Thinking about getting solar panels for your home? U.S. Clean Energy Fund (USCEF) installs solar panels for residential customers. Read on to learn more.
Sizing Your System
Solar installations are sized based on their maximum power output, measured in kilowatts (kW, equal to 1,000 Watts). The average residential installation size is 5 kW. This is equivalent to about 18 solar panels, each measuring 5.5’ x 3.5’ in size.
The most economical choice is to install as much solar as you can. The larger your system is, the lower your installation price (per kW) will be — and your utility must compensate you at full price for all of your solar energy, even if it’s more than you actually use. And with USCEF solar financing, you don’t have to worry about a large up-front cost.
However, some customers choose to size their system to match their current electricity usage based on their utility bills. On average, you can expect each kW of solar panels in the Minneapolis/St. Paul area to generate about 1,150 kWh of energy per year. (This figure accounts for cloudy days, nighttime, seasonal variation, and snow cover.) If you go this route, consider that your electricity usage may increase over the 25-year lifetime of the system — especially if you ever switch to an electric car!
How Much Will I Earn From My Solar?
For each kWh of energy generated by your solar power system, you will earn the full retail value from your utility — whether it’s from savings from lowering your usage or credit for supplying power to the grid. As of 2017, this retail value ranges from 11-13¢ in the Minneapolis/St. Paul area. Industry analysts expect this value to increase over time, by 2-5% annually. This means by the time your solar installation is ready to be replaced, the electricity it generates may be worth twice as much as it is today!
Solar panels are guaranteed by their manufacturers to last for 25 years. However, their power output degrades slightly over time (about 0.5% per year). Most panels are guaranteed to retain 80% of their capacity throughout their 25-year warranteed lifetime.
Adding It All Up
Consider a 5kW system for a customer paying 12¢/kWh for electricity. This system can be expected to earn about $700 of savings and credits in the first year.
Now, suppose that the value of solar electricity increases each year by an average of 3%. This system can be expected to earn about $23,500 in total savings and credits over the 25-year warranteed lifetime.
Special Incentives from Xcel Energy and Dakota Electric
As an extra bonus, the two largest utilities in the Minneapolis/St. Paul area provide extra incentives for their customers with solar.
- Xcel Energy provides an extra 8¢/kWh bonus for the first 10 years through their Solar Rewards for Residences program. For a 5kW system, this can be expected earn an additional $4,500 in electricity credits. Get more details here.
- Dakota Electric also provides an extra 8¢/kWh bonus, up to a total value of $500/kW of capacity. For a 5kW system, this will earn an additional $2,500. Get more details here.
Both of these incentives are limited to systems no larger than 120% of your annual usage. Additionally, the Xcel incentive is limited to a max size of 20kW; Dakota’s is limited to a max size of 8kW.
How Much Will My Solar Cost to Install?
The installation price for solar varies based on the size of the system, the conditions of your roof, and the amount of electrical work required. For most residential customers, the price will range from $2.50-$2.75 per Watt. An average 5kW system would cost about $13,000. That’s $10,500 less than the lifetime value of the system!
Additionally, the federal government allows a 30% tax credit for solar. This means that when you file your tax return next year, you can get 30% of the cost back — reducing the effective price to $9,100. Note that this tax credit is non-refundable, so it can only be applied against income tax you have actually paid.
Zero-Down Financing from U.S. Clean Energy Fund
U.S. Clean Energy Fund offers financing for our solar installations with zero money down. Read more about our innovative solar financing model here.
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