12 | 01 | 23
Solar Is a Good Investment in Massachusetts
by Solar Design Specialist Kel Monroe
The enormous push for renewable power and lower carbon footprints has encouraged many Massachusetts homeowners to consider solar panels on their roofs or in their backyards. We Bay Staters have a sense that we’re leading the charge, thanks to a mix of federal, state, municipal, and utility-based solar incentives. While it’s all very exciting, savvy observers can’t help but notice that it can be a long slog to that joyful moment when the system has fully paid for itself after such a large investment.
There are factors that Massachusetts residents need to consider when calculating their solar payback period, which can often take longer than their solar neighbors in New Hampshire and Maine. Why are payback periods longer for some and, in the end, is it still worth it to go solar?
To be clear, we’re talking about ownership options, when systems are purchased outright in cash or via financing and solar loan options. This brings us to the first obstacle affecting solar payback periods: higher interest rates. With interest rates still relatively high at the end of 2023, many residents are tempted to wait until things cool down before taking the plunge on a higher interest rate loan product.
But let’s say you’re paying in cash or have unlocked a favorable Home Equity Line of Credit (HELOC). Despite the numerous and long-lasting benefits of harnessing photons from our bountiful sun, people still find themselves facing longer payback periods compared to folks in other regions. There are several additional factors contributing to extended paybacks that shed light on why going solar in Massachusetts is a bit more challenging.
Costs from Massachusetts Labor Regulations
One significant hurdle homeowners face is the higher cost associated with installations. This is primarily due to the state’s stringent regulations which mandate a specific labor ratio on every solar installation project.
Massachusetts requires licensed electricians to be present on every job site, and every other laborer must be a journeyperson (a worker formally in the process of gaining their electrician’s license). These ratios of fully licensed electricians to journeypersons result in higher labor costs that contribute to an overall increase in the installation expenses, some of which is included in a customer’s cost.
The main consequence here is that the upfront investment required for solar construction work can be higher compared to many other states with less stringent regulations. Solar Champions in Massachusetts might have to accept slightly lengthier payback periods, meaning they may need to wait longer to recoup their initial investment through energy savings combined with federal and state incentives. While the long-term benefits of solar energy remain promising, this extra financial barrier can be a deterrent for some.
Municipal Light Plants (Town-Owned Utilities)
Another factor is the presence of municipalities with their own power companies, also referred to as Municipal Light Plants or MLPs. Each MLP has its own unique net metering policies. Net metering allows solar panel owners to sell excess energy back to the grid, offsetting their electricity costs.
Unfortunately, some municipalities in Massachusetts have less favorable net metering policies, meaning homeowners may not receive as much credit for the excess energy they contribute to the grid, thereby lengthening the payback period.
Despite these challenges, there’s a silver lining for Massachusetts residents considering solar. The key lies in making informed choices, both in terms of the installer and understanding the local policies. Homeowners should prioritize choosing companies with high ethics and a stellar reputation. Reputable installers with many years of experience will have strategies to navigate labor costs efficiently and ensure the installation process adheres to local regulations without inflating expenses unnecessarily.
Finding the Right Solar Partner is Key
It’s important to remember that even with a longer payback period, the financial benefits of solar remain substantial once you hit that sweet, sweet breakeven point. Homeowners should consider the potential energy savings, generous federal and state tax incentives, and the positive environmental impact when evaluating the viability of a potential solar installation. Even if you plan to move in a few years, the home value increase can be significant enough to allow a recoup of your investment when you sell.
The road to solar energy in Massachusetts may be paved with challenges, but it’s a journey you can approach with optimism. By partnering with the right installer who provides honest projections and genuinely comprehends the local landscape, residents can reap the rewards of solar-powered living while making a sound financial investment.
ReVision Energy, who recently joined forces with Massachusetts solar company Sunbug, has worked with customers all over the Bay State to design systems that meet their budget and energy goals. We’ve seen it all and are great at navigating all the complicated intricacies that can challenge a solar project. We know going solar in Massachusetts might not always be easy, but it’s always worth it.
