Connecticut, New York and Massachusetts now outrank California, Arizona and New Mexico in the amount of money each ray of sunlight can generate for homeowners, according to the Geostellar Solar Index, a new scientific and economic analysis of Americans’ savings through rooftop solar.
The new quarterly index, released today by Geostellar, shows the Northeast and Mid-Atlantic states offer the highest Internal Rate of Return on residential solar energy, an economic analysis that measures and compares the profitability of investments, with profits as high as 24 percent per year over the 25-year life of the solar array. By comparison, the S&P 500 has shown an 9.9 percent Compounded Annual Growth Rate over the last 50 years, 30-year U.S. Treasuries have a current yield of 3.7 percent, and five-year certificates of deposit (CDs) typically return just 0.75 percent annually.
Surprisingly, California, Arizona and New Jersey, 2012′s top three solar states by installed capacity, are not among the top five states in the index. Tax credits and other incentives in New York and Connecticut have helped propel those states toward the top of the Geostellar Solar Index, which is calculated using sophisticated economics, energy and environmental factors to rank all 50 states and the District of Columbia, and more than 3,000 counties nationwide, in order of profitability for residential solar installments.
Conversely, only Mississippi residents would pay more for solar energy than they would for the conventional electricity provided by the power grid, according to the index.
The index criteria includes a detailed analysis of individual rooftops and their solar intensity, county-by-county tax credits, rebates, renewable energy credits and other incentives, local utility rates, installed costs of solar, and other variables.
“In much of the country, the Geostellar Solar Index shows that homeowners can actually generate more wealth with solar panels than stocks, bonds, CDs or other investments,” said David Levine, founder and CEO of Geostellar, the nation’s first and largest online solar energy marketplace. “The index’s findings show residential solar power is not only viable, it’s a wise investment.”
The factors that determine the profitability of solar energy at a particular location include the cost to generate solar electricity — a function of the intensity of sunlight, the efficiency of the solar array, and its installed cost — and the available incentives and local rates for conventional electricity.
To raise awareness and encourage homeowners to discover the benefits of solar energy, Geostellar is teaming up with Earth911, a digital publisher that empowers its readers to live low-waste lifestyles. Geostellar will leverage Earth911′s expansive site traffic and social media presence to reach homeowners through a series of native posts on Earth911.com.
“We’ve never seen a database like the one that Geostellar has constructed,” said Raquel Fagan, vice president of Earth911 Media. “Geostellar’s scientific analysis will be an interesting springboard for stories that delve into the possibilities for solar to provide economic and environmental benefits. We’re interested in gauging consumers’ reactions and encouraging genuine, open discussions on the topic.”
One of the key insights the Geostellar Solar Index provides is the fact that local, state and federal tax credits and other incentives are the largest factors in determining the individual profitability of solar for the homeowner. Because incentives change rapidly, the profitability of solar energy across the country can fluctuate, Levine said.
According to the Geostellar Solar Index, which will be revised and released quarterly, here are the annual yield rankings of all 50 states and the District of Columbia, averaged over the 25-year life of a solar array:
1. Hawaii 24%
2. Washington D.C.20%
3. New York 17%
4. Connecticut 16%
5. Colorado 15%
6. Massachusetts 15%
7. New Mexico 13%
8. California 12%
9. South Carolina 12%
10. Delaware 12%
11. New Jersey 11%
12. Iowa 11%
13. Minnesota 10%
14. Louisiana 9.4%
15. North Carolina9.2%
16. Florida 9.2%
17. Maryland 6.8%
18. Wisconsin 6.6%
19. New Hampshire 6.0%
20. Michigan 5.9%
21. Missouri 5.7%
22. Arizona 5.6%
23. Vermont 5.1%
24. Texas 4.8%
25. Kentucky 4.7%
26. Rhode Island 4.5%
27. Nevada 4.4%
28. Montana 4.4%
29. Alabama 4.3%
30. Maine 4.0%
31. Kansas 3.9%
32. Tennessee 3.9%
33. Virginia 3.7%
34. Wyoming 3.6%
35. Pennsylvania 3.0%
36. Oregon 2.8%
37. Ohio 2.5%
38. Illinois 2.2%
39. Georgia 1.8%
40. West Virginia 1.7%
41. Utah 1.6%
42. Alaska 1.5%
43. Washington 1.3%
44. Oklahoma 0.3%
45. Nebraska 0.3%
46. South Dakota 0%
47. Idaho 0%
48. Arkansas 0%
49. Indiana 0%
50. North Dakota 0%
“Residents of the top states in the index can see their investment would be completely paid back in four to six years, and then receive free energy worth another five times’ that amount,” said Mark Wirt, Geostellar’s senior analyst. “The wide spread between solar and conventional electricity in some markets has created broader opportunities for third-party financing and zero-money down offers, where institutions become co-investors with the homeowner, providing upfront money and participating in the yields.”
“We’re watching closely the movement of the national, regional and local solar markets, including the latest information on costs, incentives and rates in our analysis of individual homes, which also accounts for roof shading, slope and orientation,” he added.
Last year, more than 82,000 homeowners across the country installed solar panels on their homes, according to the Solar Energy Industry Association, which said it was a record year. The SEIA also is projecting 2013 as another record year for residential solar deployments.
To help homeowners get the best deal on solar, Geostellar provides an instant, free and independent assessment of the benefits of solar energy for each individual home, based on a scientific analysis of each home’s rooftop sunlight intensity, incentives and conventional electricity costs. Geostellar is a transparent online marketplace where homeowners compare installation and financing options.
— Solar Builder magazine
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