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.