Our clients are often most concerned with the viability of solar as a financial investment. At Newport Solar we produce free proposals for our prospective clients, so that they can see how efficient, and thus financially attractive, investing in a solar array could be. However, the value that a solar array gives its owner is not just tied to the kilowatt-hours (kWh) that it produces. To get a full picture, one must look into other financial benefit such as incentives, tax credits, reduction of risk, and property resale value.
The most obvious financial benefit of solar, beyond environmental, is the money that it saves by offsetting electricity use. Rhode Island has some of the most expensive electricity rates in the nation. With a Net Metering installation, our clients are seeing a 7 to 8 year payback with annual rates of return around 14-16% or higher.
Rhode Island has aggressive incentives to help pay for solar. In a Net Metering installation, clients can get money up front to help reduce the cost of the installation. Additionally, there are programs that pay RI residents for their electricity production. Ask us for a free proposal and we will help you navigate the somewhat complicated financial benefit of state incentives.
The Federal Government offers a 30% tax credit on renewable energy systems. This tax driven financial benefit helps our clients recoup a large chunk of their investment right away. For homeowners, 2019 is the last year for a full 30% federal tax credit. It steps down to 26% and then 22% in the next two years, ending in 2022. For commercial systems, it goes down to 10% permanently. Businesses can often depreciate solar as an asset using a Modified Accelerated Cost Recovery System (MACRS) depreciation strategy. Of course, we are not CPAs at Newport Solar, but we can model these benefits and send any info over to your CPA for review.
Electricity prices, on average, have gone up by a compounding 3-4% annually over the last 10 years. This increase, however, is not a smooth curve; check out our real-time electricity pricing display here. This unknowable increase over the coming 10 years presents your pocketbook with risk. Will electricity rates go up by more than 4% annually? We don’t know. By producing your own electricity, you are limiting or eliminating this risk and capturing the financial benefit of controlling your cost of energy!
One of the biggest questions our team gets when we deliver a sales proposal is, “What will solar do to the resale value of my house?” Now, all real estate is local, and you cannot account for taste; however, we can look at the statistics and say that, on average, solar is great for resale value! Zillow just released a broad study that shows homes with solar sell for an average of 4.1% more than other equitable homes. Check out the study and see how solar might impact the value of your home in a positive way!
Solar is Awesome
Residential and Commercial Solar has been around for a while now, and the data are in. Solar is likely one of the best investments you can make on your property if you are looking to save money and make an excellent, low risk rate of return on your hard earned cash. Want a free proposal for your property? Contact us, and we will hook you up.