Pillar: here's the #s:
Cost of panels, inverter, rails: $34,100
Cost of stainless steel threaded rod and hardware: $753
Cost of lumber for inverter shed: $1,000
Cost of concrete: $250
Cost of 100A drop from power company: $300
Total cost of system: $36,403
33% from feds, $10K from NC, after tax credit cost: $14,390
I get 20 cents per kilowatt hour. 15 from NC Greenshares (cap and trade deal) and 5 from the power company (burden cost). Power company also has net metering, cost of electricity here is 10 cents per KWH. That's my worst case rate if NC Greenshares can't sell enough carbon credits.
On-lin calculator for my area (Raleigh, NC) shows $2000 per year at that payback rate. Also I'm assuming that investing the money elsewhere (i.e. cost of lost opportunity) would be around 2% annually, since interest rates are bad.
Pete
Pete,
How many KW's are being produced in this system?
You said, "I get 20 cents per kilowatt hour. 15 from NC Greenshares (cap and trade deal) and 5 from the power company (burden cost). " Does this mean YOU get paid 20 cents per KWH or that is what the system costs to produce the KWH? Is NC Greenshares paying the home owner for producing power as well? I am trying to understand if there are payments made to the home owner that I do not know about.
My understanding about NC net metering is that the power company pays the wholesale rate of the power while I still pay retail. In other words if the wholesale rate is 5 cents per KWH that is the credit I would get for the power I put back in the grid. Yet I would still pay full costs for the power I used which is 10 cents per KWH. I would being saving money but not as much as one would believe. I don't know if the wholesale cost is 5 cents I just pulled that out of the hat as an example.
Below is not addressed to Pete just a statement of my understanding of how the credits work in NC and likely other states.
For years the NC tax credit has been capped in several ways. Solar power generation is capped at $10,500. But a home owner can only claim 35% of the cost of the system up too the $10,500 limit. Which means a homeowner would have to spend $30,000 on the system to get the full credit. Your numbers reflect this but I am trying to make a point for others so bear with me.
The OTHER cap is that a homeowner can only get back a maximum of 50% of their NC tax. If the homeowner spent 30K on the system, NC will give them back 10.5K but for them to get the full amount back they would have to pay in NC taxes 21K. Maybe John Edwards has a tax bill like that but I sure don't.




I hear he has more dependent deductions all of the sudden so maybe his tax bill has gone down.


The way I read the law, the homeowner can take six years to get the tax credit. If they are paying $5,000 a year in NC taxes then they could get back a max of $2,500 per year for six years. After 5 years they would would have the full 10.5K credit. If the homeowner was ONLY paying $3,000 a year in NC taxes they could only get $1,500 back per year on the credit and after six years they could only get back $9,000 out of the $10,500. Not bad but it is still $1,500 short of the max and takes six years to recoup.
Two points from all of the numbers. First, the tax credits are not as great as they seem. One reads I can get 35% pack up to $10.5K! Woo Hoo. The problem is two fold. First one has to be able to pay 30K up front to install the system in the first place. THEN wait years to get the tax credit back. And it might take six years to finally get all of the money back. One can't put the system in service in 2010 and then in 2011 get $10.5K back on their NC taxes. Unless one has lots of taxes to pay. I have lots of taxes to pay but NOT that much!


The other "trick" in this is that it behooves the home owner to get the system in service in December so that in January they can start their tax returns to get the tax credit back ASAP.


DSIRE: DSIRE Home is a great source of information on renewable energy tax issues.
Later,
Dan