This 3.2kw solar electric system just installed in New Hampshire will generate over 4,000 kWh of electricity each year.

We’ll often say that the only limiting factors of a grid-tied solar electric system’s size are available roof space and budget.

If you have a huge roof with great southern exposure, you can install enough solar to produce more electricity than you’ll ever need.

Most homeowners, however, choose to offset a portion (say 30-50%) of their overall use.

Here are a few steps on how we calculate what you use and how to size a system accordingly:

Find Out What You Use

One of the first things to do is look at your electric bills, which will give you can get a good handle on what your energy needs are each month.

You’re billed based on how many kilowatt hours (kWh) of electricity you use. A kilowatt hour is simply a measurement of energy – 1kWh = 1,000 watts * 1 hour.

Every appliance in your home has a wattage rating which, multiplied by the number of hours you use it per day, will give you an idea of how much it contributes to your electric bill.

Conveniently, most electric bills include several months of data so you can get a rough average of what you use over a longer period of time. It’s also helpful to compare winter vs. summer data as your needs might vary widely – for instance, if you use electric space heat your use might spike in the winter; on the other hand, if you use air conditioning your use might spike in the summer.

Once you have a basic handle on how much you consume, you can see how much impact a solar electric system will have on your bill.

How Grid Tied Solar Cuts Down Your Electric Bill

The beauty of a grid-tied solar electric system is that we use the electric grid as a battery.

When you produce more electricity than you consume, that energy goes out to the grid and is credited to your account. When you are using more electricity than you are producing, you simply use grid power as normal, and deduct accumulated credits off of your bill.

This means two things:

• You can produce more than you use in the summer and benefit from that overproduction during the dark winter months.
• You can install a system that provides less than 100% of your needs and still benefit from all of the electricity it generates.

A 1 kW solar electric system will produce 1,000 watts of electricity when in full sun. If you get an hour of full sun on that system, you’ll have generated 1 kWh.

In New England, we’ve found that each kilowatt of installed solar will generate roughly 1,300 kWh of electricity each year, varying a bit depending on where you are in Maine or New Hampshire.

By taking the amount of kWh you consume, and dividing them by 1,300, you can get a ballpark estimate of how many kilowatts of solar you would need to completely offset your electric usage.

Solar Energy at Work

Let’s look at an example based on the typical American home. The US Energy Information Agency estimates that the average home uses about 10,656kWh each year (Source: End-Use Consumption of Electricity 2001).

That means the average American home would require a 7.6kw solar electric system to completely offset their electric needs  (10,656/1,400 = 8.2).

Realistically, most homeowners opt for a 3-5kw system to offset a portion, but not 100%, of their electric needs, and either work towards a second solar system sometime in the future or work towards reducing their load to match their solar production as closely as possible.

We’ve covered the economics of solar electricity before – by purchasing solar you’re basically locking in your electric cost at below market rates for the next 40-50 years. A great buy in an increasingly uncertain energy climate!

The Granite State has already been a solar leader in New England with their generous $6,000 cash rebate for residential solar electric systems up to 5kw as well as an average $1,500 rebate for solar hot water.

Now New Hampshire has taken the next step – mandating utilities to pay the customer for excess electric generation!

Yes, New Hampshire now requires utilities to pay customers when their solar electric system generates more electricity than they use.

The legislation, House Bill (HB) 1353 states that:

the customer-generator may elect to be paid or credited by the electric distribution utility for its excess generation at rates that are equal to the utility’s avoided costs for energy and capacity to provide default service as determined by the commission consistent with the requirements of the Public Utilities Regulatory Policy Act of 1978 (PURPA)

Emphasis Added

Wow!

How Much Will I Be Reimbursed?

In Germany, getting paid for solar electric generation is well-known, the special rate that you receive for excess solar electric generation is called a feed-in tariff.

New Hampshire’s program is a bit different, in that customers will get reimbursed closer to market rates for electricity, rather than a special “feed in” rate (which, in Germany, generates a roughly 8% return on investment for owners of solar systems).

The legislation puts it this way:

Each net energy metering tariff shall be identical, with respect to rates, rate structure, and charges, to the tariff under which a customer-generator would otherwise take default generation supply service from the distribution utility.

While the legislation is still in the process, should the full distribution cost of electricity be included in the reimbursement, that would result in a rate of close to .15c/kwh. We will post a follow-up once we better understand the details of the program!

When Can I Get Started?

The legislation is marked to be effective August 13, 2010.

In the meantime, solar electricity continues to spin your meter backwards and reduce your electric bill to zero so there’s no reason to wait!

Contact us to keep updated as we discover more details about this exciting new program (which hopefully shall inspire neighboring states to follow suit).