Connecticut electricity prices average $0.21/kWh, more than 50% above the national average of just under $0.14/kWh. Solar accounts for nearly 2% of the state's power generation, more than ¾ of which came from rooftop solar in 2019.
Cost of a Solar Install
A graph of falling prices for a typical 7.5kW PV install in Connecticut from 2004-2018. Figures include design costs. Data from Berkeley Lab.
The average cost of a 7.5kW (equivalent to saving almost 150 trees a year) solar power system starts around $22,000 in Connecticut. Before any incentives, in the first year you’d save about $1,900, compared to if you had been paying the normal rates for the energy you used. These savings can continue for well over 25 years, improving with inflation.
Just How Much Can I Save With Solar in ___?
This depends on may factors such as your system size, power output, and financing. Here are the main ways you can finance your home solar power system, and the kinds of returns you may expect to see:
Out-of-Pocket
From our example above, the homeowner purchased a 7.5kW system to offset their energy bill. Overhead cost was $22,000, with a significant proportion returned in the first year through incentives, rebates, and savings, then paying itself in full over 8 years.
Most solar power systems have a warranty lifetime of 25 years. In that time, between incentives and paying lower rates you could make a profit of about $50,000 - more than twice the up-front cost of the system!
Even with occasional maintenance or part replacement, that is a massive savings. Solar panel power output falls on average 0.8% per year, so with a little TLC and load management you can extend the life of your system well beyond the warranty’s expiration date, continuing to save indefinitely.
Solar Loan
Whether or not you can afford the up-front cost of the install, you may want to consider a Home Equity Line of Credit (HELOC). With equity in your home, or good credit, you may qualify for a 15-year solar HELOC with fixed rate of 4% or lower.
Starting with that same 7.5kW system costing $22,000 but with zero up-front cost, accounting for incentives, credits, rebates, and annual energy savings starting around $1,800, you could see a revenue surplus of about $6,500 at the end of the first year.
It's very likely that at first your loan payments will slightly exceed your power savings. Before the term is up, rate increases should mean that you are making a net profit by about halfway into paying off the loan. Once the loan is paid off, you can expect to save about $3,000 a year. Over 25 years you could expect to make about $41,000.
Power Purchase Agreement
With a Power-Purchase Agreement (PPA) the homeowner leases their roof to an outside party, usually a power company. Generally PPAs feature a fixed price per kWh, with either a fixed term or an annual escalator.
With a PPA, the cost of installation, repair, and maintenance to the homeowner is usually $0.00. For that 7.5kW system, with a PPA you could expect to save about $60/month on energy. Over 25 years, you could see NEARLY $20,000 in revenue - without accounting for inflation. That’s technically an infinite return!
PPA’s can be complicated, as you are effectively ceding at least some control of your home to the third party, but they are an excellent way to get into solar because they have no overhead.
