How do the 30% tax credit work?
Unlike a tax deduction, which reduces the amount of income that is taxed, a tax credits is a dollar for dollar refund by the government of a percentage of the money you spend on your solar system. The current Federal Tax Credit is 30%. So a $30,000 solar system investment would generate a $10,000 tax credit. The New Mexico State tax credit was 10% but is no longer available.
Will I really save any money?
A solar system purchase will offset the cost of electricity provided by the Utility. This is an escalating utility cost generally escalating over time at 3% to 5% increase per year. When you purchase a solar system you are trading an escalating rent of electricity for a fixed purchase that will eliminate paying for electricity for decades to come. When you compare the set cost of the equipment purchase minus the benefits of the tax credits to the cost of escalating electricity from the Utility, the return on investment period is generally 4 to 8 years depending on the utility and against the escalating utility costs for decades to come. That means that after you have paid off the system cost you will have no usage costs for decades saving thousands of dollars per year for a very long time. You are essentially purchasing your last utility bill like you would purchase your last car or home. Unlike almost anything else you have purchased, solar eliminates another bill. Most purchases just create more bills.
Will my solar work when the grid goes down?
A solar system works in cooperation with the grid. When the grid goes down the solar system will stop passing electricity to the electric panel in your home. This is because the electric panel in your home is directly connected to the grid. Efforts by the Utility to segment the affected area of the grid and effect repairs would be impacted by homes passing solar generated energy to the grid. This could result in injury or death to the lineman. For this reason solar systems stop passing electricity when the grid is down. To overcome this requires what is called a battery backup system takes over the job of protecting the linemen by shutting down access to the grid when it is down and drawing electricity for the home from the batteries. Battery systems and the related equipment can easily double the cost of a solar installation and the batteries have a limited lifespan and a high replacement cost. If you are not experiencing recurring, debilitating services outages it is best stay grid connected and save the money on battery backup. Net Metering and solar allow you to eliminate the escalating energy bills and that is generally what people are seeking to mitigate. As the year pass, battery backup and off-grid systems are maturing and coming down in cost. Now is a good time to install a grid tied solar system to eliminate the usage bills. If in the future you are in a position or externally motivated by Utility policies to invest in battery backup you will already have the solar required for generation. It is for most people a one step process to acquire solar and hopefully the second step to acquire battery backup will not be needed. If it does come to pass that your require batteries (storage and backup) you will already have the solar (generation) expense out of the way.
Should I look at a leasing option?
Leasing program have come about to solve affordability problems. This is helpful to some customers but is also a way to increase sales for solar providers. Some customer lack tax liability and are not eligible for the tax credits. Others have poor credit, low income, high debt or poor payment histories. If you are considering a lease you should exercise extra diligence to read the contract fully, understand the sizing of the system in relation to your usage history and uncover any clauses that specify escalating payments or conditions that in the event of a sale of the home may prove a disadvantage. Leases like cars and equipment are generally best for businesses that face different financial challenges. Make sure the lease is serving your individual situation and goals and not those of the lease company, as you will be paying on that lease for up to 25 years.
What’s the process to get solar?
The optimum goal of installing a solar system is to offset the quantity of kilowatt-hours (KWH’s) of electricity you purchase from the Utility with KWH’s generated by the solar system. Osceola Energy takes great care to size the system our customers’ needs and budget. Once the customer approves the size and price of the system we sign contracts and the process of getting solar to our customers begins. We design plans from a site map to an electrical one-line diagram. These documents are then submitted to permitting and the Utility for interconnection. Once both of these departments approve the submitted documentation we begin the installation of the solar system. This process only takes a few days. Then we get inspections and PNM will install a meter and turn on the system. Once the job is complete we closeout the project with all the cut sheets, manuals and warranties our customers will need for their system.
3004 2nd Street NW
Albuquerque, NM 87107
8:00 am – 5:00 pm Monday – Friday