Going Solar in New Hampshire 2016
Not only is New Hampshire a great candidate for going solar in 2016 for climate reasons, but the state has taken a number of steps to make it very attractive to install solar panels on your property this year.
From rebates and tax credits to other incentives, there’s never been a better time to go solar in NH than right now. Of course, there’s more to converting to solar power than just getting the panels installed. If you’re like a lot of people, you likely don’t have an extra $16,000 to $20,000 lying around to buy a set of panels for a five-kilowatt solar power system. However, buying your solar panels isn’t the only way to go solar this year. In fact, you have a number of options.
Not only that, but there are a number of factors associated with going solar that you may not have considered yet. We’ll walk you through all of these to give you a better understanding of them and the whole process of going solar in NH.
- How to pay for solar power in New Hampshire, including leases, power purchase agreements, paying cash, and financing with a solar loan.
- What incentives the state of New Hampshire offers to go solar, including rebates, tax credits, property tax exemptions, and other incentives to make the whole process much more affordable.
- Considerations if you decide to sell your home after going solar, whether or not you own your solar power system.
- How to find the best solar installer in New Hampshire.
- Why New Hampshire is the best state in the US to go solar in 2016.
#1 How to Pay for Solar Power in NH (NH Solar Financing Options)
It’s no secret that a solar power system is a significant investment. An average photovoltaic system will generally run in the neighborhood of $17,000-25,000, depending on how many panels you intend to use. Fortunately, there are a number of options available to help you pay for solar power in NH. Each of these payment options has its own pros and cons, so you can benefit from learning about each one before making your decision.
Solar Leases in NH
If you don’t have a lot of cash to put down on a photovoltaic power system for your home, a solar lease could be a great idea for you. Basically, with a lease, instead of buying your solar panels and owning them, you’ll lease them from a solar power company. Essentially, this allows you to start saving money on your monthly power bill immediately without having to save a lot of cash or take out a loan to buy solar panels.
When you opt for a solar lease in New Hampshire, you will likely pay about $725 per year in leasing fees. Because the average cost of electricity is so high in New Hampshire, you’ll be able to see savings right away, as the average annual expense for electricity here is $1680. If your solar panels produce enough electricity to completely run your home, then you’ll save $955 each year. Of course, not all photovoltaic systems can account for 100% of your household power usage.
The average household using solar energy in New Hampshire saves about $1170 per year, which means that you’ll still be likely to save an average of $445 each year on your electric bill, even when you count the cost of leasing your solar panels. Not everyone can qualify for a solar lease, though, as the application process is similar to qualifying for a loan. Essentially, you’ll need to have a good credit score, and you’ll need to be able to prove that you’ll be able to pay off your lease fees when they’re due. This is not the only potential downside of a solar lease, so let’s take a look at a few pros and cons of solar leases in NH:
Pros of a Solar Lease:
• Start saving immediately on your power bill. • No need to save money or take out a loan. Pay $0 down and get your solar panels installed immediately. • The solar leasing company will almost always take care of normal maintenance and repairs with no charge to you.
Cons of a Solar Lease:
• You will not actually own the solar power system, and so you won’t be able to reap any of the rewards that come with ownership, like rebates, tax incentives, etc. • If your photovoltaic system doesn’t keep up with your electricity use, you could end up paying more, thanks to your electricity bill and your bill for your lease. • If you sell your home before your lease has expired, you could experience some issues. In most cases, you can transfer the lease to the new owners, but this can cause problems in finding buyers who are willing to take on a solar lease.
Power Purchase Agreements (PPAs)
In New Hampshire, you have another option – besides leasing – to work with a third-party solar company to get solar power to your home.
With a PPA, you will sign an agreement with a solar power company to have solar panels installed on your property for free. Then, instead of paying for the panels themselves, you’ll pay an agreed upon amount of money per kilowatt-hour for the power that comes from those solar panels. If the cost per kWh for traditional grid power increases, as it’s likely to do over the next few years, then you will get a good deal in that you will be locked into a lower rate for the duration of your power purchase agreement. Like a lease, though, you will not own your solar panels, and so you’ll end up missing out on all of the credits and incentives that owners get.
Furthermore, just like qualifying for a solar lease, you’ll need to go through the application process and ensure that your credit history and financial situation qualify you for a PPA. So why choose a PPA?
Pros of PPAs
• Like a solar lease, in New Hampshire, you will not pay any money down when your solar panels are installed. • You’ll be able to start saving on your electric bill immediately, as most PPAs have attractive kWh rates that are already lower than the going rate for grid electricity. • Also like a solar lease, when you opt for a PPA, the maintenance and repairs for your solar panels will likely not be on you – rather, they’ll be taken care of by your solar power provider. • If local electricity rates increase, you will save even more money for the entirety of your agreement. • In some cases, after about five years, you can opt to buy your system from your provider if you decide that you want to own it yourself.
Cons of PPAs
• Because you will not own your solar panel system, just like with a solar lease, you will not be eligible for any rebates, credits, or other solar incentives. • Paying for the electricity your solar panels produce now and then purchasing those panels later may result in an overall expenditure that’s significantly greater than if you bought your panels in the first place. • If local electricity rates decrease, you will still be locked into your power purchase agreement, and so you could actually lose money or end up saving very little. • Like a solar lease, with a PPA, if you sell your house, you will need to find a buyer who is willing to take over your agreement. Otherwise, you could be faced with hefty fines for breaking your agreement; you could end up spending significant money getting the solar panels removed or you could be responsible for paying for the electricity the house uses until the agreement comes to term.
Purchasing “All Cash” Solar Panels in NH
If you can afford to do it, paying cash for your solar panels in New Hampshire will likely be the investment with the biggest payoff. When you buy your own solar panels, you’ll be awarded all applicable rebates and incentives, and once you’ve paid off your installation fees and the price of your panels, you’ll essentially get free electricity for as long as you own your photovoltaic power system. Of course, just like any other means to go solar in New Hampshire, paying cash for your solar panels also has its disadvantages, as well as its advantages.
Let’s take a look at how the numbers work out, and then we’ll look at a few of the pros and cons of buying your solar panels outright. New Hampshire has a $750/kW rebate when you buy solar panels, which means that buying a standard five-kilowatt system will usually cost about $16,250 instead of $20,000.
Add to that the 30% credit you can get from the federal government in next year’s taxes, and the price reduces further to $11,375. As we mentioned earlier, the average energy savings for New Hampshire residents who go solar is $1170. If you factor this first year’s savings into the equation, you’ll essentially only have spent $10,205. If you continue to factor in your electricity savings each year, you can see that your system will pay for itself in just nine years, and after that, you’ll be getting essentially free electricity for as long as you keep the system – minus any costs for repairs and maintenance.
With such great incentives for buying, you might think that paying cash to go solar in NH would be a no-brainer, but let’s take a look at the pros and cons before we move on to the final option for bringing solar power to your home.
Pros of Paying Cash for Solar Power:
• Owning your panels means that you get all possible tax credits, rebates, and other incentives for going solar. • Your panels can pay themselves off in as few as nine years. • After you’ve made up the cost of your solar panel system in energy savings, you’ll basically get free electricity for as long as you own the system. • Paying in cash avoids interest charges on a loan or unnecessary expenditures when buying a solar panel system after a solar lease or PPA. • Solar panel systems add value to homes, so selling your house should not be difficult and may be even more lucrative for you than if you didn’t have a photovoltaic power system.
Cons of Paying Cash for Solar Power:
• You’ll have to pay the full amount for your solar panel system upfront. • It will take a few years (as long as it takes for your solar panel system to pay for itself) before your bank account sees any benefits from going solar. • You will be in charge of all maintenance and repairs to the system. Most solar power systems do come with a solid warranty that lasts several years, though, so this may not be a major problem.
Solar Loans in NH
For most people, though it’s the fastest way to pay for solar panels and reap the most benefits, $16,000 is a lot of money. Fortunately, though, there’s another way that you can own your photovoltaic power system without having to save a large sum of money to get started. With a solar loan, New Hampshire residents can purchase their solar panels and pay them off over the course of about 15 years.
And, not only will you not have to pay a large lump sum when your panels are installed, but your annual energy savings will nearly offset your loan payments. So how can you qualify to get a solar loan in NH? If you have enough equity built up in your home, you may be able to qualify for a HELOC (home equity line of credit) for the cost of your solar panels (usually about $16,250 after rebates). Interest rates for HELOCs are typically at or below 5%, and can be paid off in 15 years.
If you qualify for this kind of loan, your annual loan payments will likely total around $1542. Consider that you’ll be saving an average of $1170 per year in electricity costs, and you’ll see that your solar power system will only cost you about $372 per year. That’s just $31 per month. And that’s not even counting the tax breaks you’ll get in the first year after you buy your system. After your first year, thanks to the 30% tax credit, you’ll be over $4500 ahead of where you’d be if you decided to wait on going solar. Of course, a HELOC isn’t the only kind of loan that can pay for a photovoltaic power system.
You might also consider a secured or unsecured personal loan, financing with your solar installer, or seeking a federal loan through Fannie Mae. Look into your options and find out which one can give you the best interest rate to further lower the cost of going solar in New Hampshire in 2016.
Pros of a Solar Loan in NH:
• Your annual payments for your solar loan will be close to and may actually be less than the savings you get from going solar in New Hampshire. Thus, you can start to see savings right away. • You will be the primary owner for your photovoltaic power system, meaning that you’ll get all of the incentives and credits associated with going solar. • Depending on the loan repayment plan you choose, you could have your system paid off in 15 years or fewer. Then, over the typical 25-year lifespan of a solar power system, you’ll get 10 or more years of free electricity. • Typically smaller payments than a solar lease or PPA.
Cons of Solar Loans in NH:
• Depending on your credit history, how much collateral you have, and/or what kind of loan you choose, you may have to make a down payment on your solar panel system. • With a HELOC or any other type of secured loan, your home and/or another asset will be held as collateral and may be repossessed if you default on your loan. • Thanks to interest, you’ll always pay more for a solar loan than you would if you were able to pay cash. • You will be responsible for all maintenance and repairs to your system, even before the loan is paid off. Most of these should be covered under the manufacturer’s or installer’s warranty, though. • If your loan has not come to term by the time you sell your home, you’ll need to determine how to include the cost of the loan in the cost of the house. Otherwise, you’ll still be responsible for making payments on it, even after you no longer own the property. • Loan applications are a bit more in-depth than applications for solar leases or PPAs, and so they can take longer to process.
#2 NH Solar Incentives and Policies that Make Going Solar More Cost-Effective
New Hampshire is one of the best states in the US to go solar in 2016. Why? It offers numerous incentives to bring down the cost of going solar. Though New Hampshire isn’t perfect and doesn’t offer every single incentive available in different states, there are quite a few monetary reasons to go solar in New Hampshire in 2016. Let’s take a moment to discuss some of the most common incentives in different states and how they apply to New Hampshire residents who want to go solar.
New Hampshire Solar Power Rebates
New Hampshire is the fifth best state in the nation for solar power rebates. Through the New Hampshire Public Utilities Commission (PUC), you can get $750 per kW to pay back as much as 50% or $3750 of your solar power system’s costs (whichever number is less). Any home system up to 10 kilowatts can qualify for this rebate. In addition to this rebate, which is available to all New Hampshire solar panel system owners, you can also get another rebate if you’re a customer of New Hampshire Electric Co-Op. This rebate is worth $250 per kilowatt and will be paid out up to $1375.
With the two together, you can get up to $5000 back on your purchase.
New Hampshire Solar Power Tax Credits
New Hampshire doesn’t actually have state income taxes, which means that they cannot give any credits on them. However, because residents living in New Hampshire will still be paying federal income tax, they can still take advantage of the 30% federal income tax credit. With this tax credit, you can subtract 30% of the cost of your solar panel system from your federal income tax for the next year.
New Hampshire Property Tax Exemption
Installing a solar panel system can make your home’s value appreciate over 20 times the amount you save in annual energy bills. This can wreak havoc on your property taxes and result in tax payments so high that your energy savings go out the window completely. Fortunately, though, New Hampshire has a contingency for this. Towns and cities in New Hampshire may exempt this increase in a home’s market value, so that its property taxes remain effectively the same. Numerous cities and towns in the state have adopted this exemption, so if you live in one of these areas you will not have to worry about appreciation and its effect on your property taxes next year.
Solar Power Performance Payments
In some states, when you go solar you’ll not only save massive amounts of money on your energy bills each year, but you’ll also get regular payments from your local utility companies. These are called solar power performance payments. Unfortunately, New Hampshire doesn’t actually offer solar power performance payments. It’ll be interesting to see whether the state legislature takes any steps to add this incentive in the next few years as they attempt to meet their RPS (renewable portfolio standard) – the regulation that will require the state to continue to increase its renewable energy output. A solar power performance payment program is a good way to give people more incentive to go solar, thereby helping the state reach its RPS goals faster.
New Hampshire State Sales Tax Exemption
While New Hampshire doesn’t specifically have a sales tax exemption for solar panel systems, you won’t pay sales tax on your system because New Hampshire doesn’t actually have a state sales tax. So, instead of paying $16,000 plus a percentage in sales tax, you’ll just pay $16,000 (minus rebates and credits, of course).
Net metering is a means to measure how much energy you’re consuming versus how much you’re producing. To see any benefit from net energy metering, you’ll need to take the steps necessary to tie your solar power system into your local utility company’s grid. This process is called interconnection, and once you’re interconnected, and it allows your solar power system to feed energy back into the grid when you have excess. The power company can use net energy metering to determine how much energy you feed into the grid each month and pay you for it.
Thus, if your home is very energy efficient, you can not only save money by going solar in New Hampshire, but you may actually make money, as well. Of course, the amount that power companies can and will pay for solar energy fed into their grids is not limitless. However, last year New Hampshire Governor Maggie Hassan signed a bill into law that raised the cap on net metering from 50 megawatts to 100 megawatts. This means that residents are much more likely to qualify for net energy metering and to get some payment for their excess energy.
Selling Your House With a Solar Power System in NH
We’ve briefly discussed some of the potential benefits and challenges of selling your home after you go solar. Basically, solar panels can be a huge asset when you sell your home, or they can make it more challenging to sell, and it all depends on whether or not you actually own your panels.
Selling When You Have a Solar Lease or PPA
If you have agreed to a solar lease or a PPA, you’ve gone through the application process and you’ve agreed to pay a certain amount of money each month to either lease your solar panels or to pay for the energy that they produce. If you decide to sell your home before this agreement has come to terms, you should consider a few things. For one thing, solar energy is a big draw for buyers who don’t want to spend a ton of money every month on their electric bills. However, because they won’t actually own the panels, you will have to find buyers who qualify to take over your lease or PPA. In most cases, if your buyers are qualified to get a mortgage loan for your house, they will also qualify to take over your lease or PPA. If they don’t, you may want to add the cost of buying out the rest of the lease to the asking price for the house. And, in the case of a PPA, you may also want to look at the terms of your agreement to find out what it will cost you to uninstall the panels and re-do your roof before you sell.
Selling Your Home When You Own Your Solar Panels
As we mentioned earlier, solar panels can increase the market value of a home by up to 20 times the money you’ll save on energy bills each year. That amounts to over a $20,000 increase in your home’s value. Essentially, people will be willing to pay more for a home when they know that they’ll be saving a great deal of money each month on their energy bills.
Not only that, but if you live in one of the municipalities where you get a property tax exemptions, this is a huge selling point, as well. Your buyers will be getting a home that basically comes with free electricity, and they’ll be paying much lower property taxes than they’d normally expect to pay for a home of this value.
In some cases and in some neighborhoods, it does make sense to remove your solar panels and re-do the roof before you sell. However, remember that you can get your installer to put in your panels on your new home, and you can continue to save a lot of money on your energy bills.
All in all, selling a home with solar panels in New Hampshire is more lucrative than some other states for two reasons:
• The cost of electricity in New Hampshire is significantly higher than the national average. • Many cities and towns in New Hampshire have a property tax exemption for solar power systems. So, when you put your house on the market, you can advertise that your buyers won’t have to pay the exorbitant energy bills that they’re accustomed to in New Hampshire, and they won’t have any problem paying their property taxes, either.
#3 How to Find a Quality Solar Installer in NH
Of course, while going solar in New Hampshire has never been easier or a better investment, you should still be wary when it comes to finding a good solar installer. Just like hiring a contractor to remodel your bathroom or kitchen, there are a few steps you can take to find the very best solar power system installer for your home and your needs. Start by asking these questions and taking a few precautions:
• How long have they been in business installing residential solar power systems? How many installations do they typically do at a time, and how many have they done total?
• Are they bonded and insured? Does their insurance cover every member of their team? If not, you don’t want them working on your property, or you could be liable for any on-site injuries or accidents.
• Do their employees and team members do all of the installation work, or will they be subcontracting any work?
• Are they NABCEP (North American Board of Certified Energy Practitioners) certified? This will tell you that they’ve been through rigorous training and that they are qualified to do the job.
• Are they willing to provide you with references? Do they have any previous clients who’d be willing to talk with you about their experience?
• How long do they anticipate your installation to take, from beginning to end?
• Do they offer any financing? Find out about their terms for a loan, and do your homework on other lenders’ terms, as well.
• Do they have a set customer service policy and/or protocol for what happens if something goes wrong and/or if repairs or maintenance are needed?
• Does their estimate include all fees, or are there any additional hidden costs you should know about?
• Can they help you with the application process for interconnection? Do they have the ability to help you provide the right documentation for the application?
• Are they familiar with local policies on net energy metering and whether or not your property should qualify?
Why New Hampshire Is the Best State in the US to Go Solar in 2016
Now that you have a clearer idea of all that goes into going solar in NH in 2016, let’s take a moment to discuss why New Hampshire residents are some of the luckiest people in the country and why New Hampshire really is the best state to go solar right now. One of the Lowest First-Year Costs Like almost any other state, your upfront cost of solar panels in New Hampshire – if you pay cash – will be in the neighborhood of $20,000. That said, if you consider the many incentives, that number decreases significantly.
As a refresher, these include:
• Up to $3750 in state rebates • Up to $1375 in New Hampshire Electric Co-Op rebates • 30% federal tax credit on the price of the solar power system on your next year’s taxes • No state sales tax • No change in property tax
With the rebates alone, if you’re a New Hampshire Electric Co-Op customer, your initial cost will be reduced to $14,875. Add the savings you’ll get on your federal income taxes the next year, and your first-year expenditure for going solar is reduced to less than $10,000. Consider that you’ll save over $1100 in energy costs in that year, and that cost goes down even further. And, if you opt for a solar loan in New Hampshire instead of paying in cash, your upfront cost will be even lower. Your annual loan payments will be on average just under $1550. With your energy savings alone, your first-year cost will be around $450, and that’s not counting all of the incentives you’ll get.
Average Long-Term Savings in New Hampshire
You already know that your average annual savings in energy bills will be around $1170 if you go solar this year. In general, solar panels can be expected to last for an average of 25 years. If you did not have to pay for your solar panels, your total savings would be in the neighborhood of $29,250. Of course, you will have to pay for your panels one way or another.
Let’s take a look at how much you would save with each option for going solar.
• Solar lease – With a solar lease, you won’t get any incentives or rebates, but your monthly costs will be low to lease your solar panels. On average, you can expect to save around $725 per year or $18,125 over 25 years.
• PPA – Your PPA payments will likely save you about $15 per month from what you were paying for electricity before. Over a 25-year contract, that’s $4500.
• Paying cash – If you qualify for all possible incentives, and you pay in cash, your total cost will be around $10,000. That means, over 25 years, you’ll save $29,250, and that doesn’t count any money you could get back from your local utility company thanks to interconnection and net energy metering.
• Solar loan – The only difference between paying cash and a solar loan will be the interest you pay on the loan. With a 15-year loan, paying an average of $1542 per year, you’ll pay a total of $23,130 including interest for your solar power system. At the same time, consider that you’ll still get all applicable incentives, which would bring that total cost down to just over $12,000.
Thus, your overall savings would be $17246 – again, not including any money you’d get back from net energy metering. When you consider that either paying cash or getting a solar loan will mean that you own the solar panels and that they can add $20,000 to the value of your home – potentially without increasing your property taxes – you can see just how lucrative an investment going solar in New Hampshire can be. On average, homeowners who go solar in New Hampshire pay back their solar loans in 15 years or fewer, gaining 10 years or more of free energy, plus added value to their homes. From all of this information, you can see why there’s never been a better time to go solar in New Hampshire than right now.