Solar Finally Pays Off
It's cheaper to install a system -- and you can even sell back to the grid.
By Bob Frick, Senior Editor
From Kiplinger's Personal Finance magazine, October 2007
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But not everyone wants unobtrusive panels. Tony Clifford, president of Maryland-based Standard Solar, says that although most of his clients prefer sleek and subtle panels laid flat on a roof, some don't mind making a statement with circle-laden panels propped up to catch the sun at the perfect angle. "Beauty is in the eye of the beholder," he says.
Future benefits
Aside from saving on his utility bill and banking good environmental karma, D.C. resident Dan Mullin says he enjoys another benefit of his PV system: insurance against rising energy prices. That's a big incentive driving PV sales, say installers. And keeping a lid on rising energy costs is also a major motivator for states to subsidize commercial, retail and home PV systems.
Count on more states to start or increase subsidy programs. By fostering home solar systems, states decentralize power production. That reduces the cost of expensive grids needed to transport power. Also, clean, renewable power saves environmental costs by limiting fossil-fuel use.
Solar-power experts are quick to point out that traditional power is subsidized, too. Of the $12 billion the federal government spent on energy subsidies last year, $10 billion went to traditional energy sources. Says Joe Schwartz, executive editor of Home Power magazine: "We don't live in a free market. Sure, incentives drive the market, but incentives for renewable energy are simply evening out the market."
As the price of generating conventional power has risen, the costs associated with solar power have fallen dramatically. Solar panels now cost 80% less than they did in the early 1980s, and system prices may drop 5% per year for at least the next few years. The crossover point -- when falling PV-system prices pass rising energy prices so that solar pays off without subsidies -- is less than a decade away, say experts.
For now, though, cutting the up-front investment is the challenge. Maryland, which imports 25% of its power from other states, recently passed a law requiring utilities to buy solar power from private suppliers. Malcolm Woolf, director of the Maryland Energy Administration, foresees an energy-credits market evolving in which utilities enter multiyear contracts with suppliers -- even homeowners.
Of course, solar power isn't all about economics. Standard Solar's Clifford points to some clients in the rolling hills of Virginia's hunt country. Virginia has no state incentives, but these families have invested in expensive solar-power systems anyway. "It's like buying a Toyota Prius," says Clifford. "There's a certain set of the population who will pay a substantial sum to do the right thing."
Small scale solar
Not quite ready to add solar panels to your roof but still want to catch some rays? You have other alternatives to make the sun pay you.
Solar water-heating systems. Dark-panel collector boxes, from 40 to 80 square feet, trap solar heat and preheat cold water. The heated water then flows either to your existing hot-water tank or to a special tank. Such a system in cloudy Seattle will provide less than 50% of the energy needed to heat hot water for a typical household. But in sunny Phoenix, the yield is 80%. System prices range from $2,000 to $8,000. Figure a six- to ten-year payback period on a $4,000 system. (The federal government will pick up 30% of the bill, up to $2,000.)
Solar-powered attic fans. Lowering your attic's temperature on a hot summer day can dramatically reduce the load on your air conditioner. A solar-powered fan costs about $500 installed and can pay for itself in as few as two to three summers.
Solar tool kit
There's an abundance of resources to help you add solar power to your home. Here's what you need to get started.
A simple, soup-to-nuts primer on PV systems: www.nrel.gov
The money your state provides to help cover system costs, plus other payments and incentives: www.dsireusa.org
Get federal tax credits of up to $2,000 for installing a qualified PV energy system or solar water heater this year or next: www.energytaxincentives.org
A calculator to figure out your costs and savings from a PV system: www.clean-power.com/