You know when you want something bad enough you can taste it? Well, I have always wanted a solar system. Every time, I see those shiny grids on top of a building, I swear they are winking at me. They are such a tease knowing that I could not afford the system. In the last year or so, I noticed that Home Depot installs solar. The Company has partnered with BP Solar. Okay, I thought, here may be my chance to install a system. They surely would have to be more affordable than Joe local solar installer. Boy was I wrong. So, a stick to Home Depot.
Let me give you some background comparing Joe local solar installer and Home Depot. In NJ, a 10KW system conservatively produces 11,500 kilowatts a year. When I started building my house five years ago, you could obtain a 60% rebate but you had to come up with the balance. I don’t recall the kilowatt per hour charge back in 2004, but I remember that I would save about $1800 in yearly savings. This is about a 16 year pay-back excluding buying a new inverter in seven years.
The program was so successful that NJ pulled the plug on the 60% rebates. If I recall correctly, the Board of Public Utility said all the money allocated was spent. How was I going to pay for solar?
Fast forward to today. My utlity company does not offer any rebates. However, the state offers a $1.75 per kilowat rebate. A local NJ installer (“Joe local installer”) gave me the following information : A 10KW costs about $77,500 There is an additional $.25 per kilowatt rebate for using a solar system made in NJ. Joe local installer told me there is only one company who can qualify for that rebate and their panels are not efficient. He surmised that the State is trying to lure more solar companies to move in. Therefore, I am limited to a $17,500 credit.
So here is the math:
Cost of the system: $77500
Less rebate ($1.75) ( 17,500)
Less 30% tax credit: (18,750)
Cash outlay: $41,250
Based upon 16 cents per kilowatt and 11,500 killowatts generate, I will generate $1840 of electricity. (BP solar has a solar savings estimator in which you can plug in your zip code. They concluded that my 10 KW system would produce 12, 071 killowatts.)
Note, the tax credit does not come back right away. It comes back the following year when you file your taxes so you will still have to outlay the money.
In addition to the rebate, as an owner of a solar system, I can trade my SRECs, which are tradable certificates earned due to the amount of solar energy that I produce.
“SREC stands for Solar Renewable Energy Certificate and is a tradable certificate that represents all the clean energy benefits of electricity generated from a solar electric system. Each time a solar electric system generates 1000kWh (1MWh) of electricity, an SREC is issued which can then be sold or traded separately from the power. This makes it easy for individuals and businesses to finance and invest in clean, emission free solar power,” according to the New Jersey Clean Energy Program.
The NJ SRECs are currently trading at $680 for each 1000 kilowatts produced. However, Joe local installer used $650 for argument sakes since SREC is a commodity. PSEG, another NJ utility company, is taking a more conservative view and estimating the SRECs at $450 per 1000 kilowatts produced. So, yearly payouts can be anywhere from a low of $5175 to a high of $8160. Given the range of SREC payouts plus the free solar electricity generate, my payback would be anywhere from 4 1/2 to 6 years. Not bad if I had $60,ooo to outlay at the beginning.
Back to Home Depot/BP solar. Wouldn’t you think given the giant that Home Depot is that they would be able to obtain an amazing price to install solar? Economy of scale? Kind of like the Walmart approach to buying. Boy, was I wrong. The system actually costs more than Joe local installer! Home Depot wants $80,000.00!
When I asked why the system was more expensive than my local person, the answer was basically you will have peace of mind that if Home Depot installs the system, you know they will be around for a long time. A big store brand, so to speak. Wait a second. This is why Home Depot’s system is more expensive. Quality and assurance? Are they Bloomingdale’s?
What about financing? The website claims that they have financing available. When I inquired about it, I was told that you can obtain a Home Depot credit card and the first 12 months there is no payments or interest. Thereafter, the credit card rate is 24%. Who is going to do this?
On the website, Home Depot has the following quote in their solar installation section:
“I do a lot of business with Home Depot. They give me the best price and the best service. It’s a very good feeling that they’re going to be checking up on it and making sure its working right.”
Pleezzzze! Well, we know that’s not true. I have emailed someone at BP Solar so I will keep you informed as to why Home Depot’s system is more expensive.
In the meantime, Readers, any thoughts? Why can’t Home Depot provide solar for a lower price? Margins too thin?
Photo by OregonDOT.
Similar Posts:
- 1BOG Brings Discounted Solar to New Jersey. Your Area Could be Next.
- Cheap Solar–Is this For Real?
- Gore’s Message to Repower America
- My Advice About Geothermal Energy Ownership
- To Geothermal or Not, Is One Reader’s Question
If you enjoyed this post, make sure you subscribe to my RSS feed!
Loading ...
{ 13 comments… read them below or add one }
I’m not sure about the rest of the pricing but the electric company buyback rates sounds right. The prices fluctuate daily, sometimes hourly according to supply and demand locally and across the country. All electric companies are required by federal to sell their extra power to those who need it.
Hey There,I think you could try to buy the solar panels from china solar panels manufacturer and ask a local installer to install it for you ,It will be much cheaper.
Anna, I love this post. It should be required reading for every solar marketer. It is still too complicated to buy solar. I know how passionnate you are about this – and you fit the profile of consumer who should be able to get this done, no problem. The solar industry needs to take a lesson from the razor manufacturers and the cell phone manufacturers – they gave the hardware away. Classic marketing lesson. In fact, the leading COMMERCIAL solar provider adapted the same strategy – long term leases for the hardware. Don’t worry, this will be fixed soon, I’m sure… ! Then I’ll look forward to reading your posts about your solar roof!
Very true about the financing from The Home Depot. Our company works with Home Depot. We are the “Joe Local Installers” in this neck of the woods. And when THD customers call us, I am embarrassed to tell them about the Home Depot “financing” offer.
It is also true that THD doesn’t offer a better price than we (local installers) do. In fact, we use our standard BP pricing system and THD takes a chunk of that. So, we end up making a lot less than if we’d sold the system on our own.
The one advantage to having solar being sold in The Home Depot, is that is does get more people thinking about it and hopefully doing research on their own, as you have.
Thank you for your post, as Lynn said, it is helpful for us Marketers…
If the Home Depot wants to benefit from solar, they should start by covering the 100’s of acres of flat rooftops they have with photovoltaic cells. Like it or not, if you want to benefit from the solar energy boom, you need to walk the talk, and we all use Google earth to plan projects, so yes, we can see the top of your buildings!
If BP and THD want to partner, they should start right there.
Alex, good point. I agree. Walk the Talk. Anna
I attended their pitch and I was almost sold on it till I saw the PSE&G loan calculator for the same DC wattage that BP solar was installing. The cost was a whopping $5000 less than BP solar. I called up the BP solar marketing rep and she hasn’t gotten back to me yet. I am very close to cancelling this installation.
Anup, let me know what the BP solar person says. Home Depot gave me the name of someone to contact over at BP Solar. However, the email address bounced. Anna
Anna:
I just returned from vacation. I have emailed Cindy Pitone my rep to cancel the contract. I have repeatedly tried to contact BP-SOLAR via Cindy P. I have not received any response from them. BP-Solar/Home Depot installation costs are a whopping $5000 higher then the cost calculator shown on PSEG website for my DC wattage (6300). THe DC wattage from solar panels is what drives your ultimate costing and produces equivalent KWH for your home via the inverter. Cindy P had indicated that I can cancel this contract anytime if I am not comfortable. I am canceling mine!
Try these guys for buying the materials and see if your installer will do the work. A lot of rebates require a licensed contractor like here in AZ with APS my electricity supplier.
DM Solar
http://www.dmsolar.com/tu10grsy.html
They have a 10.4KW grid tie system for under $35K
Scott, do you know what kind of solar panels that are being sold and the yearly output expected. How do you find licensed installers? Anna
I tried to purcahse a system from BP in April 2009. Never istalled it.. Nothing but lies.. they are not paying their contractors on time and the work has been shabby. The work for mine was farmed out to a company in Long Island NY.. They sent plans and they were for a NORTH facing roof. DO NOT BUY FROM THEM!!! I went to a local company, had more 10% wattage put in at 10% less.
They were using greenenergy people out of Cherry Hill.. salesmen are quitting and they are bunch of liars!
this is strange — we entered a bp solar agreement also last summer and are at the same place as the person who posted yesterday — not sure where to go from here as we have to start paying on a home equity loan for the idea in a few weeks . . . any ideas? do we try to find a local installer ourselves? we are unsure of how to go about all the “rebates,” “tax credits,” and SRECs that were promised us . . . is any of it true? if so, how do we start the paperwork? we still believe in solar (in general)