“One-Roof Solar Evaluation” Documents Dropping Solar Costs in DC

DC Solar United Neighborhoods (DC SUN), a consortium of cooperatives, has completed a cost comparison by inviting vendors to bid on the same job.  Four vendors participated in the bidding (Lighthouse Solar, SolarCity, Solar Solution and Astrum Solar), while several other vendors completed an online survey.  The DC SUN website documents the findings in more detail, provides bid information and provides an online evaluation tool for your solar project (click here for One Roof Evaluation information).

Key Findings

• Now is the time to invest in a rooftop solar electric system in Washington, DC. Panel prices are a record-lows, installer competition is high, and Solar Renewable Energy Credits, along with a 30% federal income tax credit and the monthly savings in your electric bill all combine to allow you to do well while doing good.

• Return on investment can be far better than one can receive for most other investments. Compared to the current rates for savings accounts, certificates of deposits or stocks and bonds, investing is a rooftop solar electric system has great financial returns. The returns from solar electricity are tax-free in that money you don’t have to spend on your electric bill is money you don’t have to earn and pay taxes on.

• Even if you don’t have cash upfront to purchase a photovoltaic system at this time, a leasing option can still reduce your monthly electricity bill. You’ll pay PEPCO less and generate renewable energy on your own roof.

The Details

  • Gross system cost (before any incentives) for purchasing a system averaged $25,061, ranging from $19,382 to $34,320.  Since 2009, the costs to install have dropped more than 20%.
  • Net system cost (after tax and other incentives) for purchasing a system averaged $12,854, ranging from $9,922 to $16,784.   The reduced net costs factor in Federal tax credits and solar Renewable Energy Credits (sRECs) that vendors will help you leverage.
  • For the lease options, the Initial System Cost averaged $3,639, ranging from $0 $7,278. Two of the lease options had annual payments, averaging $44/month, ranging from $516 to $816 per year.
  • Simple Payback for purchase averaged 13 years, ranging from 12 to 15 years. For leasing, the average was ~11 years, excluding the $0 down option.
  • Internal Rate of Return for purchase averaged 5.8%, ranging from 4.6% to 7.5%. For leasing, the average was 10.0%, excluding the $0 down option.
  • Energy savings ranged from 29% to more than 100% – your vendor can help you with this calculation, which depends on system size, energy consumption patterns and weatherization.
  • DC SUN suggests that weatherization be done prior to, or in conjunction with solar installations.  DC SUN also recommends that systems not be sized greater than 100% because current DC laws do not allow you to take advantage of “overproduction” that occurs over a year’s time frame.

Analysis

Solar is a great long-term investment and DC SUN believes now is the time to go solar!  DC SUN, in previous surveys and member polls, has determined that despite the favorable return on investment, that many homeowners are motivated by the need to re-coup their investment on a shorter time horizon than currently achievable – closer to 6-8 years.  Because the District of Columbia’s solar rebate program sunsets this year and has a full waiting list, explosive growth in residential solar will likely require a re-commitment to providing small rebates over the next 4 years to bring the payback down to the 6-8 year time horizon.  Within four years, the price of panels is projected to continue dropping – which will drive solar installations without additional rebates from the District.  If you want to urge DC to establish a new solar rebate program, click here and register your vote for new solar incentives.

The detailed results of each bid, and additional worksheets allowing consumers to calculate their own rate of return are now posted on www.dcsun.org.  DC SUN strongly suggests getting multiple bids before going forward.