Solar Panel Cost Recuperation

Ira tracks the monthly financial performance of the solar installation (how much electricity we generate, how much we save in utility costs, and how much we earn in SREC sales) in a spreadsheet saved here.

The solar project turned a profit in 2022! The Solar Panel project was approved on the basis of expectations that:

• Our pre-Solar Panel monthly Utility Charges will continue unchanged until the project costs drawn from the Capital Reserves are recouped

• Other income sources applied to recouping Solar Panel project costs include: Tax Credit reimbursement from qualifying owners, Solar Renewable Energy Certificate (SREC) income, and selling energy produced by our solar panels back to Eversource,

In 2016, the Board (based on an analysis by SunBug) projected this investment to break even and allow us to lower our Utility Charges in 2023 (about 8 years). In 2018, the community elected to commit to Eversource's "100% Renewable Energy Sources" program resulting in an increase in utility costs of about 8 percent. With the benefit of knowing this and other actual costs, our adjusted projections had suggested that we will recoup our costs around 2024. In practice, the project turned a project for the community two years early.

2016 Solar Proposal Financial FAQs

6. How much will the solar system save Cambridge Cohousing?

• The solar system has been designed to produce a level of energy that is conservatively estimated to save Cambridge Cohousing $9,000-$10,000 per year of Eversource electricity expenses for the first several years.

• That annual savings represents avoided expenses that CCH would otherwise be paying to Eversource.

• The annual savings (avoided expenses) for Cambridge Cohousing will climb on an annual basis due to conservatively projected (2.5%) annual increases in retail utility rates (historically rates have escalated 4% to 5% per year), so that by the 10th year CCH’s annual savings are projected to exceed $11,000, $13,000 per year savings by the 15th year, and so on.

• Over the course of the next 30 years, Cambridge Cohousing is projected to save more than $400,000 in avoided utility expenses due to solar production.

7. Are utility savings the only benefit that Cambridge Cohousing will receive from the solar system?

• No, they’re not. Fortunately, Massachusetts is one of a handful of states to offer a Solar Renewable Energy Certificate (SREC) program.

• The SREC program represents a 10-year income stream for Cambridge Cohousing’s solar project, solely based on the energy production of the solar system (i.e., not dependent on utility rates).

• This income stream is in addition to the avoided utility expenses summarized above.

• Over the course of the 10-year SREC program, Cambridge Cohousing is conservatively projected to receive more than $95,000 of income due to the solar system’s generation of SRECs.

• For further information, the details of the Massachusetts SREC program are nicely summarized on the SRECTrade website.

8. I’ve heard that there are tax credits related to the solar system. How does that work?

• Every unit owner is entitled to receive both state and federal tax credits as a result of Cambridge Cohousing’s purchase of the solar system.

• A unit owner’s state tax credit is equal to 15% of their share of the solar system purchase price, capped at $1,000 per unit (a unit owner’s percentage share of the solar system is the same as their percentage ownership within the association).

• Likewise, a unit owner’s federal tax credit is equal to 30% of their share of the solar system’s purchase price.

• On average, each unit owner will be entitled to receive approximately $2,000 of tax incentives.

• SunBug will provide guidance to each unit owner on how to claim their respective tax incentives, but you are also encouraged to consult with your personal accountant or tax advisor for professional advice in these matters.