Switching to solar is good for the environment and your financial future. When you combine the enormous cost savings you realize on your utility power bills with the slew of government incentives available to solar buyers, the actual financial benefits leave you with five-digit profits.
You can use this guide to calculate your own potential savings and earnings from home solar solutions.
Savings on Utility Bills
The amount of money you save by not paying a monthly utility power bill will gradually accumulate to an enormous number. Let us help you calculate that.
You’ll need just two pieces of information to estimate your utility bill savings – your energy usage, the utility power rate in your area, and the annual utility escalation. You can get the former from your monthly power bills. We advise you to consider the power bills of the past 12 months, as they tend to fluctuate seasonally. Once you have them, calculate your household’s annual power usage. You can also get your utility power rates from your electricity bill.
Your annual expenditure on power is obtained by multiplying annual power usage and your utility power rate.
The average house in New Jersey consumes about 691 kWh of power per month, roughly translating into 8,292 kWh of power consumed annually. At an average rate of 27¢/kWh, we can estimate the annual power bills of an average NJ household as $2,238.84.
The actual rate for your household in Bridgewater would be different so you can use that figure.
The average estimate of $2,238.84 in cost savings each year would grow into $55,971 over 25 years, which is the minimum lifespan of most high-quality solar systems.
Now that $55,971 doesn’t even include the fact that utility rates are expected to rise 3% annually. Imagine locking in your power rate at 1995 levels – that’s the same thing solar can promise you when you sign up today!
Add the Incentives
The various government incentives can be estimated based on the installed capacity of your home solar.
If we consider the average NJ household, it will require a 7 kW system to meet the annual consumption of 8,292 kWh. Assuming an average home solar cost of $4.28 per watt (including all equipment and installation service), we estimate that a 7 kW system would cost roughly $30,000.
At this point, you can factor in the federal income tax credit, which will slash your expense by a flat 26%, or $7,800.
The state of New Jersey has a robust renewable energy certificate program, as part of which every time your solar system generates 1,000 kWh of energy, you earn an SREC. An SREC is worth $90 for 15-years… At 8,292 kWh of power generation annually for 15 years, this translates to 124,500 kWh or 124 SRECs. Since SRECs are fixed at $90, you know that the value of these, 124 SRECs will be worth $11,160! This is in addition to the net metering income you’ll generate by diverting excess solar power to the grid. Once you add sales tax waivers and property tax waivers to it, your savings increase even more.
Depending on your installed solar capacity, you may end up in excess of $100,000 in savings alone over the life of the equipment.