WESTFIELD, NJ – Amit Srivastav has high hopes for his new residential solar panels.
The panels, which were officially turned on Feb. 1, were installed on his home on Floral Court by SolarCity. Seeking long-term savings on his electricity bills, Srivastav was also encouraged by an incentive program through his employer, Bank of America Merrill Lynch.
Interest in solar panels is growing among New Jersey homeowners. According to Solar Energy Industries Association, there were 5,648 residential solar photovoltaic installations in the state in 2014 (through Q3), up from 4,584 in in all of 2013.
According to the Solar Energy Industries Association (SEIA) website, 236 MW of solar capacity was installed in the Garden State, ranking it fifth nationally for installation. Fueled by good incentives, the 1,369 MW of solar energy currently installed ranks it 3rd in the nation in installed solar capacity. This is enough energy to power 215,000 homes.
Like many solar customers, Srivastav and his wife, the parents of two young children, chose a 20-year lease to finance the cost of the panels.
“We have locked in a fixed rate cost for the energy,” he said.
Srivastav’s new solar panel system also provides net metering, a billing mechanism that credits solar energy users for the surplus energy they generate and add back to the grid, according to the Solar Energy Industries Association.
If a home is net-metered, the electricity meter “will backwards to provide a credit against what electricity is consumed at night or other periods where the home’s electricity use exceeds the system’s output,” the association explains on its website.
While the use of solar panels in New Jersey is not as widespread as it is in California, where it is most popular, more and more Westfield homeowners are curious about the promise of renewable energy as well as monthly savings.
Samantha Altieri is considering installing solar panels on a home on Dudley Avenue that she is in the process of buying.
Altieri, who currently lives on Orenda Circle, would like to use the panels to heat the backyard pool at her new home so she and her family could use it longer.
“We would extend it at least two, or even three, months,” she said.
Ideally, the panels would allow the Altieri family to use their pool from May through October.
Heating a pool otherwise is a “tremendous expense,” said Altieri.
Solar panels attract both the environmentally conscious and the budget conscious, said Erik Linden, a spokesperson for NRG Home Solar, which is owned by NRG Energy. NRG serves customers in New York, New Jersey, Pennsylvania, Connecticut, Massachusetts and California.
“One of the most interesting things about residential solar is that the rate of satisfaction is just incredibly high,” Linden said, adding that average monthly savings with solar is about 20 percent.
Numerous factors go into the number used and the cost of the panels, such as the number of shade trees surrounding a house, the angle of its roof and the direction the house faces. According to Linden, the panels work best in sunny, cool weather.
Most NRG customers use a 20-year lease option to obtain the panels, he said. This offer includes no-money down at the time of installation plus an energy rate lock. The lease payments therefore remain flat over time.
“It’s an unknown what electricity rates will do over time,” said Linden. “What we’re seeing is it adds attractive value to the home.”
William Hanley, a broker associate and manager at Prominent Properties Sotheby’s International Realty in Westfield, says that’s not necessarily true across the board.
The panels may affect a home’s curb appeal to some potential buyers.
“Some people don’t like it. They like the idea of it,” Hanley said. (Westfield's town council is now considering adding an ordinance that would place aesthetic constraints on the placement of solar panels.)
“You will see a few homes that have solar panels, but not a lot,” Hanley said. “It’s not necessarily something that’s going to bring you more money.”
Robert Berg, a Scotch Plains real estate attorney, said that there are “pitfalls” to watch for when a home with solar panels changes hands. He advises realtors and homebuyers to make sure that a lease agreement for solar panels is disclosed up front and that it is read and understood.
“It’s just that with solar panels, these contracts are so long that most people don’t take the time to read them,” he said.
“Some of these companies also make you sign a transfer agreement,” Berg added.
Hanley echoed this sentiment.
“It’s not even a sure thing that the next buyer is qualified for it,” he said.
At NRG, this situation is handled in one of two ways, Linden said. The new buyer can go through the same qualification process as the original owner or the seller of the home pays off the remaining lease payments and adds the total cost into the sale price of the home.
Still, Srivastav plans to stay in his home for the long run and he anticipates a good savings from the new panels.
“We haven’t seen the bill yet,” he said.