Is it cost effective to go solar?

Solar is all about the green, and I’m not referring to that warm fuzzy earth day feeling either. I’m talking about the universal green – money. If solar didn’t make financial sense, no-one would invest into it. We’ve all read about rising energy costs, government solar subsidies, and cheaper solar technology. We’re all in agreement that solar power is clean, efficient, and the right thing to do. But, we’ve also heard that solar isn’t cheap. At least – not as affordable as our electric bill. But, that’s no longer the case. With bigger and bigger electric bills, we’re now having to consider alternatives.

On average, electric bills have increased over 7% each year during the last 20 years. Solar Panels have also come a long way during those twenty years as people search for alternative energy sources.

There are several factors that now play a part in determining the value a solar system has for a home or business. First, you must consider the size solar system that you would need. Just like you need a bigger garage door in your home to handle more cars, the larger your electric bill, the larger the solar system you will need. But, it doesn’t stop there. While that determines the size in kilowatt hours that would you need, it’s not the only factor that determines what the cost will be.

Solar prices have dropped recently for several reasons. First, the prices for the components have come down, and that’s a good thing. Second, there are tax credits and local incentives available that will help you pay for the cost of a system. There is currently a 30% federal tax credit good through the year 2016 that you can claim when you purchase a system. Of course, you need to have a tax liability in that amount or greater to claim it, but most people don’t have a problem meeting that. Other incentives are usually found with the local utility companies. Last year, in Nevada, NV Energy offered unusually large rebates for non-profit organizations and when combined with the federal tax credit – it didn’t cost the organization a penny – it was FREE. For homeowners the utility rebate for solar was quite a bit less. The rebate would cover about 25% of the cost for a solar installation. But, again, when combined with the federal tax credit, about 55% the cost of a system was paid for.

Now, as much as I would love to say that all these rebates are still available, most aren’t. Throughout California and Nevada the rebates were exhausted, quite literally, within hours of opening the application process online. But, don’t worry, there’s good news. Most utilities are gearing up for another round of rebates. When you factor that 55% the cost of solar can be paid for through these incentives, and you factor in the $1500-$2000 a year in electric savings you have, you can see very clearly how solar quickly pays for itself.

Chris Keenan is a green and general blog writer. He writes for many sites including his personal food blog.
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