Greening Wheaton is getting easier and easier thanks to Solar Renewable Energy Credits and Solar Power Purchase agreements for homeowners. Wheaton’s Leah Haygood is one of the local homeowners who is reducing her family’s environmental impact by taking advantage of a Solar Power Purchase Agreements to get solar panels installed on her home. This relatively new option, which involves leasing rather than purchasing the solar system, is appealing to many because the solar energy contractor designs, installs, commissions, insures, and provides warranty service for the length of the contract, which is typically 20 years.
The solar panels typically provide 30% to 60% of the electrical needs of an average home. When the lease period is completed, the homeowner can purchase the solar panels, extend the contract or have the solar energy provider remove the panels. In return for getting solar panels on the home, the homeowner agrees to pay a monthly lease or to purchase electricity from the solar provider, often at a savings over the prevailing electric rates. In practice, the overall cost of electricity for the homeowner should be less than what it was before the panels were installed. If electric utility rates continue increasing, the cost savings could be substantial through the years because the solar power electricity price is set by the contract.
Leah has the following advice for homeowners who are interested in solar power for their homes. First, work to reduce electric use in your home. As noted in my earlier blog, there are energy efficiency professionals who will provide energy audits of your home (Your Home Energy Audit) that will provide a useful guide in reducing your electric usage at home. Next, get quotes from solar energy providers. There are several contractors who provide this service. According to Leah, the ideal home for solar panels will have a sunny southern exposure rooftop. The roof should be less than 10 years old. Roofs that are over 20 years old may need to be replaced.
Instead of leasing the panels, a homeowner may choose to purchase the panels. A homeowner who pays for the panels up front and maintains them may see a payback within eight years. The homeowner also has to consider what the utility rates will do over the next 20 years. If the utility rates go up steadily over time, the solar panels will be a great alternative. If the price of electricity instead decreases over time, the homeowner may end up paying more for electricity than the power company would charge. In Leah’s case, she paid about $1,700 upfront, which significantly reduced her monthly lease payment (Leah had the option of paying no upfront costs, but having a higher monthly lease fee). Since the May installation, Leah has seen an average $90 per month reduction in her electric bill. Her monthly lease cost is only $40 per month. As electric rates increase over time, her savings will also increase, while her monthly $40 leasing cost will remain the same for the 20 year contract term. While Leah less savings during the winter months, when days are shorter and solar production less, she can expect a simple pay back of her $1,700 in about four years.
This opportunity has been made possible because of Maryland’s renewable portfolio standard program. This legislation established the Maryland solar renewable energy market using Solar Renewable Energy Credits. The credits provide incentives for businesses and homeowners to add solar energy to their properties. The credits are provided to the owners of the solar panels, so if you are leasing the solar panels, you will not directly receive the credits.
Additional facts about the Maryland Solar Industry and Maryland’s solar installers and manufacturers can be found here: http://www.seia.org/state-solar-policy/maryland