Metro®Boston, Publication Date: June 15, 2011
Expanded content
By Attorney George Warshaw
In addition to possibly having zero energy costs, there are a number of surprising ways a property owner in Massachusetts makes money by installing solar energy panels – including one way that generates a yearly check!
Tax Credits. Tax credits reduce your income tax. Current IRS rules permit a homeowner to claim a credit of 30% (no max amount) of the cost of purchase and installation of solar energy. Massachusetts provides a similar credit of 15% ($1,000 max) on state income tax.
Cash Rebates. Many towns have a program in which the homeowner receives a cash incentive for installing solar. Concord Municipal Lighting Company, for example, will rebate a buyer at the Riverwalk Condominiums in Concord up to $3,125 depending on the size of the system.
Yearly Income. Massachusetts, like some states, requires the power company generate a minimum percentage of its electrical power to end-users from certain renewable energy sources, such as solar.
Right now, the power companies can’t generate enough solar power. They make up this deficiency by counting the energy generated by property owners who have installed solar. The utility companies don’t, however, get to count it for free. They have to buy it each year – from you!
Here’s how.
A property owner receives one (1) Solar Renewable Energy Certificate (a “SREC”) for each 1,000 kilowatt hours of solar generated power. Generate 10,000 kilowatt hours, get 10 certificates.
According to Steve Weikal (617-596-2777, steve@concordriverwalk.com), solar panels on new condos at Concord Riverwalk by local solar integrator SunBug Solar (www.sunbugsolar.com) generate between 3 and 6 SRECs, a year, depending on the number of panels installed.
The power companies compete for these certificates through an auction process. In the most recent auctions, Massachusetts SRECs have been selling at over $500 each. If you acquired 3-6 certificates through your ordinary use, you would have received between $1,500 to $3,000, less brokerage commissions.
To sell your SRECs, you contact a SREC broker (they’re all over the web). SREC brokers function a lot like Fidelity or Schwab. Instead of selling your stock in Ford or GM, sign up online with a SREC broker and they take it from there.
Buy a solar-powered home, and put money in your pocket! ©2011 George Warshaw. All Rights Reserved.
References
Federal tax credit, http://www.dsireusa.org/incentives/incentive.cfm?Incentive_Code=US37F&re=1&ee=1
Massachusetts tax credit, http://www.dsireusa.org/incentives/incentive.cfm?Incentive_Code=MA06F&re=1&ee=1
Other Massachusetts tax/credit/rebate programs see http://www.dsireusa.org and search for Massachusetts.
See also http://www.srectrade.com/background.php on selling SRECs.
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George Warshaw is a real estate attorney and author. He represents buyers and sellers of homes and condos in Massachusetts, and prepares wills, trusts, and estate plans. George welcomes new clients and questions at george.warshaw@warshawlaw.com.
If you missed my column in the Wednesday Boston®Metro newspaper you can read it here! And contact me if you need help in buying or selling your home or in planning your will. - George
George in the Metro 