In partnership with the District Department of the Environment (DDOE), Mapdwell has created and released to the public a cool solar power tool that you can play with. So that if you live in the District you can see what the cost and return of a solar system on your building’s roof top would be. The solar system size used is based on the size of the roof and is effectively the maximum size solar array you could install. You of course could install a smaller array. I randomly picked a residence with a roof about the size of my solar PV array to show the information the Mapdwell project provides and apologize to whoever lives there at using their address.
The Mapdwell project serves the purpose for education and outreach to District building and homeowners to test the economics of solar power for their building. The stakeholders for solar power are residents, businesses, installers, and government in the Washington DC city limits. It aims to advance information on costs and benefits of solar power and promote solar adoption for distributed generation of solar energy from roof tops.
You will notice in the chart above that the installed cost of solar power is $4.32/ watt. That is a reasonable cost estimate in today’s market for midsize array of 10 KWatt, but may be a little low for the smallest sites. The cost of solar power is very dynamic and constantly changing and there are several components to the return of a solar system. The first cost is the cost of the system. The market cost of solar panels and installation has been falling for years and according to the Mapdwell system would cost $30,482 for the purchase and installation of a. For the next couple of years the 30% federal tax credit is still available. The net cost of the solar system below after the tax credits was $21,337 for a 7.1 kilowatt system.
The monthly energy savings from the power generated would be $85 per month. Without additional incentives that would be a return of under 1.5% on your investment. However, you will notice that according to the Mapdwell system this solar array will earn $261 each month in SRECs. That appears to boost the return on investment to 19%, but what is a SREC?
A SREC is a credit for each megawatt hours of electricity that is produced (and used by me). SRECs have value only because some states have solar set asides from their Renewable Portfolio Standards, RPS, which require that a portion of energy produced by a utility be produced by renewable power. Utilities in those states buy SRECs from solar installation producers. It is a way for states to ensure that the upfront cost of solar power is recovered from utility companies (and ultimately from the rate paying consumers). Most states at this point require their utilities to buy SRECs only from residents of their own states creating a closed market where the prices typically start off high until supply responds to that price. Other states, like Virginia, have no current solar RPS requirement and their RPS is voluntary.
The legislation creating SRECs and RPS in various markets creates a situation where most markets loose SREC value. Without minimum price support, markets like New Jersey where SREC prices were once over $600 become oversupplied and collapse. There is always price pressure as the market over builds and the next project is willing to accept a lower SREC price. Then either the market collapses or the state closes its SREC market to outside systems and accelerates the solar carve out.
In the District of Columbia, after the market price collapsed, the market was closed, and the RPS requirement was accelerated. For the 49.6 megawatts of required average capacity for next year, there are over 28.3 megawatts of solar photovoltaic systems currently registered and certified in DC that are eligible for the DC SREC market, but DC allows a three year life on SRECS so any saved SRECs from the previous oversupplied period can be sold. Only 8.8 MW of the 28.3 megawatts are actually located within the District the others were registered and grandfathered before the market was closed.
The SREC prices in DC are currently the highest in the nation and will encourage the installation of solar projects within the district, but peculiarities of the market may slow the installation of solar projects in the short run. The SACP is currently at $300 and set to begin stepping down in less than five years ultimately reaching $150. In 2017 when the SACP is cut the market price of SRECs should fall to reflect that even if there is no sudden surge in solar installations in DC.
Of the SREC markets only Washington DC and Massachusetts are not currently oversupplied or at near balance with price supports keeping the SREC market viable. Washington DC may remain stable for a few years because as a city it has no large capacity projects and is closed to outside systems. To meet the existing solar RPS the city would have to increase its current installed solar capacity by putting solar panels on single family and multifamily residential buildings, government buildings, University dorms and museums- a much slower build out and would explain the funding of the Mapdwell project to reach out to possible building owners. Remember, that the SRECS are only viable for a few years they step down in value even without the market overbuilding.
Great article! You can update the cost per watt by simply clicking over it and overwriting.
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