|Author: Kyle Yost February 6,2018|
Roof space in DC is valuable, so solar leases/ppa can be a win/win for both roof owner and solar installer, but understand what the solar installer is getting from the deal and assess for yourself whether they are offering to share a sufficient percentage of your roof’s value that they are extracting.
- SRECs. At $4 – $6 / watt total lifetime value, this is ~ $500,000 in value. Risky, non-guaranteed value, but likely future value.
- 30% tax credit. At $3.00 / watt installed system value price, that is $90,000 in immediate tax value
- Depreciation. 85% of system value can be immediately depreciated (thanks to new tax law), so depending on tax rate, depreciation value is another immediate $70,000.
- A 100kw system would generate 120 MWh / year, and you are paying the installer $0.07/kwh, so about $8400 per year to buy the electricity the system on your roof is producing. Assuming a 15 year contract, that is another $126,000
- So, to install this 100kw system, which likely cost the installer ~$150,000, he is getting ballpark $500,000 + $90,000 + $70,000 + $126,000 in lifetime value out of it = $800,000 return from $150,000 invested, a good ROI.
- $0.04 / kwh savings on electricity rate. Round this up to $0.05 / kwh as pepco rates will increase but presumably your rate stays constant. So, for 15 years of 120 Mwh/year and $0.05 / kwh savings you are saving $6000 per year * 15 = $90,000 lifetime value on $0 invested (unless you consider nuisance, hassle, and risk of roof damage from having panels on your roof an investment)