A Wall Street Journal article discusses the economics of solar power (subscription required), and how outfitting your house with solar panels can require up to 20 years before you break even by generating enough electricity to pay for the panels.
New federal tax incentives, along with soaring home-energy bills, might seem to brighten prospects for using solar power in the home. But environmental benefits aside, the economics of solar in many parts of the U.S. are still pretty dreary.
For tax years 2006 and 2007, homeowners can get a federal tax credit equal to 30% of the cost of buying and installing solar photovoltaic paneling or a solar thermal water heater, up to $2,000 per upgrade.
But that $2,000 tax savings won’t shave much off the sky-high price tag of installing solar panels. A system of photovoltaic panels that convert solar radiation into a home’s electricity often costs about $8,000 per kilowatt before incentives. That’s a total investment of anywhere from $16,000 to $64,000, considering that most homes need between a two- and an eight-kilowatt system to replace most or all of their electricity needs. (The higher end of the range may include homes that use electricity to power their heating systems.)
Even with the new federal credit, it often takes 20 or more years to recoup the initial investment through energy-bill savings.
The credit makes a bigger dent for people buying a solar thermal water heater, which uses a special solar panel to heat a home’s water supply. These usually cost about $7,000, so the $2,000 credit shaves about 30% off the price. (The federal tax credit can’t be used if the solar water heater is primarily being used to heat a swimming pool or hot tub.)
The article also mentions a cool site called FindSolar where you can plug in your own numbers and see how long it would take you to break even if you installed some solar panels. It also mentions the DSIRE site with a database of state incentives to find out if your state will pay part of the cost of installing solar.
Popularity: 1% [?]
