how much money you save with solar energy.
Every home is unique, so it’s no surprise that the monthly and yearly energy usage varies greatly from household to household. The amount of solar energy needed to power a home largely depends on the household’s habits and energy demands. Once this is established, the solar energy capacity can be designed to meet the home’s specific needs. The design options for solar panels can vary depending on the home’s condition and layout. With careful planning and consideration, homeowners can select the best solar energy solution that suits their needs and budget.
There are two significant incentives for solar buyers in both Pennsylvania and New Jersey.
The ITC, or Investment Tax Credit, is an extraordinary federal program that has been around for over a decade. It provides first-time solar buyers with an incredible opportunity to receive a tax credit of up to 30% of the purchase price of their solar power system. This credit can be claimed on their federal taxes in the next two subsequent tax years, resulting in significant savings for the buyer.
Thanks to the recent passage of the Inflation Reduction Act, the ITC will be maintained through 2032. This means that more people will have the chance to take advantage of this incredible program and invest in solar power with peace of mind. Not only does this program help people save money, but it also encourages using renewable energy sources. This is a win-win situation for everyone involved!
SRECs, or Solar Renewable Energy Credits, are a valuable tool for homeowners and utilities looking to increase their use of solar energy in Pennsylvania. These credits are generated when a homeowner’s solar energy production reaches a certain level and can then be sold to utilities that use them to meet their renewable energy mandates. Essentially, utilities can “buy” solar energy capacity from homeowners, allowing them to meet their obligations without investing in their own solar capacity. For homeowners, SRECs represent a financial incentive for investing in solar power, as they can be sold for a profit. If you’re interested in learning more about how SRECs work and how you can take advantage of them, be sure to check out our SRECs page for more information.
Your ongoing savings directly result from the energy you generate and no longer have to purchase from your utility company. As you generate more energy, your savings increase as well. However, it’s important to note that a solar energy system can produce more energy than a homeowner needs at any given moment during the day. This is where the concept of net metering comes into play.
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.
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.