Solar FAQs

Gloucester Solar Challenge, sponsored by TownGreen2025 a local non-profit, is encouraging the adoption of small-scale solar electricity in Gloucester. We are using volunteers for community outreach and group purchasing power to reduce installation costs. The Gloucester Solar Challenge is modeled after the popular Solarize Mass programs run by the Massachusetts Clean Energy Center (MassCEC) and the Green Community Division of the Massachusetts Department of Energy Resources (DOER)

• For those who have the option to install solar electricity, and given the current financial incentives, it is less expensive than electricity sold by utility companies.
• Solar electricity produces no carbon or other greenhouse gases. Utility companies usually produce electricity by burning oil and gas which produces carbon and other “greenhouse gases”. The tremendous build up of these gases over the last 100 years has produced permanent changes in our atmosphere resulting in ongoing climate changes.
• Solar power is reliable, noiseless, safe, and adds value to your property without increasing your property taxes.
• Solar electricity supports our energy independence.

1. This program will offer significant savings over current market prices. Direct Energy Solar is able to provide this discount pricing by securing a large number of contracts in the same geographical area, and through their ability to bulk purchase the installation components. They will pass this savings to Gloucester resident until Gloucester Solar Challenge ends on April 30, 2016.
2. In addition, the incentives currently available from the State of Massachusetts, along with a Federal tax credit, make this a particularly attractive time for solar investments. However, the very generous 30% Federal tax credit is scheduled to end on December 31, 2016, and its renewal is questionable. The Gloucester Solar Challenge is designed to address this possibility, insuring that all new systems are up and running by that date as required to take this tax credit.

Incentives come in several forms and when combined, they make going solar very cost effective.

Tax Credits:

• 30% of the initial cost of your solar system can be used as a credit against your Federal income tax. For example, 30% of a $15,000 system redirects $4,500 of your money from a tax payment to money toward your solar installation cost. Currently you can carry forward any unused credits until the next year.
• The Massachusetts State income tax credit of 15% allows up to a maximum of $1,000. In addition, residential solar electric systems are exempt from State sales tax and under Massachusetts law, solar panels are exempt from local property taxes for 20 years after they are installed. The cost of the $15,000 system is now down to $9,500.

Solar Renewable Energy Credits (SRECs):

For the first ten years that your solar system is in operation, your system will create one solar renewable energy certificate (SREC) for every 1,000 kilowatt-hours (kWh) it generates. You get 1 SREC for every kilowatt hour generated by your system even though you have used this electricity. SRECs can be sold at market value which ranges from $200-$300 apiece. For example, if your system generates between 4-5 SRECs per year, you would receive between $800 to over $1,000 every year for 10 years. Transactions are typically handled by an SREC broker who sends you a check quarterly. You can use Direct Energy Solar as your SREC broker or you may use any broker of your choice.

Mass Solar Loan: Mass Solar Loan makes it easy for Massachusetts residents to obtain low-interest loans to fund the installation of solar electricity systems for their homes. Loans will be available at specific banks state wide with rates of less than 3%. Low-interest loans are available for Massachusetts residents and property owners, including renters and those with moderate incomes or low credit scores. The program includes easy-to-access incentives through lenders that help Massachusetts residents go solar by providing:

• A low-interest, fixed-term loan for homeowners and residents
• Additional loan support for income-qualified solar owners
• solarloan@masscec.com

• Sufficient sun exposure on your property
• Roof in good condition, or land for a ground mount
• Ability to finance (see Mass Solar Loan Program)

Homeowners can choose from typical types of financing options such as refinancing their mortgage or a home equity loan.

But a new Mass Solar Loan program, due to start in December, will be offering especially attractive rates for Massachusetts homeowners. This loan program has been specially designed to encourage the purchase of solar energy systems by offering homeowners subsidized solar loans with below market interest rates. Homeowners who are approved for Mass Solar Loan can expect:

• An interest rate of 3 percent or lower
• A loan for between $3,000 and $35,000 (or potentially higher)
• A loan term of up to 10 years or more

BUT there are other important financial factors to consider!

• Your monthly electric bill will be reduced or eliminated, allowing money usually paid to National Grid to go towards your loan payment. Once your loan is paid off, you will be saving the full amount of your previous electrical bill. Your solar panel system will generate free electricity over its entire working life—25 years or more.
• The money you receive for selling your SRECs can also contribute to your loan payment. Unlike leasing, when you own your solar panels you are entitled to between $200-$300, depending on market value, for every 1,000 kW you produce. This can add up to thousands of dollars over the ten year life span of the SREC.

This choice depends on factors specific to each homeowner. Direct Energy Solar staff can explain each option.

Generally, solar leases and PPAs are a good option for consumers who:

• want a $0-down option, and/or
• are unable to use the Federal Investment Tax Credits (ITC) and state tax credits.
• have a good credit rating
• want to use green energy and reduce their carbon footprint
• want to save around 25 to 30 percent of their electric bill per month

The downside of Solar leases and PPAs include:

• Leases usually last for 20 years.
• The home owner does NOT own the SRECs generated by the solar panels which can produce $1,000 or more per year for 10 years. The money from SRECs goes to the leasing company.
• The home owner cannot benefit from the federal and state tax credits which can amount to thousand of dollars towards the purchase price and the equity in your home. The home owner forfeits, to the solar lease or PPA company, the tax credits. A mandatory condition of both of these rental programs is that the solar lease or PPA company gets the 30% federal tax credit. The 30% federal tax credit alone is typically worth anywhere from $3,500 to well over $10,000.000.This money would have gone into the homeowner's pocket.
• Solar leasing companies tend to emphasize the benefit of providing maintenance and repairs to the solar panel system. But these systems are highly durable and generally require little or no maintenance. Additionally, there are warranties on the equipment and installation.

Condo owners should be encouraged to look into solar electricity. There are technical and other solutions that make it possible to install solar electricity for condos.

Renters cannot install solar electric systems, but owners of rental property can. Since each situation is different, you should explain your situation to Direct Energy Solar so they can come up with the best solution.

YES! In addition to all the benefits available to a residential owner, a business may claim a five-year Modified Accelerated Cost Recovery System (MACRS). Although the system life is typically greater than 25 years, accelerated depreciation (i.e. MACRS) for a long system life dramatically increases the after-tax financial return of the solar project.

Direct Energy Solar have specially trained sales people to work with businesses.

Your home electrical system is always hooked up to National Grid. The grid is a two way street. If you need extra electricity it is there for you, and you will be charged the current National Grid rate. If you do not use the electricity when it’s generated, National Grid will apply it to future months when you use more electricity than you generate. This “net metering” allows you receive the benefit of every kilowatt-hour of electricity your panels generate.

If you find your solar panels regularly produce a credit of electricity on your utility bill there are some options for you to allocate these credits to another electric account such as that of a relative, nonprofit, church, or second home.

YES, Check out the new (12/15) MASS SOLAR LOAN program.

http://www.masscec.com/programs/mass-solar-loan

Mass Solar Loan makes it easy for Massachusetts residents to obtain low-interest loans to fund the installation of solar electricity systems for their homes.

The $30 million program, a partnership between the Massachusetts Department of Energy Resources (DOER) and the Massachusetts Clean Energy Center (MassCEC), connects homeowners interested in solar electricity to solar installers and lenders that have available financing options. Through the program, lenders offer low-interest loans for Massachusetts residents and property owners, including renters and those with moderate incomes or low credit scores. The program is financed through $30 million of Alternative Compliance Payments from the Department of Energy Resources. DOER provides program and policy oversight of the Mass Solar Loan program while the MassCEC acts as the program Central Administrator.

The program includes easy-to-access incentives through lenders that help Massachusetts residents go solar by providing:

• A low-interest, fixed-term loan for homeowners and residents
• Additional loan support for income-qualified solar owners (see income guidelines here)

For Consumers and Homeowners

Solar electricity can provide you with lower cost electricity. Follow the steps below to get started.

1. Learn about solar electricity.
2. Receive a price quote from a pre-qualified Mass Solar Loan installer. A list of eligible installers and resources to help you choose an installer can be found here.
3. Select an installer and sign a solar system installation contract. The contract should be contingent on receiving a loan from a participating Mass Solar Loan lender (Downloadable List). Assist your installer in completing the Mass Solar Loan technical application in the Mass Solar Loan online portal. Your installer will help you determine if you are eligible for Income-Based Loan Support.
4. Provide your tax information to the third-party income verifier via their secure online form, if you are applying for Income-Based Loan Support. You will receive an email providing instructions for filing the right forms.
5. After your installer completes the technical application for your project in the online portal, you will receive a Technical Confirmation document via email. Provide the Technical Confirmation to a participating bank or credit union. While terms may vary, lenders will offer 10-year fixed-rate loans between $3,000 and $35,000. Lenders also have the discretion of offering loans up to $60,000. As of December 16, 2015, the maximum interest rate for a Mass Solar Loan is 3.25 percent.
6. As you close a loan with your preferred lender, the lender will reserve support funds in the Mass Solar Loan portal. The lender will then disburse 35 percent of your loan amount, at which point an interest-only period begins (up to 12 months) while your solar system is being constructed.
7. After your solar system has been connected to the electric grid, your installer will file project completion documents. Upon approval of those documents, the remaining 65 percent of your loan will be disbursed.

YES, the MASS SOLAR LOAN program has several incentives.

go to: http://www.masscec.com/programs/mass-solar-loan to learn more.

or call: Read, Kelsey Mass Solar Loan Project Manager 617 315 9301

Loan Support Incentives

The Mass Solar Loan Program includes three incentives to help Massachusetts residents go solar:

Interest Rate Buy Down

The Mass Solar Loan program reduces the annual interest rate paid by solar system owners by 3 percent below the typical rate charged by participating lenders. This Interest Rate Buy Down is available to all solar system owners regardless of income.

Loan Loss Reserve

Depending on a resident’s credit score, lenders may be eligible for additional incentives to help their customers go solar. If a resident’s credit record is less than perfect, they should ask a participating lender if they might qualify for the Loan Loss Reserve incentive.

Income-Based Loan Support

Consumers with annual household incomes $80,240 and below may be eligible to have the Mass Solar Loan program pay a portion of their loan principal when the project is complete. An independent party will verify household income as part of the qualification process. Incentive rates are shown below.