Solar energy has become one of the most popular alternative methods for providing power to a home. There is no denying its green credentials but is it a way of also saving money?
If you’re like me, you probably think that getting into solar energy is really expensive. In fact, I put off even investigating it for my home because I thought I wouldn’t be able to afford it.
Over the years, government subsidies and rebates have come and gone, been increased and decreased, making it a bit hard to keep up with how you can benefit. Many schemes are confusing and complicated, causing people to give up any ideas for going green with solar power.
The best news regarding solar power is that the initial set-up costs have dropped by more than 80% in the last twenty years, making it a more affordable option these days.
The time it would take to get back your initial investment depends largely on where you live and what incentives and rebates are available at the time you install your solar system. The other factor that affects the pay-back period is how effective the solar panels are at harvesting the sun’s energy to convert to electricity; areas that have strong, consistent sunlight for long periods each day will allow solar to be most effective. Some US states, such as New Jersey and California, offer huge rebates; this means that you can recover your initial investment in around 7 to 10 years. Other states have lower rebates so this time-frame will be considerably longer.
You will need to investigate the cost of solar energy for your home yourself but as a rule of thumb, these figures may help you. The average sized home will typically install a 4,000 watt system at around $20,000 after federal rebates and tax credits. This will supply about 75% of the power requirements of most homes and families. A solar system of this size will reduce the output of carbon dioxide by about 7 tons a year, a 75% reduction. It is definitely a green option.
The other main consideration when looking at solar power for you home is what type of solar system to use. You could have an off-grid system, that is totally independent of the local electricity supply, or a grid-tie system where you remain connected to the electricity grid even though you have solar cells on your roof.
One of the ways you can save money is by feeding power back into the grid, which can happen when you are on a grid-tie system. When the electricity your solar panels are producing is not being used in the house, it returns to the grid. Your power meter spins backwards as the energy goes into the grid and you get credited for this on your power bills. The set-up costs are less for a grid-tie system as well, because you don’t need to have expensive deep-cycle batteries to store the power your solar cells are generating, as with the off-grid system.
Another way to save money with solar power is to install a solar hot water heater. This is a different system again to solar electricity generation and is generally a cheaper option to install. Heating water in the home accounts for about 20% of the total energy costs, so if you can harness the sun’s energy for this purpose, you will save money.
Solar hot water systems vary according to the climate where you live. Water is heated in pipes running through the solar panels on your roof and either used directly or pumped into a storage tank. They are especially effective in warmer areas; in California, for example, solar hot water could potentially save $1,000 off the power bills of an average sized family. The pay-back period is less with solar hot water as well, the average being under 5 years.
Finance is usually available to fund your solar power installation and many homeowners find that they can get a finance package that costs them less than the power saving. For example, the repayments on the finance might be $120 a month but the saving could be $135 a month, meaning you are ahead from the beginning.
Because there are so many variables with solar power, especially as far as the savings you could make, you should consult an expert for advice. Find out how effective solar power is in your local area, what the initial costs are and how long the pay-back period is likely to be. As with anything, it’s always a good idea to get several quotes after talking to several solar power experts. Find out what rebates you would be entitled to and factor these into your total costs.
Only use a certified solar installer from a reputable company to make sure that your solar system is installed correctly and to local specifications. Start to enjoy the savings as soon as your solar power system is up and running. While your initial costs may be high, you will save money off your power bills in the long run.
So, have you tried solar?
It’s surprising how affordable solar power is in some markets. I advise a large company on where to put Solar Panels so I try to stay up to date with all of the solar markets across the country.
I’ve looked at a number of small scale solar installations (<1MW) where the power purchase agreement economics really does work out. A number of solar companies are even willing to take on the liability. They put solar panels on your roof for free then send you a bill that will always be less than the utility rate. This is a win-win book.
I wish we had that kind of win win program where I live.It is in the works but not a reality yet.
This post has answered a number of questions I have in solar power. Hope it get more common usage in our homes. I still do have some questions like. Is there a way to store solar power? In case we experience some gloomy days.
This post has answered a number of questions I have in solar power. Hope it get more common usage in our homes. I still do have some questions like. Is there a way to store solar power? In case we experience some gloomy days.
I know folks build battery farms to store solar energy. Expensive to do but worth it if you can afford a number of batteries (not even sure what type – car I think?)
We have not tried solar power yet. However, we only plan on staying in this house for a few more years. Once we move and set up shop in a new place, we definitely plan on switching to solar!!!
Good to hear. We are hoping to work it into our house in the future too.
I wanted to look for it on my new house that I am buying…But that 7 to 8 year payback is crazy. I am not sure why the cost on these systems haven’t dropped even further.
Unfortunately, due to the lack of sunny days here in the Maritimes, solar power probably isn’t as good of an investment as it would be in say, California. It’s definitely something I plan on costing out when I get my own home though.
There are some panels that can still absorb energy through clouds. You should look into them.
Great article Miss T. I always hear conflicting spin and reports as to the economics behind solar power these days. I’m in a similar situation as one of the commenters above in that I will be moving within the next two-three years. At that point I will have to see if we want to build our own home or buy re-sale. Buying new has some great long-term benefits in that we could put in a state-of-the-art solar-and-battery system with some good incentives here in Manitoba (for now at least), as well as a great geothermal heating system (which I’m completely sold on). If we decide that where we’re moving will be the place we put roots down (likely), I think these one-time investments make a lot of sense.
That is great to hear. I hope more and more people that are wanting to out down roots in one place will consider using these technologies.