Rooftop solar: How homeowners should do the math on the climate change investment

  • 📰 CNBC
  • ⏱ Reading Time:
  • 58 sec. here
  • 2 min. at publisher
  • 📊 Quality Score:
  • News: 26%
  • Publisher: 72%

United States News News

United States United States Latest News,United States United States Headlines

Homeowners can install solar at a cost that state and federal incentives and tax credits make financially attractive, but California just complicated the math.

For potential switchers, tax credits can quickly recover part of the up-front cost of going green. Hurwitz took the federal tax credit for his system when he installed it in 2020, and is preparing to add a battery now that it, too, comes with tax credits. Some contractors offer deals where they absorb the upfront cost – and claim the credit – in exchange for agreements to lease back the system.

There's a significant variation in those numbers by region, and by the size and other factors specific to the house, EnergySage CEO Vikram Aggarwal said. In New Jersey, for example, a 7-kilowatt system costs on average $20,510 before the credit and $15,177 after it. In Houston, it's about $1,000 less. In Chicago, that system is close to $2,000 more than in New Jersey. A more robust 10-kilowatt system costs more than $31,000 before the credit around Chicago, but $26,500 in Tampa, Fla.

Alternatively, consumers can finance the system but still own it themselves – we were quoted interest rates of 2.99 to 8.99 percent. That eliminates consumers' up-front cost, but cuts into the savings as some of the avoided utility costs go to pay off interest, Aggarwal said. Wood Mackenzie said the details of California's decision made it look less onerous than the firm had expected. EnergySage says the payback period for California systems without a battery will be 10 years instead of six after the new rules take effect in April. Savings in the years afterward will be about 60 percent less, the company estimates.

 

Thank you for your comment. Your comment will be published after being reviewed.
Please try again later.

Definitely do the math! I’ve seen many homeowners purchase solar only to sell their home within a couple of years. Quite common really the last couple of years with how fast HomeValues appreciated.

90% of federal tax payers use the standard deduction on their taxes. Tax credits only help about 10% of taxpayers. Using tax credits to determine solar panel payback period is not an option for most tax payers. timmullaney

The roof may need much more work before you want to add an additional load. California is cutting back on the remuneration for electricity returned to the grid. So, there is no guarantee of savings in the future. tt:berthacoombs

Climate change is a scam

Rooftop solar is not an 'investment' and it will not affect the weather.

We have summarized this news so that you can read it quickly. If you are interested in the news, you can read the full text here. Read more:

 /  🏆 12. in US

United States United States Latest News, United States United States Headlines