FINANCIAL PROJECTIONS
How quickly can you realize back your investment and make a profit on the energy you produce?
This sample financial projection takes an average system size and makes certain assumptions (stated below) to anticipate how quickly you may be able to realize back your investment and make a profit on a solar electric system. This estimate is for illustrative purposes only, with assumptions that are subject to revision. Actual results may vary.
4,000 Watt Residential Solar Electric System
(AC KWh Production of 5240, Year 1)
Sample Financial Projection over 15 Years (2009-2023)
Highlights:
- Half the cost of your solar electric system is realized after installation through the federal tax credit and NJ state rebate.
- You break even by year 5.
- Your average annual profit after breaking even isabout $3,000 per year.
- Your total profit for years 5-15 is over $32,000.
| Details of Sample Projection | |
|---|---|
| Initial cost of system (including permits): | ($32,000) |
| 30% federal income tax credit: | - $ 9,600 |
| NJ state rebate ($1.55/watt): | - $ 6,200 |
| Net starting cost of system: | ($16,200) |
| Projected revenue from electricity sales for years 1-5: | - $ 3,518 |
| Projected revenue from SREC sales for years 1-5: | - $14,968 |
| Net revenue in year 5 after breakeven: | $2,286 |
| Projected revenue from electricity sales for years 6-15: | $7,872 |
| Projected revenue from SREC sales for years 6-15: | $22,112 |
| Projected net revenue over 15 years: | $32,370 |
Assumptions:
- 2% annual increase in utility KW rate
- Projected SREC value in year 1=$625, year 2=$600, year 3=$575, year 4=$550, year 5=$525, years 6-10=$475, years 11-15=$400
- SREC value does not fall below $475 for first 10 years based on PSE&G guarantee for its loan program, which is likely to influence minimum market price
- .33% annual loss in system efficiency
Note: This estimate is for illustrative purposes only, based on assumptions that are subject to revision. Actual results may vary.