And now for something completely different.
So, last year I went to a Green Energy conference hosted by a local utility, PSE&G. While there, PSE&G and a number of other booth people pitched putting up a grid-tied solar energy system. This kind of thing consists of:
- Enough solar panels to cover the roof.
- Some medium sized boxes bolted to the inside wall of the garage. These convert DC from the panels to 220 VAC.
- Four new breaker panels with Frankenstein's Monster switches on the side, three inside, one outside.
- A new electric meter.
When the Sun Does Not Shine, the Meter Runs Forwards normally.
When the Sun Shineth, the Meter Runs Backwards. Lots. Fast.
The way this thing is rigged is that if the panels are generating less power than the house is using, the meter runs forwards. When the panels are generating more power than the house is using the meter runs backwards. The output of the boxes is tied to the AC power right behind the meter, hence the name "Grid Tied".
The financial incentives were insane. The base cost of the system we eventually installed was $72K. The State threw in a $16K rebate, gratis, that went straight to the installer. On top of that, this thing counts as a solar energy system for Federal purposes. In 2009, when it went in,
30% of the remainder left after the state rebate could be used as a Federal Tax Credit, some 19.8K in this case. (In 2009 the government removed the $1500 cap on this kind of thing; it's back, now.) Net cost after rebates and tax credit: Around $46K.So, the electric bill has been zero for a while now. So that's a couple grand a year and, given the vagaries of the weather, a check from PSE&G is going to show up in a few weeks since we've generated a couple megawatt-hours more than we've used. (Yeah, the new meter keeps track of that kind of thing.)
So, at $2K a year in savings, assuming nothing goes wrong (ha!), that's around 23 years to get back the investment. But there's more..
Turns out that New Jersey and a number of other states in these parts require the utility companies to have a certain percentage of generation that's "green" and either non-polluting or low polluting. For every megawatt-hour of required clean energy the utilities don't make, they pay a fine. This state-set fine varies over time. In New Jersey, at the moment, the fine is around $720 or so. However, the utilities can zero out the fine on each megawatt if they can give the state a Solar Renewable Energy Credit (SREC) certificate. The utilities can make these by, say, putting up solar panels and connecting them to the grid; for each megawatt-hour of energy their panels make, they get a certificate and don't have to pay a fine.
Now comes the fun. If anybody has a solar energy system and has it connected to the grid, and the installation passes state requirements and inspectino, they, too, get an SREC for every megawatt-hour of energy thus generated. Note: This isn't excess energy or anything. It's energy generated, period.
There's a market for the SRECs. The eventual buyers are the utilities. They don't want to pay much.. But there's that fine hanging around. There are aggregators who buy up onesie-twosies of these things, then sell a large bunch to the utilities. Then there's all sorts of businesses and individual homeowners who've put these systems on the roofs of their warehouses and homes. There's web sites where these things are created, bought, sold, and retired. (GATS covers NJ and a bunch of other states.)
Sold my first four yesterday for more than I asked in the mid $600's; at this rate, I'll have payback in 5 1/2 years or less!
There doesn't seem to be any definitive answer on whether the money generated by selling an SREC is taxable or not. The IRS doesn't seem to have a clue, seriously. So there may be a ruling in the future that might require some payment of back taxes.. Or not.
So, here comes the Quicken questions.
This is kinda like having a spring on one's property where people show up with gallon jugs and you charge them a buck a gallon. Selling SRECs is income, all right, but I'm not actually paying for anything like I would, say, if I went out and bought and sold a stock. The certificates have numbers; if one actually doesn't want to sell one's certificates, one can ask for them to be sent (!), at which point they could be used to paper the wall.
I'd like to track the certificates in Quicken, especially if the Feds come calling in a few years. But how?
Finally, it's one thing to be playing around with these blame SRECs, but at some point the local utility is going to settle with me for the excess electricity I've been generating. Everything I've managed to dig out so far seems to indicate that this >is< taxable income, just like if I had a Nuclear Power Plant in the back yard. (Which, in a bizarre kind of way, I do, in the sense that the Sun is such a beast, and is the source of the energy...). So, how does one handle this?
Any thoughts on the subject would be greatly appreciated.
K. Becker