Based on the given system size and costs, here’s how the solar project costs break down for cash purchase, finance, and Power Purchase Agreement (PPA) options in New Jersey:
- System Cost and Discounts:
– Initial System Cost: $30,000 (for a 10 Kva system at $3.00 per watt selling price)
– Federal Tax Credit: $9,000 (30% of the system cost)
– SREC Credits Total: $13,500 (New Jersey offers $90 for each KVA installed over 15 years, paid monthly)
- Cash Purchase: $30,000
– Federal Tax Credit: ($9,000)
– Cost After Federal Discount: $21,000 (system cost minus federal tax credit)
– SREC Credits Total: ($13,500)
– Net Cost After SREC Credits: $7,500 (cost after federal discount minus SREC credits)
- Finance (4.99% on a 25-Year Loan):
– Federal Tax Credit: $9,000
– SREC Credits Total: $13,500 Approx. $75 direct deposited by the state to your account for 15 years
- If you roll your federal credit in 18 months to loan and provide your federal refund to financer
– Loan Payment: Approx. $122.64/mo.
– Loan Payment w/ Srecs: Approx. $122.64 – $75.00 = $47.64
– Interest Paid life of loan: $15,792.48
- If you DO NOT roll your federal credit in 18 months to loan and do not provide your federal refund to financer
– Loan Payment: Approx. $175.20/mo.
– Loan Payment w/ Srecs: Approx. $175.20 – $75.00 = $100.20
– Interest Paid life of loan: $22,560.68
- PPA:
For a PPA, the cost to the consumer is based on the agreed-upon rate per kWh for the electricity generated by the solar panels. The specifics of this rate and any potential escalations over time were not provided, so we cannot calculate exact costs. However, with a PPA:
- – There’s no upfront cost for the system installation.
- – The homeowner agrees to buy the power generated at a set rate, which is often lower than the local utility rate.
- – Maintenance and repairs are typically the responsibility of the system owner, not the homeowner.
In summary, choosing a cash purchase or financing the solar system through a loan can offer significant savings and benefits, especially with the added advantage of SREC credits in New Jersey. A PPA can be an attractive option for those looking to avoid upfront costs and maintenance responsibilities, although it does not provide the benefits of system ownership or the direct financial incentives like tax credits and SRECs.