One of our clients, Steve Coram, wrote this great blog post! It is wonderful to hear from a homeowner's experience and real world application.
EV = Goodbye Gas
EV
Why did you buy an electric car? Or, why would you buy an EV? Is it the ultra-ECO Nissan LEAF? Or are you into the totally chic Tesla Model S? Whatever your reasons, there is no hiding the fact that there are some very real monetary motivations to going EV too!
One’s decision to ultimately buy an EV also means that there will be an investment. An investment of time is necessary to fully understand and realize the financial benefits of the purchase. Here’s the short version:
The U.S. federal government subsidizes EV sales by providing owners an income tax rebate on their overall tax burden during the year the EV was purchased. It’s an awesome fringe benefit, but the buyer should do some tax prep to be sure that the full $7500 rebate will come back at tax time. This federal incentive is a use-it-or-lose-it affair. Otherwise, leasing is an excellent option, wherein the $7500 tax benefit applies immediately at the point-of-sale with a resulting low, low lease rate for the new EV driver.
In Washington state, where my family lives, EV adoption is also incentivized by forgoing state sales tax on the purchase of any new electric vehicle. Again, though, one needs to research this perk as some plug-in vehicles qualify (Nissan LEAF), and others do not (Chevy Volt).
The longer that an EV driver can keep the car in service, substantial long-term financial advantages will be realized too. With little to no maintenance costs to keep the vehicle on the road, EV drivers can benefit from the fantastic financial return for money not spent on their car. Windshield washer fluid and a new in-cabin air filter once a year is about it.
Lastly, there is so much money not spent on “fuel.” At 15,000 miles driven a year, an average medium-sized ICE (internal combustion engine) car costs about $0.15 per mile in gas. As compared to a Nissan LEAF, for example, that costs less than $0.03 per mile in electricity.
Made in Washington, Itek Energy Solar Panels
PV
Last summer, after trading in our Mazda CX-9 for a second Nissan LEAF, I started researching incentivized energy options. The next bang-for-the-buck “going green” play was the installation of photovoltaics (PVs) on our roof. Our new PV system will actually be more financially beneficial than our EVs!
The easiest way to explain the cash benefits is to show it on a simplified graph:
The above graph represents after-tax incentives and rebates. This is important to clarify because the cash rebates and incentives are provided at different times in that first year of a PV system being installed. Also, these incentives are a mixture of federal, state (Washington), and local (Snohomish County PUD) programs. Others’ cash benefits may differ, depending on location.
For those living in Washington and receiving electric service through the Snohomish County PUD, this is the breakdown:
Year One: Approximately $12,000 Cash
Federal Tax Rebate: 30% tax rebate*
State Incentive: Solar production cash incentive of $0.54 per kWh generated**
Local Incentive: Snohomish County PUD cash incentive of $2500***
State Incentive: Solar production cash incentive of $0.54 per kWh generated**
Local Incentive: Snohomish County PUD cash incentive of $2500***
Years Two Through Six: Approximately $3,100 Cash Annually
State Incentive: Solar production cash incentive of $0.54 per kWh generated
Now to explain all of those asterisks!
*The federal tax rebate is used at tax time for 30% of the PV installation cost. In our case, the $21,050 project will allow for a a tax rebate of just over $6,300 on our 2014 federal income taxes. And unlike the EV federal tax credit, if one does not have the tax burden to get the full rebate amount, the 30% rebate can be stretched over multiple years so that the whole amount is realized.
**Washington state is incentivizing PV solar production. The base incentive rate is $0.15 per kWh produced. This is if the solar panels and inverter(s) are made outside of Washington state. If Made in Washington panels and inverter(s) are used on the PV project, the state will reward those who buy local with a $0.54 per kWh cash incentive.
Estimating what the annual solar production will be requires the use of a sophisticated program (Not my brain, silly people!). We can expect the first year solar production to total about 5,800 kWh as measured by AC net output with the System Advisor Model. Our state production incentive will be about $3,100 annually, but our first year payout will be a bit less due to the PV installation happening partway into the calendar year.
The Washington state production incentive is accrued annually as a cash incentive. However, the state production incentive program will expire on June 30, 2020. Thus, the state production incentive in year seven is half of the preceding years.
***Snohomish County PUD incentivizes its electricity costumers to install PV by providing a $2500 cash incentive. This is a $500 per kWh installed incentive, up to $2500 total. Since our PV system has a DC rating of 5.4 kW (solar production measured at the solar panels), we’ll get the full $2500.
We have a 10-year loan for the PV system, therefore will have a negative net cashflow (approx. -$2,500/year) for years 8-10. However, once the system is paid off, we’ll benefit from lower utility bills for as long as we live in the house. And when it comes time to sell our house, we’ll benefit from increased property value from the PV system.
There it is…Eee-Vee (EV), Pee-Vee (PV), and one of the true pleasures of EV ownership: becoming savvy about all of the financial opportunities for going green.
This post originally appeared on Steve’s EV Road Trip Blog. You can check it out by clicking here.
Source: http://insideevs.com/author/stevecoram/
