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SOLAR POWERED HOMES....ARE THEY WORTH THE COST IN THE END?
Owners of solar-powered homes sleep easy all summer. And it's only in part because they can keep their houses cool without paying obscenely large electricity bills.
Rather, by opting for a photovoltaic (PV) solar-power system, which relies on roof-top solar panels to convert sunlight directly into electricity, a homeowner can, depending on the time of year and the climate in which he lives, cover his monthly energy bill and in some cases, even sell surplus energy back to the grid.
This is due in large part to state and federal subsidies, which homeowners are increasingly embracing. Residential solar installations have tripled since 2002, according to the Solar Energy Industries Association (SEIA), a trade group for solar energy-related businesses.
But installing a solar energy system adds up--in some cases, capital costs equal just under a decade's worth of household energy costs. And silicon, the primary material used in converting sunlight to energy, is expensive. What's more, most utilities cap the amount of juice they'll buy from residential suppliers at around two kilowatts. In most areas, this is enough to power a 2,000-square-foot home and sell a surplus back to the grid at peak energy points. Anything larger than that might become less cost-effective.
Environmentally Friendly Extras
Still, many find going green pays off. One such boon is the federal Energy Policy Act of 2005. It grants a one-time 30%-of-cost tax credit to homeowners installing photovoltaic solar-power panels.
Additional incentives are available on the state level. Got a home in New Jersey, Tennessee or California? You're in luck. All offer hefty bonuses for homeowners using solar energy.
"The vast majority of the solar PV installations occurring in the U.S. at present are in California and New Jersey," says Ryan Wiser, author of the Solar Energy Industries Association's 2006 Solar Energy Report. "Many other states also have aggressive programs to encourage solar photovoltaics, but the results in California and New Jersey probably deserve particular note."
California's 2006 Solar Initiative provides $800 million in rebates over 11 years to homeowners using PV solar systems, and, upon its passing, called for 500,000 new-home solar systems to be included in the state's net metering program, which allows homeowners to sell energy back to the grid.
The results thus far? Sunny California is perhaps the perfect place to invest in solar power. The SEIA reports that 73% of new solar systems installed nationwide last year were in California.
New Jersey's program offers scaled rebates based on wattage capacity, meaning that the more juice your system can generate, the more the subsidy is worth. There, the number of residential solar power-generated systems accounted for 13% of those newly installed nationwide. Not bad for a small state. Oh, and Jersey added five times as much solar wattage last year as neighboring New York.
Further south, the Tennessee Valley Authority (nyse: TVC - news - people ) offers a one-time $500 disbursement and 15 cent-per-kilowatt payment for residences generating surplus power. As a point of reference, the retail outfits that buy from the TVA charge customers about 7.5 cents for power, meaning that if it's a sunny summer in the South, a solar-powered home can net a homeowner a decent profit in what effectively amounts to a subsidy.
Another strategy states are implementing to increase solar-energy use is to incentivize the building of solar systems directly. Austin Energy, a community-owned utility in Austin, Texas, offers low-interest, no-fee loans up to $20,000 for the purchase and installation of PV solar systems, payable over 10 years with no prepayment penalties.
Earth-Friendly Economics
It should be noted that most solar-powered houses do not completely power a home through all seasons, and are usually only part of an energy generating system, which often includes geothermal energy systems. To achieve a net-zero rating, a home must use less energy during trough energy generation months than the surplus it creates in peak months. This is difficult to do.
It is also difficult for residents in some areas to gain any kind of benefit from surplus solar power. Ten states do not require utilities to offer net-metering to customers--Missouri and South Carolina are among them--and others, like Nevada, do not require utilities to compensate customer-generated energy.
Researched By Norman A. Anderson
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