What If My Utility Company Doesn’t Offer A Rebate?

As discussed in previous posts here and here, the cost of installing solar panels can be greatly reduced by utility company rebates.  But, what if your utility company doesn’t have an incentive program?  Or your roof doesn’t qualify due to the direction your roof faces?  Fortunately, without the utility’s involvement you retain ownership of the SRECs and can sell them on the open market to reduce your system cost.

What is an SREC?

In SREC states, the Renewable Portfolio Standard (RPS) requires electricity suppliers to secure a portion of their electricity from solar generators. The SREC program provides a means for Solar Renewable Energy Certificates (SRECs) to be created for every megawatt-hour of solar electricity created.

1 SREC = 1,000 kWh of solar electricity = 1 MWh of solar electricity
10 kW solar capacity = ~12 SRECs per year

The SREC is sold separately from the electricity and represents the “solar” aspect of the electricity that was produced. The value of an SREC is determined by the market subject to supply and demand constraints.

Source:  http://www.srectrade.com/background.php

Using an example market value for SREC’s of $100/SREC, here is a 10 year cost estimate for solar panel installation without utility rebates:

cost with SRECs

The net total costs end up being very comparable to the utility rebates illustrated in our previous calculation.  If your yearly utility costs are similar to ours, the payback for your system could be less than 2 years!*

Here is a real life example of someone who reduced the cost of their solar panel installation by selling REC’s on the open market, profiled on The Wall Street Journal’s Market Watch:

Solar Power Your Retirement

The solar panels would probably produce about $250-300 a month (between electric bill savings and the monthly SRECs). So in terms of my retirement income, this was like earning up to $3,600 a year. I checked my local CD rates and it would take me $200,000 in a five-year CD to earn that much income.

Source:  http://www.marketwatch.com/story/solar-power-your-retirement-2012-12-04

Readers, does your utility company offer a solar rebate?  Would you consider selling SREC’s on the open market?

*This is hard to quantify though, since SREC payments would be spread out over the life of the system vs. an upfront payment.

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One thought on “What If My Utility Company Doesn’t Offer A Rebate?

  1. Pingback: Solar Panel Prices Drop Again | DIY Rooftop Solar

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