For Massachusetts residents, the answer is an unequivocal yes.
On account of the numerous incentives at both the state and federal level for solar panels, there has never been a more rewarding time to go green with solar power. Just about all residential systems will pay for themselves in less than five years.
The price on a 5 kW solar panel system starts at about $25,000, before any discounts. But the Commonwealth Solar Rebate will deduct $2,000 off the top of that price. Plus, if one lives in a moderately-sized home or earn a moderate income, they will receive a $2,000 rebate adder. Both of those immediately reduce their initial cost.
There are also both federal as well as Massachusetts state tax credits. The federal tax credit is 30 percent and the state credit is good for $1,000. After the rebates coupled with the tax credits, one will be able to purchase a 5 kW solar panel array for only $16,000, even less if they should qualify for the moderate income or moderate home value adders. They are exempt from sales tax.
A system of this size will generate almost 6,000 kWh of electricity annually here in Massachusetts and supply just about 60 percent of the typical residential home's energy requirements, for an annual savings of about $1,000.
But the most lucrative incentive available comes from selling a system's SRECs. Each megawatt hour (1,000 kWh) is equivalent to one SREC, so a system that produces 6,000 kWh would give someone about 6 SRECs annually. Since the state has required the utility companies to generate a specific percentage of their total electrical power using renewable sources, they will be compelled to pay the individual around $400 for each of those 6 SRECs so they can say that the indivdiual is generating electricity on their behalf. Consequently, that's an additional $2,400 in tax-free income going straight into one's pocket every year.
So now one can understand how a $16,000 solar panel system can easily get paid off in less than five years, as it nets $3,400 annually between electric bill savings coupled with SREC income.
Solar panels are also among the best home improvement options available to Massachusetts homeowners. With a cost of $16,000, it will increase the value of your home by $20,000. That works out to be a 125 percent return on investment. Nearly all home improvement projects won't ever pay for themselves completely. But solar panels not only increase the value of a home above what they cost, they earn money every year in the process. They're even exempt from property taxes for 20 years.
And let us not forget the primary reason these incentives exist in the first place – to save our planet. A 5 kW solar panel array is going to decrease one's carbon footprint by more than 100 tons of carbon dioxide over the next 25 years, the equivalent of planting 800 trees. Every year, it's going to prevent the equivalent of 3 tons of coal or 20,000 cubic feet of natural gas from being burned to generate electrical energy.
As one can see from the many incentives currently available, now is undoubtedly the right time to buy solar panels. The Commonwealth rebate along with the federal and state tax credits reduce one's initial expenses. And the electric bill savings combined with the SREC program supply significant income and also bolster a home's resale value.
However, there's simply no way to tell just how much longer each of these incentives will remain in existence. The Commonwealth rebate has already been decreased once, and the federal tax credit gets threatened every year.
Lastly, as this industry matures more and more financing options are becoming available to homeowners, including installer-sponsored 0 percent loans, making solar power affordable for everyone.