Are solar panels worth it for Public Service Enterprise Group Long Island electric customers?
The reason is that incentives available in New York make solar an incredibly affordable and worthwhile investment.
The federal tax credit has been the backbone of solar incentives for many years now. The 26% federal tax credit gives people a credit against their income tax for 26% of the total system cost. The credit can be used for up to 20 years. After tax time, this essentially makes your solar system 26% cheaper.
New York also has a state incentive called the Residential Solar Tax credit. This is also a tax credit but will cover up to 25% of the total cost with a maximum credit value of $5000. For a system to be eligible it must also be sized under 25 kW, but this is almost always the case for residential installations.
There are also various financing and loan options available.
If you want to know more about available incentives in your area, contact a local solar installer. Solar installers are experts when it comes to incentives.
What are PSEG's Net Metering rates?
PSEG offers full 1-1 Net Metering.
Solar arrays will at times produce more energy than the home can use, depending on time of day and electrical load within the home. When this happens, the excess energy is exported into the grid. Full Net Metering awards a 1 kWh account credit for each 1 kWh exported into the grid. This credit can then be exchanged for 1 kWh of power imported from the grid.
Net Metering effectively allows you to use the grid as a limitless battery for the solar energy generated by your system. The excess energy is sent to the battery (the grid) and the battery "charges up" (gains credits for each kWh). The battery can then be discharged (exchange credits for kWhs) as needed when there is no power generated by your solar system, such as after dark. Net metering economically "stores" energy for later use. In this way full net metering enables customers to eliminate the variable component of their usage bill.
Are solar panels worth it for PSEG residential customers?
Short answer is , yes, absolutely. If Long Island residents don't install solar while these generous incentives are available, they will later be kicking themselves. Seriously, the government and state are offering to pay a substantial amount, up to half the costs, for you to install a solar system, and as an added benefit PSEG will let you use the grid as a giant, perfect battery.
Think about this for a second. The government want to pay most of your system, you will be helping the environment, and over the next years and decades ahead you won't have to fork out any money for electric power.
Once you buy the system it is expected to work for at least 25 years with little maintenance. After you install solar you may never have to pay for electricity. Sure, buying the system may be expensive, but that's why the government and state will help you pay for it.
If I input the details for a PSEG customer that has a power bill of $233 per month into the best online solar panels calculator it tells me that I need a 8.71kW solar system that will produce 9,985 kWh's per year and that this system will return the owner a $105,057 profit even after repaying the capital over 25 years.
So, for a investment of around $6,000 (could be more or less depending on the system size) you get free power for 25 years. People who install solar in New York can save $40,000 or more over 25 years.
See your solar panel installation cost from your local solar companies around New York
How much do I save if I install solar panels for my home as an PSEG customer?
The savings will vary depending on how much your power bill is now, the time of day that you use power and the size of system you decide to purchase. Often the size of the system and the savings generated are dictated by available roof space. It can also vary based on the direction of your roof or any shading of your roof that effects output.
Here is a monthly and lifetime solar estimate for the same customer used above that has a $233 per month electric bill prior to solar and who installs a 8.71kW solar system.
Zero-down financed solar system estimate for a PSEG customer
Monthly savings year one $128
The graph above shows the savings for this customer in the first month that their solar system is live. It assumes that the system is purchased via a 100% loan product.
One of the common reasons why people have been slow to install solar panels despite the excellent financial return that they give to PSEG customers is that often the first months savings are not enough to motivate them to go through the process of buying solar. However, it is important that people realize that solar savings grow over time as utility prices increase. As can be seen in the graph, the solar saving are sizeable when totalled over the life of the system, not just the first month.
The graph below shows the savings for the same customer over 25 years. Please note the overall profit is slightly less than what was displayed for a cash purchase of the same system above. The difference being that we have included the cost of interest in the lifetime savings summary below.
Zero-down financed solar system cash flow
|System Size||8.71 kW|
The above cash flow projection assumes a solar system that offsets 100% of power usage, a finance rate of 3.99%, a financing period of 20 years, a minimum utility charge equivalent to 10% of bill without solar, and a utility cost inflation rate of 4.5% p.a.
What is the average payback period for residential solar panels for an PSEG customer?
The payback period for an PSEG customer installing solar panels on their roof at home depends on their power usage prior to installing solar, the time of day in which they use power and the size of system they install. What we have done below is copy an extract from the leading online solar panel savings calculator which shows that the payback period for a typical PSEG customer as we've discussed above. You can visit this calculator yourself and enter your own current power bill to see your solar savings and your likely payback period. You'll note that for customers with larger monthly power bills the payback time is usually slightly shorter because the cost of solar systems per watt usually reduces as the system size increases.
See your savings and payback period based on your electricity use and location in the PSEG territory
Estimated system size 8.71kW (100% usage offset)
Pay Back Period
4 Years 5 Months
Est. Cost/WattEstimated Cost Per Watt
(after 26% tax credit and local incentives)
Annual Power Generation
Your total savings over the life of the system are estimated to be $105,057
|Estimated south facing roof space required||581 sq-ft|
|Levelized cost of power from this system over 25 years||5¢ cents/kWh|
|System cost reduction by upfront incentives||-$9,724|
|Average cost of utility power over 25 years (if you don't get solar)||50¢ cents/kWh|
|Equivalent Return on Investment (IRR)||26.5%|
|Monthly Savings year 25 (for 100% energy usage)||$670.08|
System prices are estimated based on the average reported cost of systems installed in the past year. Pay Back Period and Equivalent Return on Investment are calculated based on a 100% cash purchase. Estimated Cost Per Watt is calculated after claiming all applicable incentives. This estimate assumes you are able to take full advantage of potential tax benefits.
Cash Flow graph - Cash Purchase of this system
What incentives, tax credits and rebates are available to PSEG customers for installing solar?
As is the case with most utilities around America, PSEG no longer offers up-front cash incentives paid by the utility to encourage their customers to install solar panels. There are some upfront incentives available for customers on low incomes and some available for new home construction. You should ask your local solar company about whether you may be eligible for any such incentives. Solar may also be eligible for some wider energy efficiency grants or credits although these are also limited in scope and application.
The major financial incentive currently available until the end of 2020 is the 26% federal solar tax credit. However the way this works is that the full cost of the system needs to be paid to the installer and this tax credit can then be claimed back as cash when you next do your taxes.
Residential Solar State Tax Credit
Property Tax Exemption
100% of cost of system is exempt from property tax. Local entities can disallow the exemption through implementing policy.
Solar Sales Tax Exemption
Exemption of New York state sales tax on retail sale and installation of residential solar systems.
Value of Distributed Energy Resources - Phase One Net Metering
Systems installed between March 9, 2019 and January 1, 2020 receive volumetric credits for kWh their system exports to the grid. After January 1, 2020, Phase One Value stack Tariff starts, receive monetary credit on bill not kWh credits.
NY-Sun Smart Energy Loan
Loan amounts available between $1,500 and $25,000 repaid directly to NYSERDA's loan server.
NYSERDA Retail Energy Storage Incentive Program
$250/kWh of storage
Current net metering continues until 2022, at which time new customers will begin paying a small "Customer Benefits Charge" on every monthly bill.
NY-Sun Affordable Solar Program
Additional funding of $800/kW for homeowners at 80% or less of area median income. Also includes solar loans with on-bill repayment options.
Residential Renewable Energy Tax Credit
Please keep in mind that the best source of up-to-date information on incentives are the solar installers who specialize in your area. If you still are unsure about the eligibility criteria of some of the solar incentive programs, please discuss with the solar installer representative who may contact your shortly, or visit the solar incentives discussion forum where the most common questions are likely to have already been answered.
Detailed information about your estimate
|System Size (for 100% usage offset)||8.71 kW|
|Annual Power Generation||9,985 kWh|
|Pay-back time (assuming Cash purchase)||4 Years 5 Months|
|Internal Rate of Return (IRR) on Investment||26.5 %|
|Total Upfront Incentives and Rebates||-$9,724|
|Net Cost of System after rebates and incentives||$13,445|
|Total Cost of Utility Power Avoided over 25 years||$124,594|
Please note that the investment return figures do not include the possible increase in property value.
What are the environmental impacts from PSEG Long Island customers installing solar panels for their home?
While most home owners ultimately decide to install solar panels because of the financial savings they offer over time, for some people it is the environmental impacts of this choice that drive the decision to install solar. Here is a break down of the environmental benefits delivered by the installation of a 8.71kW solar system.
A solar system generating 9,985 kWh per year will save you money AND make the world a nicer place
on average per year
Reduces CO2 emissions
metric tons per year
Equivalent to planting
Equivalent to driving
less per year
CO2 emissions calculation based on the electricity generation and emissions data for your state in 2015 as published by the US Government Energy Information Administration.
How much power do solar panels installed in the PSEG Long Island territory produce?
Solar panels in Long Island typically produce 1,230 kWh annually per 1kW of peak DC. In simpler terms, in NY solar produces a moderate amount of power compared to some of the sunnier southern states. Solar installed in states like California, Arizona and Florida produce more power than equivalent sized panels installed in New York simply because being closer to the equator, more solar energy falls on them for a longer period each year. However, don't let this discourage you from going solar, because solar panels in NY can still produce more than enough to power for your home.
How much does solar panel installation cost in the PSEG Long Island territory?
The cost of a solar system will vary depending on what components are used and the contractor's labor costs. The panels, inverter, installation company and the difficulty of the installation all reflect the overall cost of the installation.
According to the figures available to us, a good price for quality components in New York is $3.84 per watt. For a system financed by a solar loan, a good price is about $4.29. This means the cash installation price for a 3KW system is $11,520, before incentives. After incentives and rebates are received at tax time, the effective cost will drop significantly, perhaps by 50%.
Who are the best solar companies that service my local part of the PSEG Long Island territory?
As the PSEG Long Island territory covers a number of cities there are different solar companies operating locally in each as well as some that cover the whole territory.
If you are up to the stage of wanting quotes from solar installers you can get a system sized for your house and up to four quotes from installers that service your area for free online by entering your zip code below.
See my solar panel installation cost from your local installers
How much electricity will solar panels produce where I live?
How do I get an accurate solar quote that takes into account my home and my power usage?
To do this they need to know your power usage patterns. This will allow you to come up with the amount of solar panels you would ideally want to making your power bill zero.
Once you determine the right amount of solar panels you then need to measure your roof to see how many panels will actually fit on your roof. Most solar companies can measure roof spaces online using tools that are similar to Google Maps (but are more accurate) such as www.nearmap.com.
The www.solar-estimate.org website is the leading solar marketplace in America and allows you to both do an accurate online estimate of your needs and request quotes from solar companies through one interface.