The payback period for solar is a function of electricity prices and project costs. Project costs are generally within a 10-15% range depending on labor rates in different states, but electricity costs are the big variable that really drive the viability of a successful project.
For example here are some commercial and industrial kWh pricing in a few of the key states that Solar CFO uses to underwrite our projects:
- Hawaii has some of the highest electricity prices in the country at about $0.30 per kWh.
- California also has very high rates: SDGE approx $0.21 per kWh, PGE approx $0.18 per kWh, and SCE approx $0.14 per kWh. There is also a great program within the LADWP territory which allows owners to max out their rooftops with solar and sell into the grid for $0.135 to $0.145 per kWh.
- Massachusetts has a state program that buys electricity for approximately $0.16 to $0.24 per kWh for 20 years (based upon a sliding scale and your region), plus another $0.05 if you add batteries.
- New Jersey is gearing up to launch Pilot 2 of their community solar program which pays $0.152 per kWh for 15 years.
- Illinois, Pennsylvania, and New York also have pending legislation which will increase the viability for solar projects in those states.