Sunday November 22nd, 2009
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Paying for Solar Power
Posted by Philip Higgs on May 3, 2007 - 6:28am.
As you’ll recall, the other day I wrote about getting an assessment of our home’s solar-power potential. Which is to say, what kind of solar access do we have, and how much will it cost us to exploit that access? I haven’t heard back from our solar man yet; he promised we’d see an estimate by next week. In the meantime, my expansive and well-read audience will remember my qualms about going solar when you’ve got a house full of holes and time-torn appliances and other inefficient bugaboos. I stand by that. But there’s just a bit more to consider: The nationwide average for a total solar system install – panels, inverters, and labor – is about $7.50 per watt. Like I said, we use about 750 kilowatt-hours per month in electricity, which means we’d need a 6-kilowatt system to cover that 100 percent.
For that theoretically necessary 6-kilowatt system, that’s a massive chunk of cash: $45,000. (Or, for those of you keeping score at home, 3.6 new boilers.) That’s also money that could go a long way on other projects: upping our insulation, building gray-water gardens. Hell, I’ve got a 400-square-foot work studio in the backyard – currently home to an infestation of carpenter ants – that I could rebuild into a palace of all things green for half that. We could buy a Toyota Land Cruiser and make it into a frybrid for that kind of dough.
The reason I’m looking at going solar now – not quite doing it yet, but looking at it – is that solar power exists in a sort of false economy at the moment. That $45,000 system won’t really cost me $45,000 – not even close. For starters, the federal tax credit allowed by the 2005 Energy Policy Act effectively lops a couple grand right off the top. And here in Colorado, the local utility is required to hand over a $4.50-per-watt rebate thanks to the historic Amendment 37 us Coloradoans passed back in 2004. All of which brings us, without any effort at all, to a $16,000 system. Pretty handy.
Even better: In the works over in Washington D.C. is the Securing America’s Energy Independence Act – a.k.a. H.R. 550 in the House and S. 590 in the Senate – that will not only extend solar tax credits to 2016, but will up them to $3.00 per watt. And potentially
backdate those credits to January 2007. Meaning if we install a solar system now, we’ll get $4.50 per watt from our utility and $3.00 per watt from Uncle Sam. That brings our overall cost down to… well, down to nothing at all.
Sure, the world of theoreticals is fun and fluffy (and only maybe hopefully possibly likely), but my point is that right now is probably the best time in a long while to look into going solar, one where the normal economics don’t apply. So get y’all to a solar consultant, check your local rebates, and get estimating.
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By the way, while you’re linking around the Internet today, be sure to push for some Congressional action on the Securing America’s Energy Independence Act. Think of the cheap solar!
You must be amazing to take to the supermarket. Are you a coupon man as well?
Even with all the rebates, it seems that it is still an expensive propsition and one you really have to be committed to. I wonder if you can get that investment back if you sell your home in the near future.
All good points about going solar and deciding where to spend your limited amount of resources. Now there is the option for homeowners who would like to go solar but do not have the large upfront investment to do this.
There is great promise for an up and coming company that is offering solar PV systems to homeowners for Rent. Yes, that's right, you can rent a solar PV system for your home.
This is a great idea for those of us who are not going to put out the big chunk of change, even with the tax incentives, to install solar.
If you are like me, I want to go solar but that initial investment is what's keeping me from making it happen.
Now if you live in an area where your utility company offers net metering, you can sign up to rent a solar system and pay for it based on how much energy it produces. Your rental fee is based on your current utility companies rates.
This means that what you pay to rent the system is what you would have been paying for your utility bill. The systems will be designed to produce 100% of your energy needs. So now instead of paying your utility company, you will be paying to rent your solar system.
Over the long term, you will begin to save money as utility rates increase, your rental rate will remain the same as the day you signed your contract to get your system.
Pretty cool idea I think. If you want to read more about it, you can go to this link: http://www.affordsolarnow.com
I've already signed up for my system. Even though it may be awhile before they are available, I can't wait. Now someone like me who cannot come up with the initial big investment to go solar can have a solar PV system for my home.
It's gotta happen, we have to start doing more.
Regards,
Erin
Buying a solar system is just like making any other large purchase. Most people can’t afford do pay $10,000 or $20,000 up front for something; they finance it. Let me ask you (and Vicki R) something: When’s the last time you bought a car? How much did it cost? Did you pay for it in cash, or did you finance it? My guess is you probably financed it, meaning you pay for it over time, with interest. That's how most people make large purchases.
Next question: How much is that car worth now? Probably much less than you paid for it, considering the swift effects of depreciation. Another question: Is the car making you money? Is it saving you money? What are the “rewarding effects” of owning it?
Our car payments are about $300 a month. Once we’re done paying for it, we’ll still have a car, but one that still needs gas, still needs maintenance, and is still losing value over time. Solar power, on the other hand, pays for itself. It may take a while – 30 years – but that’s the key thing to understand. If we tie it into our mortgage, that $16,000 system would cost us $80 a month. Our electricity bill averages about $70 a month, so that’s a premium of $10, just in interest. But hardly an unmanageable amount to move ourselves toward energy independence.
By the way I also feel that most people think in the short term mainly because they can not afford to think in the long term (in specific times of their lives), but I am not in any way trying to discourage anyone to go solar, it is the best way, in fact. & I myself am in the process of going solar.
Thank you again for elaborating though, I do very much enjoy your blog and tips.
-lily
Ms. Vicki,
Point taken. But you also need electricity. You should check out the solar options where you live, and see if you can get an assessment for your house. The thing I'm getting so kooked up about is that you -- yes, you, the flowery Vicki R, not just the general you's out there -- could maybe possibly actually save money by going solar. This depends on what your e-bills are like now, what your solar access is, what kind of rebates you can get where you live, etc., but it would be worth it to check the details. It may end up that your curent e-bill is *more* than you would pay to finance a solar system. Or it may be even steven. Or it may be way too much more. But you should definitely look into it. The assessment should be free, except for your time, so there's little to lose.
And if you haven't yet already, go send a message to your Congressfolk that you want bigger rebates for going solar.
Phiggs!! You've written an excellent, but more importantly thought provoking piece. Environmental awareness is so much more than just making basic eco friendly choices. Economic benefits are stellar green choices as well. I'm stoked to see you stress the big picture. It's a jigsaw puzzle and you have shared some much needed pieces. Anyone reading you will have a more comprehensive understanding of the complete impact that solar power provides.
~ Greener today than I was yesterday!
If I decided to try and do this, how much work does it entail? Do they have to rip off my roof or do they attach the panels directly to it? I know that sounds like a crazy question, but I am a bit confused as to the process. I will speak to my husband and get his thoughts.
By the way, how was New York or did you not go yet? Can't remember.
Well, first you should have someone come and take a look at your roof. You can find solar installers in your area, along with customer reviews, here. It may end up that you don't have enough roof space, or your house isn't oriented right for solar, or whatever.
But let's say your place is perfectly aligned for solar panels. The amount of work from there depends on the condition of your roof. If it's old and needs replacing anyway -- well, then you'd probably want to replace your tiles or shingles or shakes or whatever it is you have covering your roof, and that alone might cross solar off your list for good. But if it's in decent shape -- some roof coverings last for decades and decades -- all they'll do is bolt a big rack to your roof and attach the panels to that rack. And that should be included in the totall installation costs -- that is, the solar installers should do it; you shouldn't need to call a roofer.
But any solar install company worth its salt should offer you a free assessment and estimate of your solar potential, and they should be able to clearly explain anything and everything you'd need to have done. But in general, no, it's not a huge deal -- not as easy as painting a wall, but nothing like tearing out a wall.
Let us know what you find out!
http://www.txspc.com/index.html
This ^ is an awesome company. Their website is loaded with tonnes of useful information for anyone interested in learning more.
Greener today than I was yesterday!