Is Home Solar Power Realistic?

Is home solar power a realistic and affordable option in the US?

Photo voltaic cells, which turn light directly into electricity, are now readily available in the USA. You can buy solar panels and install them yourself, or have a professional installer do this for you at a cost. These will generate some electricity during the hours of daylight, even when it's cloudy. The problem is the cost of the panels, and the additional cost of installation if you don't fancy climbing up on your roof to install them yourself. Typical installation costs run to $10,000 for a 2.5KWp system. More if you have them installed by a contractor. The most this will save you is $300 to $500 a year depending on the price of electricity from your utility company and your climate. This gives you a payback period of 20 years assuming no maintenance is required during the first 20 years. If you live in an area with cloud cover for several months of the year then these figures are ever worse.

So on the face of it, solar power doesn't make sense economically. There are plenty of environmental reasons to consider it but I'll cover those in another article. There are, however, two little known factors that will completely turn this around.

1. State Rebates.

If you are lucky enough to live in certain states, either your state government of your local utility company will rebate a part of the cost of a home solar power installation. Several states are giving cash rebates of up to 80% of the cost. Others will give you a low-interest loan. Due to state and federal requirement for power companies to source more green energy, they are also willing to buy back electricity generated from your solar panels. Your electricity meter runs backwards to measure this. Some householders with large installations, or low power consumption, even receive a monthly check from their utility company instead of a bill!

You can find details of the rebates for your state at DSIRE This is a national database of incentives for renewable energy and efficiency and is free to use.

2. Tax Credits

In 2005 congress introduced a tax credit for renewable and energy conservation in residential buildings. Unfortunately this was capped at $2,000. In 2008 congress extended the tax credit on residential solar power installations for a further eight years and also removed the previous $2,000 cap. Most states are also matching the federal credit, so if you are dipping into your own wallet for solar panels this could make a big difference to your tax bill next April. As with all tax matters the situation may be affected by your personal circumstances so be sure to consult a tax professional before making any commitment.

Given the factors for rebates and tax credits you may find that installing solar power is the best financial decision you ever made. You can get more information on rebates and links for the DSIRE database from Home Solar Power at 4solarpower.net.