How going solar saves you money over time

Thinking about going solar in Massachusetts? It’s a smart move if your home gets enough sunlight. Solar systems in the state usually pay for themselves in about six to eight years and keep generating savings long after that. They can last over 20 years. The cost of installing solar panels has gone down significantly in the last ten years. The actual price depends on things like system size, where you live, permits, and optional extras like a home battery. Check out our Solar Costs Comparison article.

Solar panels produce electricity that replaces what you would normally buy from your utility. That’s a big advantage of having solar. Whether you buy the system upfront, lease it, or have a power purchase agreement (PPA), it helps you predict your electricity costs. This shields you from potential price hikes due to changes in fuel costs, demand, or supply issues.

With different ways to own solar, varying upfront costs, and savings spread out over time, comparing proposals can get tricky. There are important financial details and ways to understand them that can make it easier to figure out which option is best for you.

Key financial aspects of a solar project:

Initial expenses

The amount paid for the solar system during installation.

Ongoing costs

Expenses spread out over time, such as financing or leasing expenses, as well as operational and maintenance costs, like inverter replacements.

Initial gains

Advantages obtained at the outset, such as rebates or tax incentives.

Ongoing gains

Benefits received over time, including projected savings on electricity costs and incentives based on energy production.

You might come across these assessments in installer proposals, which can help you quantify the financial advantages of setting up a solar electric system:
  • Total system cost: Total cost (not including incentives).
  • Net System Cost: Total cost minus incentives.
  • Price per watt: Total cost (not including incentives) divided by system size (W).
  • Cash flow: An estimate of costs and savings and when they will be realized over the life of the system.
  • Total savings: The costs and savings over the system’s lifespan and when they’ll occur.
  • Payback period: How many years it takes for the system’s savings to match the initial costs.
  • Net present value (NPV): This analysis compares upfront costs and benefits to long-term costs and savings. It does this by converting future costs and savings into a value that acknowledges the option of investing money elsewhere. It isn’t necessary to calculate the NPV of a solar system, but some installer quotes might have an NPV calculation so it’s helpful to understand what it is. To get an explanation of the NPV formula, look it up online to find articles like this one.

Before making this significant purchase, it’s a good idea to compare price quotes and comprehend how potential installers outline the advantages and assumptions within their quotes. MassCEC suggests obtaining quotes from several installers, reviewing the details of their quotes, and paying attention to the numbers shown next to the key terms above. Look for the system cost to be displayed as both the total system cost and cost per watt ($/watt). This enables you to more easily compare numbers across different installer quotes.

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