Cost analysis for a sample system in New Jersey
In New Jersey, there are 3 components to the solar incentives that are available:
- Federal 30% Grant/ITC – no cap
- 5 Year MACRS Depreciation – with 50% Bonus Depreciation
- SREC’s- Currently trading at $655 each
A typical 40kW solar energy system in these counties might look like this:
*ITC stands for Investment Tax Credit or Income Tax Credit
Cash Analysis
A 40kW system would generate approx. 50,000 kWh/year or about $8,000 year. It will also generate 50 SREC’s which are currently valued at $32,500, making your 1st year savings $40,500.
- If you paid cash for this system, you would break even after Year 3 and would accrue savings of $524,634 over the system life.
- Utility Savings over system life of over $356,000
SREC Savings over first 15 years of over $397,000 - IRR of over 17%
Loan Analysis
If you financed your system at 6.25% for 5 years and put down 0%, you would be cash positive from Day1 . You would save over $83,000 in the first 5 years alone, even while you are paying off your loan! After that your savings soars. You add value to your building and your system is exempt from any increased tax assessment.
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