Reply #18: Here's the info on solar power [View All]

This is an excerpt from a piece on energy-saving measures that I wrote for Living in Style Magazine last year:

SOLAR POWER: YOUR HOTTEST PROSPECT

Imagine paying just $5 a month for electricity. Sounds impossible?

Hundreds of thousands of American homeowners are doing just that, after installing residential solar systems to generate their own electricity.

With a solar electric system, your home produces electricity on sunny days and sends any excess electricity back into the power grid. You get credits from your utility company for every kilowatt hour (kWh) produced. On cloudy days and at night, you draw electricity from the grid, using your credits. If your produce as much electricity as you use in a year, you pay only the minimum charge for having a meter (about $5 a month in most areas).

Options include solar panels, photovoltaics (PV), or the newest option: solar roofing tiles, such as those made by Sunslate.

“The beauty of this whole roof integrated product is that it looks terrific…I had a project where the building inspector came out,” recalls Rich Castillo at Old Country Roofing in San Jose, a company that installs solar roofing tiles throughout California and neighboring states. “He called and said, `There is no solar roof.’”

Devoting 400-500 square feet of roof space on an average 2,000 to 3,000 square foot home will accommodate a 2.5 kilowatt system—enough to meet the average household’s yearly power needs.

The cost of installing a system ($20,000 to $25,000) can be largely offset through rebates and tax credits averaging $7,000 to $10,000 in California. The remaining net cost ($13,000 to $20,000) can be recouped through energy savings in 7 to 13 years, or sooner if you sell your home, since every dollar invested in a solar system raises your property value by $20.

“So if you save $1,000 a year on energy in your first year and the value of your home goes up $20,000, you are already $7,000 ahead on a system with a $13,000 net cost,” Castillo notes. “I believe that you will always get your money back, plus.”

The government strongly encourages investment in solar. The California Energy Commission currently pays rebates of $3.20 per watt for homes and up to $4.50 per watt for businessese. California also has a first year 7.5% state income tax credit for residential solar systems. Commercial businesses can qualify for an additional 1% federal investment tax credit, plus five years of accelerated depreciated.

Borrego Solar Systems advises its customers to finance solar PV electric systems through home equity loans, then deduct over $7,900 in interest with monthly payments of only $87. The company website estimates the average homeowner will save $49,000 in energy costs over the life of the system AND add $14,600 to the resale value of the home.

Installing your own solar system also protects you from future utility rake hikes, allowing you to lock in electric rates for the next 30 or 40 years or so (the estimated life of a solar system).

Solar power has other benefits besides saving you money. Solar reduces U.S. dependence on fossil fuels (including foreign oil) and lowers production of carbon dioxide (a cause of global climate change). In addition, Castillo points out, “If 135,00 homes a year installed just 2 kW of solar on each house, you would eliminate the need to build a new 65,000 megawatt power plant.”

Solar can even reduce the risk of terrorism in the U.S., Castillo believes. “If terrorists could attack a nuclear plant, they would create tremendous devastation,” he concludes. “Our best defense against an attack on centralized electricity is to decentralize it and minimize the effect that terrorism can have on our power grid.”