There is an ever-growing customer base that is environmentally conscious, wanting to do “their part” to make things better for our environment. There are many new opportunities to be part of this change. The design of solar energy systems has gotten much better, much more efficient, much easier to install, and the financial incentives have never been better. And Minnesota is no exception.
[contentblock id=1]Earlier this spring headlines around the state suggested an end to Xcel Energy’s popular solar rebates. In August, the Minnesota Division of Energy Resources responded to Xcel’s plan with recommendations to lower the incentive amount but keep the program going three more years. Just a few weeks ago, Deputy Commissioner Bill Grant handed down the final mandate to Xcel to maintain its Solar Rewards Rebate Program at $1.50/watt installed, at $5 Million per year through 2015. There is an additional program ongoing called “MN Made Bonus” that offers $5/watt installed (or up to 60% of the installed cost) if you use solar modules Made in MN. Plus, all solar owners are eligible for a 30% Federal Tax Credit through 2016.
So what do all the numbers mean? How are current prices and payback affected?
In the past, home owners have said “too expensive, too long of payback, not for me”. With lower installation and materials costs, plus continuing solar rebate programs, the solar industry is finally realizing a truly cost competitive clean energy solution for homes and businesses. Of course installation prices vary on the size of system, materials used, complexity of design and installation. When rolled into the cost of a remodeling or new construction job, not only does installing solar become much easier but many costs are absorbed and the client sees more clearly their investment in the energy of the future. Solar energy can be the “icing on the cake” after making all those energy upgrades during the remodeling process. Most residential installations can cost $8,000 to $20,000 upfront, $4,000 to $10,000 after incentives and financing is often available. I get contacted weekly by financial institutions ready to finance solar installations because of the highly predictable savings that are guaranteed.
The actual payback is very site specific depending on the installation site characteristics like shade, panel angle, panel direction, available area and incentives. Therefore payback is much more difficult to estimate than cost. With current installation pricing using high quality materials to last the test of time, paybacks are generally in the 8-14 year range with the Xcel Energy rebate and 14-20 years without the Xcel Energy rebate. That may seem like a long time but I challenge you to think of anything you own that literally pays itself off, then turns profitable over time with increasing value.
Few investments result in the personal satisfaction, zero maintenance, ongoing savings and environmental impact solar energy provides. Solar is a simple, elegant, predictable investment that can make great financial sense in addition to the lasting legacy you and your client will leave behind. Don’t wait long, last year’s Solar Rebates sold out in 3 months!