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 400KWhrs on average (See your PNM bill for your monthly electrical usage). We got an estimate from Positive Energy for a 3010W (400kwhr/mo) grid-tie system for $25,293 including installation (no Sales Tax due to recent legislation). (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 3010 W x 5.9 Hrs Sunlight x 30 days or 533KW. (KW= kilowatts= 1000 watts) Important: the rating for the system is always optimistic and needs to multiplied by .75 or a more realistic 400+/-KW. We will let you know what we really get after a few months.

First, you can take advantage of solar tax rebates - $2000 (federal) and $5,588 (state - 30% of the cost of the system less federal rebate ($2K) and up to $9000 maximum). Of course your state taxes must exceed $2,800 per year or you will have to spread it out over time. Our system less tax rebates will cost $17,705.

With net-metering, we get a credit on our electric bill of $.09/KWhr x 400 x 12 months or $432/Yr AND an REC (Renewable Energy Credit) of $.13/KWhr x 400 x 12 months or $624/Yr. Our total earnings on our $17,705 investment is $1056/Yr or 6% before taxes (better than a cd rate). The payback period is approximately 16-20 years since we are only guaranteed REC payments up to 2018. The bonus is that rates WILL increase and the $.09/KWhr paid for net-metering will likely increase, therefore we will have energy inflation protection.

This is a simplified analysis. Alan Zelicoff 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). The contract with PNM for REC payments ($.13/KWh) will expire in 10 years or 2018. If you sign up in 2008, you are only guaranteed 10 years of REC (green) payments ($.13KWh), however the contract could be renegotiated at the end of its term.