Solar panels are becoming more popular by the day. This is true for various reasons. In the last five years, the cost of an average installation has decreased by as much as 20%. On the other hand, energy prices are constantly rising. Electricity prices are estimated to continue rising by as much as 3% annually.
Higher electricity costs combined with lower solar installation costs are making these systems more viable. Moreover, solar power is of course clean and green. With the state our world is in, using clean energy is now more important than ever.
That said, what everybody wants to know is whether or not solar panels are worth it. Yes, solar panels are great long term investments. Generally speaking, they always end up paying for themselves. The question is just how long it will take for you to break even on your investment.
Today, how long it will take for you to break even is what we are here to figure out. This is specifically the case for people who live in Brooklyn NY. Right now, we want to determine how long it will take for solar panels to pay for themselves in Brooklyn.
There are a few steps that we need to go through to figure this out. Let’s first determine how much electricity you use and how much it costs you, then go from there.
Brooklyn New York Average Residential Energy Consumption & Costs
We have done our best here to find accurate numbers for the Brooklyn area of New York. With that being said, information is a bit scarce for such a specific area of this city.
That said, we do need to determine how much electricity a resident of Brooklyn uses. We also need to know how much this costs. This is an essential component to determining the payback period for solar panels.
First, residents of Brooklyn NY do pay a whole lot for their electricity. The average cost for electricity in Brooklyn NY is 20.59 cents per kWh used.
To put this in perspective, this is much higher than the national average. The national average in the USA is 11.88 cents per kWh. As you can see, electricity in Brooklyn NY is actually very expensive.
With that being said, residents of Brooklyn NY don’t use all that much electricity. People in Brooklyn NY use an average of 512 kilowatt hours of electricity per month. This is much lower than the national average. The average household throughout the USA uses just under 900 kilowatt hours of electricity per month.
The result here is that the average monthly electric bill in Brooklyn NY is fairly on par with the rest of the country. In the USA, the average monthly electricity bill is somewhere around $107. In Brooklyn NY, an average household pays roughly $105 for their electricity per month.
This means that an average household in Brooklyn NY pays roughly $1,260 per year for their electricity. The next step is to determine how much solar panels in Brooklyn NY cost.
Average Cost of Solar Panels in Brooklyn New York
For some perspective, the average cost of a solar panel installation is $3 per Watt in the USA. Now, residents of Brooklyn NY do pay a little more. The average cost of a solar panel installation in Brooklyn is $3.13 per watt. This is of course quite expensive, well above the national average.
Something to keep in mind here is that bulk pricing usually applies with solar panels. This means that the larger the system you install, the more money you will save on a per watt basis.
Yes, a 10kW solar system will cost you much more than a 5kW solar system. However, due to bulk pricing, on a per watt basis, larger the system, the cheaper it is. Let’s take a look at the average cost of solar panels in Brooklyn NY per Watt.
- 4kW – $3.43 per watt – $13,720
- 5kW – $3.28 per watt – $16,400
- 6kW – $3.13 per watt – $18,780
- 7kW – $3.10 per watt – $21,700
- 8kW – $3.16 per watt – $25,280
- 9kW – $3.03 per watt – $27,270
- 10kW – $3.00 per watt – $30,000
The Federal Investment Tax Credit
Those figures above may seem quite high, but there is good news. There is the Federal Investment Tax Credit or Federal Solar Rebate Program. At is time, this provides you with a 26% rebate on at the upfront cost.
This means that you save 74% of the initial cost. Keep in mind that this solar rebate is at 26% until the end of 2022. Then, in 2023, it will drop to 22%. After 2023 is over, as of yet, there is no plan to continue this rebate. So, what do solar panel installation costs look like after this rebate has been applied?
- 4kW – $10,152.80
- 5kW – $12,136
- 6kW – $13,897.20
- 7kW – $16,058
- 8kW – $18,707.20
- 9kW – $20,179.80
- 10kW – $22,200
The NY State Solar Energy System Equipment Tax Credit
The state of New York then also has a solar energy system equipment tax credit in place. This provides you with a 25% solar tax credit for solar systems purchased in the state of New York. This allows for a maximum deduction of $5,000. So, what do solar panel costs in Brooklyn look like after this has been applied?
- 4kW – $6,722.80
- 5kW – $8,036
- 6kW – $9,202.20
- 7kW – $11,058
- 8kW – $13,707.20
- 9kW – $15,179.80
- 10kW – $17,200
The NY-Sun Megawatt (MW) Block Program
There is even more good news for New Yorkers. Eligible homeowners can receive up to $1000 off for every kilowatt of solar power installed. This will of course greatly reduce the price even further. Let’s take a look at the final cost of solar panel installations in Brooklyn NY after all incentives and rebates have been applied.
- 4kW – $2,722.80
- 5kW – $3,036
- 6kW – $3,202.20
- 7kW – $4,058
- 8kW – $5,707.20
- 9kW – $6,179.80
- 10kW – $7,200
The average installation size is 5kW, so this is the figure we will be working with. An average 5kW solar system in Brooklyn should cost roughly $3,036 (after rebates and incentives).
How Much Electricity do Solar Panels in Brooklyn Produce?
Your average 5kW solar system will produce 20 kilowatt hours of electricity per day. This equals roughly 600 kilowatt hours of electricity per month. However, this is based on the peak sunlight hours. These calculations assume that solar panels get four hours of peak sunlight per day.
New York actually gets slightly less peak sunlight hours. On average, you can expect to get around 3.79 hours of peak sunlight across the state of New York. This does of course need to be factored into the overall equation.
This means that a 5kW system in Brooklyn would produce roughly 18.95 kilowatt hours per day. This equates to 568.5 kilowatt hours per month. As you can see, based on average electricity usage in Brooklyn, a 5kW system would fully meet your needs.
The Solar Panel Payback Period in Brooklyn New York
The main goal here is of course to figure out how long those solar panels will take to pay for themselves. We have now gathered all of the required information to perform this calculation. There are a few important figures that you need to be aware of here.
- People in Brooklyn NY use an average of 512 kilowatt hours of electricity per month.
- The average monthly electricity bill in Brooklyn is $105, or $1,260 annually.
- A standard 5kW solar system in Brooklyn will cost roughly $3,202.20 to install (assuming that you are eligible for all rebates).
- That 5kW solar system will produce roughly 568.5 kilowatt hours of electricity per month.
We can now plug in all of these figures into the equation to determine the payback period for solar panels. As you can see, a 5kW solar system will it fully meet your electricity usage needs. This, therefore, means that you will save 100% of your monthly and annual energy costs.
This means that you will save $1260 annually. Based on the initial cost of the solar system, the payback period is 2.54 years. This is indeed one of the fastest or shortest payback periods in all of the USA.
The main reason for this is of course because the state of New York has such awesome solar incentives and rebates.
What is also worth mentioning is that in New York, you won’t pay any sales taxes on your new installation. Moreover, your property taxes also won’t go up due to the value increase created by the solar system.
Feasibility of Solar Systems in Brooklyn, New York
As you can see, solar power in Brooklyn NY is more than worth it. All of those federal and state rebates and incentives greatly reduce the overall cost of the initial installation. What it all comes down to is that it won’t even take three years for your investment to pay for itself.