What is an SREC and how does it work
RECs (Renewable Energy Certificates) or SRECs (Solar Renewable Energy Certificates), often referred to as credits, serve as the "point-system" in counting 1 megawatt-hour
(MWh) of electricity
being generated from an eligible renewable energy
resource (in this case solar). SRECs are sold, traded, or bartered, much like the stock market, and the owner of the REC can claim to have purchased renewable energy.
There are 2 main markets for Renewable Energy Certificates in the United States - voluntary markets and compliance markets. Voluntary markets are ones in which customers choose to buy renewable power out of a desire to use renewable energy. Currently 30 states, including Maryland, have compliance markets which follow Renewable Portfolio Standards (RPS) where electric companies are required to generate a certain percent of their electricity from renewable generators
by a specified year.
Compliance is made through the purchase of RECs or SRECs. Requirements increase annually and Maryland's RPS requires 20% to be derived from renewable energy resources by 2022, with a percent of that specifically obtained from solar. If suppliers do not procure the required amount, they have to pay the compliance payment - Maryland's is $400 per SREC through 2014. This is how leverage is gained in selling SRECs. Utilities seek to buy SRECs from solar system owners for a reduced cost.
Follow the link to see Maryland SREC Market Info: http://www.srectrade.com/maryland_srec.php
Follow the link to view the database of state incentives for renewables & efficiency: http://www.dsireusa.org/
How much will a system cost me?
This is a hard question to answer as it is comparable to asking “how much will a car cost?” The answer always is, “it depends.” What type of car do you want to drive, what type of financing, mileage, features, etc? The cost of a solar system is largely dependant on the size of the system. But other factors that can influence pricing is what type of modules, ground mount vs. roof mount vs. tracker, is there going to be a lot of labor involved in tying your system to the meter (where is the system going to be located), etc.
What size system will I need?
This depends on how much of your utility bill you want to offset. Do you want to offset 100%, 50%, etc? You can estimate the size you will need based on your kWh (kilowatt hour) usage found on your utility bill and then converting that kWh into kW.
A mathematical example is below:
If you use 15,000 kwh and you want to offset 100% of your utility bill (meaning you want to no longer pay a utility bill) then:
- First we want to find out how many kwh we use in one day:
15,000kwh/30 days = 500 kwh/day
- You have to divide this number by the amount of “sun-hours” produced in one day. This number, also referred to as insolation, is dependent on location. For purposes of this example, we will use a generic 4 hours.
500kwh/4hrs = 125 kW system
So, you will need roughly a 125 kW system in order to offset your utility bill 100%.
What is a typical payback period?
Again, it depends. For a residential home, average payback is 5-7 years. For commercial, it is 4-6. Usually larger systems have quicker payback.
How long will the system last?
Manufacturers production warranties are almost always 25 years.
What maintenance is involved?
There is more maintenance involved in wind renewable energy than solar. With solar, mother nature basically takes care of the maintenance. Rain will wash the panels right off and snow will melt off the panels from the sun and the heat generated by the panels.
How much space will the system take up?
On average, solar panels are around 18 sq. feet, 5 ½ x 3 ¼ ft. A 10 kW system will be about 40-45 panels.
How do I get the grants/incentives?
All you have to do is sign the papers. Earth and Air Technologies will prepare all your grant writings so that you don’t have to.
What is the difference between the tax credit vs. grant? Which is better?
Tax grants only are only available to commercial businesses.
Tax credits are available to both residential and commercial businesses.
In general, tax credits will give you quicker payback. However, a grant gives you the money in your pocket. We advise you talk to your tax advisor to see which would be best for your circumstance.
What is modified accelerated depreciation?
December 31, 2011, is when 100% expires.
This means you can write off the gross cost of system the first year.
What is the definition of kW (kilowatt) and how does it convert to kWh?
Kilowatt is equal to 1,000 watts.
kWh stands for the amount of hours you use 1 kilowatt of electricity (or 1,000 watts).
Can you explain the breakdown of my utility bill?
Of course, send us a copy of your utility bill, and we will gladly explain it and make suggestions on what size system would be most suitable based on your electricity usage.
Will solar increase my home/building value?
The Appraisal Journal: Evidence of Rational Market Evaluations for Home Efficiency states for every $1,000 in energy costs saved per year raises your home's value by $20,000.
For example, if your system saves you on average $300/month = $3,600 year, your home would increase $72,000 in appraised value.
A lot of times, taking into account the increase in appraised value, the system has more than paid for itself as soon as you have it installed.