How the Numbers Work :
Once you have a size estimate, you can evaluate the cost/savings picture. Let's say that you (like us) have gotten your monthly KWHrs down to 350KWhrs on average (See your PNM bill for your monthly electrical usage). You will need to start by looking a full year of bills and taking the average.
We got a 2.48KW (2580 watt) grid-tie system from Positive Energy that will produce 4700kwhr/yr or 391.6 kwhr/mo) for $21,753 including installation (no Sales Tax due to recent legislation). There are 12 SunPower panels at 215 watts each plus a 3000W inverter. (Grid-tie means that it ties into the PNM system and is not a stand alone system). You can not have a battery backup system in case of power outages under this arrangement. All excess electricity generated must go back to PNM. The system we priced is rated for 2580 W x 5.9 Hrs Sunlight x 30 days or 457KW. (KW= kilowatts= 1000 watts) Important: the rating for the system is always optimistic and needs to multiplied by .85 to get a more realistic 391.6+/-KW. We will let you know what we really get after a few months. Our first 29 days generated 378kwhrs in November which is right on target.
First, you can take advantage of solar tax rebates - 30% or $6526 (federal) and 10% or $2175 (state) Of course your state taxes must exceed $2,175 per year or you will have to spread it out over time. Our system less tax rebates will cost $13,052. This is a credit and comes off of taxes owed so you get the full deduction not just the rate you pay in taxes.
With net-metering, we get a credit on our electric bill of $.10/KWhr x 391.6 kwhrs x 12 months or $470/Yr AND a check for the REC (Renewable Energy Credit) of $.13/KWhr x 391.6 x 12 months or $611/Yr. Our total earnings on our $13,052 investment is $1081/Yr. The payback period is approximately 12 years (which mirrors the length of the contract that we signed with PNM. The bonus is that rates WILL increase and the $.10/KWhr paid for electricity today will likely increase, therefore we will have energy inflation protection.
The contract with PNM for REC payments ($.13/KWh) is for 12 years. What happens if you sell your home after year 6 years? According to PNM, they will re-sign with the new owner (if done promptly) for another 12 years. Whoa doggie!! While the panels have a warranty for 25 years, the inverter must usually be replaced in 15. Our inverter was approximately $2000 of the cost. Not a bad investment to get another ten or more years from your system. The way technology is going, the newer ones may be even better and in fact you may want to consider micro inverters that help with shading issues and give a slightly higher yield. Note: Our insurance company added $40/Yr. to our homeowners policy to cover the solar.
This is a simplified analysis. Go to SolarEstimate.Org for a terrific custom analysis of size, cost, payback and more. Impressive site. Alan Zelicoff also provided a much more detailed analysis with a more positive result. He has graciously allowed us to post his Excel worksheet that will calculate your savings (You can plug in your own numbers). I have amended this spreadsheet slightly to reflect newer tax incentives, etc.