Converting sunshine into electricity via Photovoltaic (PV) Panels simply costs more than burning fossil fuels. However, grants and tax incentives (see below) from governmental and other organizations now make it more cost-effective.
The ROI Calculation is based on a 5kWatt system for a house with at least 300 sq. ft. of southern roof exposure. The base cost is $35,000, and when factoring in the 30% tax credit, the price is lowered by $10,500 to $24,500. You may also be able to receive a grant for $20,000 from the Sustainable Development Fund, and the price can come down even further with Renewable Energy Credits (RECs). Your solar installer can explain the details as they pertain to you and your state. Over the 25-30-year life of the system, based on current electrical rates and conservative 6 percent annual inflation, you may save $60,000. This ROI does not factor in the benefit of an increased property value which is projected at 20% of the gross cost of the solar system or $7,000. This boost in value is naturally subject to market and buyers, and if it were factored in, the payback would come in well under 10 years.
TAX CREDITS: The American Recovery and Reinvestment Act (ARRA) provides you with a 30% Tax Credit for Solar Panels that are put into service by the end of 2016. This tax credit item is for existing homes or new construction. This does not have to be your primary residence, as vacation homes and rental properties are also eligible. The tax credit includes the cost of materials and installation. (3 KEY POINTS - #1: The tax credit cap is $1,500 on collective home improvement elements other than Geo-Thermal 'Ground Source' Heat Pumps, Solar Hot Water Heating, Solar Photovoltaic, and Fuel Cell systems - which each have no cap and are eligible through 2016. #2: The tax credits for exterior 'weatherization' improvements like windows, doors and insulation do not include the cost of installation! #3: If you reach the $1,500 cap in 2009, you are not eligible for additional tax credits in 2010.) Choose Solar Panels that meet these criteria to get the Tax Credit; and check products carefully, because in many cases an ENERGY STAR certification does not necessarily meet the tax credit requirements below:
• Photovoltaic systems must provide electricity for the residence, and must meet applicable fire and electrical code requirement.
• Tax credit for 30% of entire cost.
• Note: Penalty repealed for subsidized renewable energy financing. This allows businesses and individuals to qualify for the full amount of the solar tax credit, even if projects receive subsidized energy financing (e.g. below market loans, tax preferred bonds, state grants etc.). This amendment shall apply to periods after Dec. 31, 2008.
Rooftop installation begins with
the support brackets and then
the first of multiple panels, in
this case 24 panels in the array.
See the Tax Credits: Click Here
For a Directory by State of 'Green'
Partial completion of the lower
level of the Photovoltaic
Panels illustrates how they
sits just above the Solar Hot
A hand held latitude indicator
serves as one of the factors
involved in estimating the
potential electrical generation
of the system.
Electrical installation includes
Dual Meters on the outside of
the house and an Inverter on
the inside, typically in the
basement or utility room.
The Dual Meter system
effectively tracks the electricity
that you use and that you
produce, so that you can avoid
the major cost of a battery
The Inverter transforms the
Direct Current (DC) generated
from the Photovoltaic Panels
into the Alternating Current
(AC) that powers the house.
This Inverter is located in the
basement and it also shows
the daily power yield and the
corresponding CO2 offset.