• Depending on the state and locale, increased
property taxes could result (usually not likely).
See the Resources section for a payback calculator. In
the end, I decided on a fixed cost lease agreement. Listed
below are the terms in my contract, but yours could vary
widely depending on the many variables mentioned
1. I will pay a fixed $85/month for 20 years based on
the system design (maximum rated power of 9,880 watts).
This is regardless of the power produced each month.
A. Many leases include an escalation charge of 1-
7%/yr. I agreed to a slightly higher
monthly payment for a fixed
payment for 20 years.
2. All maintenance and
warranty costs for the system are
the responsibility of the company.
3. No deposit or upfront costs.
4. Performance is guaranteed at
approximately 10,000 KWH/year. If
less is produced, I will get a check
for the difference at the end of
each year (less a slight degradation
factor for the solar panels over
5. All credits and incentives go
to the company.
6. The system is insured by the
company, except for a baseball
hitting the panels. (Whose idea was
7. No property tax assessment
(in MA); even if the law changes, I
don’t own the system.
8. The system has an option to
purchase after five years based on a sliding scale.
9. Selling of the home: System must be paid off or the
contract must be transferred to new owners.
These are the basics of the contract. In any event, it
must be read thoroughly. I have included a list of
questions to ask here. Don’t be shy about this. If
something is not clear, ask the question.
Engineering the Sun
Next, a site visit was planned to look at roof pitch,
structural soundness, and composition (asphalt shingles).
August 2016 39
Solar Tax Credits
There is currently a 30% tax credit for solar installations.
This is a credit (not a deduction) and reduces your tax
liability by the amount of the credit and can carry over to
subsequent years. It is set to expire on December 31, 2016
unless it is extended by Congress. There is also a gradual
step-down of the credit per the following table:
• 30% for systems placed in service by 12/31/2019
• 26% for systems placed in service after 12/31/2019 and
• 22% for systems placed in service after 12/31/2020 and
• There is no maximum credit for systems placed in
service after 2008.
Systems must be placed in service on or after January 1,
2006, and on or before December 31, 2021.
The home served by the system does not have to be the
taxpayer’s principal residence.
State (varies by state)
For State of MA:
• $1,000 state tax credit
• Every homeowner that purchases a solar electric system
qualifies for a $1,000 state tax credit to use as a write-off
against what is owed.
Solar Renewable Energy Credit (SREC) Program
SRECs are certificates earned by producing clean
renewable energy. The homeowner can earn an estimated
average of $150-$270 currently for every $1,000 KWH
generated. However, SRECs are bought and sold on the
open market, and their value can go up or down as a
result of supply and demand. See
of the array.