Can You Feed the Utility Grid and Make Money?
Depending on the type of agreement you signed, there are a few ways you can financially benefit from installing a solar panel system on your roof or on your property. If you qualified and signed up for a lease, loan or a power purchase agreement (PPA), the installation is free and you simply pay a lower, predictable or locked-in monthly rate. The solar company you’re working with will install the system and handle all the maintenance and monitoring — but will also reap the benefits of the additional federal and state incentives that are available which has allowed solar to be more and more affordable over the last decade.
Leases, loans and PPAs are great options for average middle class homeowners who are looking to generate cleaner air while saving some money each month. If you’re in a financial position to be able to purchase the system for your home, however, you have an opportunity to make money in a few ways. If you’re the owner of the system, you can take advantage of the 30% Federal Investment Tax Credit (ITC); reducing the cost of the system by that percentage. Depending on the state you’re in, you may also receive an additional tax credit (for instance — New York state currently offers a 25% tax credit up to $5,000).
You are also able to sell SRECs (Solar Renewable Energy Credit) as a solar power system owner. For every 1000 kWh of solar energy generated, 1 SREC is earned. The value of the SCREC has fluctuated over the last few years, but it’s better to hold onto them for a bit until you see the best price and sell them before their 3-year expiration date. State incentives like SRECs are on a state-by-state basis, and states that offer incentives like this rate higher on the "solar scale". This means that its' easier to go solar in those states than in others.
For system ownership, we’ve now covered federal and state incentives as well as SRECs that are earned per each 1000 kWh. Besides these perks, if you produce more power than you use, then your utility owes you money. You can sell these credits to them, or store them and use it later. The average solar power system owner can earn up to $3,000 per year with all of these benefits. If you have some money stored away and you can spare it, it may be worth investing in. Depending on the initial value of the system, how much money you can earn back from your utility company, and how much lower your monthly electric bill is overall, your return on investment could start rolling in within 5 or so years from your initial purchase.
Whether you own, lease, or choose a power purchase agreement, there are always benefits in it for you — there will always be a lower electricity bill and peace of mind that you’re doing your part to improve the environment for future generations. The main reason lease or PPA works best for most homeowners is that its' more feasible from a financial perspective, and it appeals to the majority demographic throughout the US.
Many installers offer solar for literally no money out of pocket over the course of the agreement; you just need to qualify based on how much electricity you use, your roof space, azimuth (the direction your roof is facing), shading, among a few other factors that your solar representative can review with you. The result is a 20-25 year agreement that helps you save money while producing cleaner energy. If your system overproduces with lease or PPA, as we've explained in our net metering piece, you're able to push that clean electricity back into the grid and build a bank of credits with your utility company. That bank of credits can then be tapped into when the days are cloudier or during the winter when the days aren't as long so you can continue using solar energy even when your system isn't producing as much. Regardless of lease, PPA, or purchase, there are different ways to feed the grid and optimize your clean energy usage, but you only "make money" if you own the sytem. We can help you find a local installer that can lay out all of your options for going solar.