How to Invest in Solar Energy in New York State

New York has one of the most progressive Clean Energy laws in the United States. In 2015, the State passed the Sustainable Energy for All Americans (SEAA) Act which mandates 100% of the state’s electricity come from renewable sources by this year. What’s more is that 20% of that renewable electricity must come from solar energy. As a part of this Act, New York State implemented a program that provides financial compensation for eligible homeowners who install solar panels on their property.

Under this program, known as Renewable Energy Credits (RECs), eligible New York homeowners receive a cash payment for each kilowatt-hour (kWh) of solar energy they produce that is more than sufficient to offset the cost of installation. To be eligible, your home must be located in a designated solar ZIP code, have a capacity of at least 1 kilowatt (1,000 watts) and have an efficiency level of at least 16.67%.

There are four major benefits to investing in solar energy, according to the Solar Energy Industries Association (SEIA). First, clean energy is good for the environment. Production of solar electricity generates no air pollution, and it is entirely carbon-free. Second, solar electricity is reliable as the sun always shines, and there’s no chance of it getting lost.

Third, you’ll enjoy reduced energy bills. According to the SEIA, households that installed solar energy experienced a 16% average decrease in their energy bills. Those who are interested in renewable energy sources but were put off considering them because of the expense, should know that costs diminish with use. Finally, you’ll gain a great sense of accomplishment in providing your own energy source.

How Does It Work?

If you meet the requirements, stated above, you can apply for a New York State solar farm loan through one of the following mortgage lending companies: Capital Spectrum, Citi, and Sunnova. Each of these companies has its own unique way of doing business, but they all offer first-time home buyers and purchase loans with low down payments and flexible repayment terms. In exchange for these loans, homeowners agree to install 1 kilowatt (1,000 watts) of solar energy equipment on their property.

When you install the 1 kilowatt of solar equipment, you are effectively installing a 1,000 watt solar panel system. The energy produced by this system will offset your household’s energy consumption. With each kWh costing about 4.8 cents on the open market, your monthly electricity bill will decrease by nearly $20. To cover this cost, you will need to sell the energy you produce to the grid at about 11 cents per kWh (including taxes).

The New York State Solar Loan Program provides direct compensation for the energy you produce while benefitting the environment by reducing pollution and dependence on non-renewable resources. In fact, the solar loan program in New York is one of the best in the country.

How Much Does It Cost?

Taking out a solar loan in New York is more expensive than buying or leasing renewable energy directly from the source. However, it is still considerably less expensive than what you would pay for electricity from the grid, as discussed above.

The cost of the New York solar loan program is based on the size of your system. For example, the cost of a 1 kilowatt system is about $16,000 and it can range from $12,000 to $20,000, depending on whether you purchase or lease it. You will need to provide proof of income and assets to obtain the lowest possible rates from the state’s loan provider, the Public Service Commission (PSCA).

While the cost of a 1-kilowatt system is high, it is still considerably less than what you would pay for electricity from the grid. Moreover, with the cost of solar electricity decreasing each year, it has become a more affordable option for consumers.

When Do I Start Seeing The Savings?

According to the New York State Energy Research and Development Authority (NYSERDA), loans with interest rates as low as 4% per annum and 30-year payment terms make the benefits of going solar clear immediately. In particular, NYSERDA states that New York homeowners who installed solar energy systems saw a reduction in their power bills of 16% on average. This equates to about $200 per month for the average household.

In the long term, expect to see the savings from your solar investment offset the cost of installation within three to five years. After this initial period of time, you will continue to see your monthly energy bill decrease as your energy production exceeds your consumption. This is because solar energy is not consumed directly by your household, but it is sold to the grid, which then provides electricity to those individuals who are consuming more than they produce.

In summary, New York State is committed to protecting the environment and providing economic opportunities through its groundbreaking Renewable Energy Law. By implementing a program that encourages its citizenry to generate their own clean energy, the State ensures that it will continue to derive its electricity needs from renewable sources and decrease its reliance on fossil fuels. What’s more is that homeowners who participate in the State’s solar program gain some financial benefits from their investment in renewable energy.

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