Solar’s Value Found to be Well Above Cost in PA and NJ

solar energy investment

Studies have found that solar greatly adds value to homes in New Jersey and Pennsylvania.

A study conducted in Pennsylvania and New Jersey found that the value of solar power to the electric grid is significantly above its cost.   The study recently released by the Pennsylvania Solar Energy Industries Association (PASEIA) and the Mid‐Atlantic Solar Energy Industries Association (MSEIA) analyzed data related to utility cost, particularly costs associated with solar generation during peak hours of demand.  The results should serve to boost the confidence of anyone interested in investing in solar energy, since total installation cost is expected to continually decline. The study found that these solar installations add value for homeowners in these states.

In Pennsylvania and New Jersey, energy providers are required by law to purchase a certain amount of solar power annually.  The energy companies pay a premium for the sun’s energy in the form of Solar Renewable Energy Certificates (SRECs), and the cost is passed on to ratepayers.

value of solar

You may be eligible for a 2:1 return on your solar investment in New Jersey and Pennsylvania according to a recent study.

According to the study, the total levelized value of solar power ranges from  $256 to $318 per megawatt hour (MWh), which comes to 25.6 cents to 31.8 cents per kilowatt hour (kWh).  These figures are inclusive of a premium value ranging somewhere between $150 to $200 per MWh or 15 cents to 20 cents per kWh above the value of the solar energy that is generated.  In New Jersey, SRECs currently cost approximately $60 per MWh, which comes to about 6 cents per kWh.  In Pennsylvania, SRECs cost only about $20 per MWh or 2 cents per kWh.

President of MSEIA Dennis Wilson explained that electric ratepayers who have invested in solar energy in the areas in which the study was conducted are receiving a better than two-to-one investment return.  He said that, while currently unsustainably low, SRECS can deliver net benefits, support strong solar energy growth, and increase in price.  With this study, it has been proven that solar power can deliver value which significantly exceeds its cost.  In fact, the value of solar power can exceed its cost by 50% to 200% or more using the rate of return calculated over the life of the system.  As the cost of investing in solar technology continues to drop, the net positive benefit will only rise.

New Jersey, the USA’s second largest solar market with a solar capacity of 900 MW is the first state in the nation in which 1% of its annual electricity is solar energy.  The renewable portfolio standard for New Jersey has significantly increased its solar carve-out to 4.1% by the year 2028.

Pennsylvania’s solar carve-out is currently at about .05% and is set to reach .5% in 2021.  Pennsylvania is now eighth in the nation for installed solar capacity.

The study concluded that distributed solar power offsets the demand for conventional power sources and delivers measurable benefits, which include:

•    Reduced outages because the electric power system is more reliable;
•    Reduced need to build generating plants that utilize coal or natural gas, which also reduces the cost to operate and maintain plants;
•    Lower conventional electricity market prices because there is a reduction in peak demand;
•    A valuable price hedge is in place as a result of using a free renewable fuel as opposed to fossil fuels, which are variably priced;
•    Enhanced tax revenues that are generated by local job creation for solar installers as compared to those jobs associated with conventional forms of power generation.

It’s possible that the conclusions of this study supply valuable data which any state may want to use as a stepping stone to an increase in required solar capacity.

If you would like to take advantage of this solid solar investment, install solar panels on your home from our solar store locations in New Jersey or Pennsylvania. Our New Jersey member location, Bowden’s Solar Store, is located in Hamilton, NJ and our Pennsylvania member location is at Tall Pines Farm Solar Store located in Kingsley, PA. Each of our locations are trained by the NASS Solar Training Institute and are prepared to design and install a quality solar system on your home.

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