If you are contemplating an investment in alternative energy for your home or business, solar power is considered one of the cleanest, most sustainable and cost effective options available.
Every day, the global media report on weather anomalies — floods, fires and drought — that raise concerns about climate change. At the same time, research shows that the solar power industry has developed home and business power generation systems that can reduce or eliminate your reliance on existing, pollution-emitting energy-generation systems.
Costs to purchase and install are dropping
A significant factor in the decision to go solar is the rapid fall of purchase and installation costs. According to a 2014 Solar Energy Industry Association (SEIA) study, the cash purchase price for a standard efficiency residential photovoltaic (PV) system fell by more than 45 percent from the price of a comparable system in December 2010. The drop in price reflected a reduction of both the direct costs (purchase of equipment and labor to install it), and the indirect costs (permitting, inspections, design and engineering) of putting a PV system fully into production. While the cost of equipment purchase has gone down, the relative efficiency of the system has gone up, so today you’ll pay less for a PV system but get more electricity from it than you would have in the past.
The average cost to install a residential PV system is between $18,000 and $25,000, for a 5.3 kilowatt system. With applicable rebates and incentives, that cost could drop to as low as $10,000 up front. According to Energysage.com, the average Massachusetts home (for example) could save $35,900 over the course of 20 years by using solar electricity instead of their $100/month grid-sourced electricity.
Financial incentives and policies support solar
Tax reductions: Until the end of 2016, the federal government offers a 30 percent tax credit for the purchase and installation of a solar PV system in a home or business. Many state governments also offer similar tax credits, tax deductibility of sales or property taxes, rebate programs, and other financial opportunities to reduce your cost. You can take advantage of these incentives by moving forward with your solar project this fall to reduce your 2015 tax bill substantially.
Lower administrative costs: At the same time, state governments are working to reduce administrative barriers associated with connecting a PV system to the utility grid, which subsequently reduces your costs (again) and encourages others to join the solar power bandwagon.
Solar Specific Loans: Many financial institutions also offer loan packages developed just for solar PV systems. Many of these loans can be assigned to the panels, as those panels are fixed to the building, and paid off over time like a mortgage. This results in no upfront costs at all. The National Renewable Energy Laboratory developed a “Borrowers Guide to Financial Solar Energy Systems: A Federal Overview” that provides information for both borrowers and lenders in financing solar electric power systems.
Investment portfolio gains through solar investment
Housing values rise: It has also been shown that consumers are consistently willing to pay as much as $15,000 more for a home with a roof-top installed PV system over a comparable home with no solar PV resource.
Home maintenance costs go down: Solar PV systems are one of the few energy sources that have little to no maintenance or upkeep costs after installation. With no moving parts, there is nothing to wear out. Keeping them clear of snow or other debris is all that’s needed. Accordingly, the system begins to pay for itself the instant it begins generating electricity and reducing the home’s consumption of grid electricity.
Potential revenues go up: Net metering allows PV system owners to reduce the cost of grid-supplied electricity by the amount of solar electricity generated by the system. In some jurisdictions, PV system owners also can earn money by selling their excess electricity back to the utility.
Environmental issues support the move away from fossil fuels
Every year, coal-fired power plants emit about three-fourths of the total carbon emissions produced by electric generation in the U.S. Together with natural gas (22 percent) and petroleum (1 percent), these fossil fuels account for generating 98 percent of the country’s electricity. Tackling the problem of national carbon dioxide emissions is complex, and the federal government has left it primarily to individual states to determine how to reduce emissions within their borders.
As a guiding point, however, the Environmental Protection Agency (EPA) recently issued the final version of the “Clean Power Plan.” That plan requires each state to achieve its own carbon emissions reduction target by 2030. The plan intends to reduce national carbon emissions by 32 percent from 2005 levels by 2030. California already has pledged to reduce its carbon emissions by 50 percent by 2030. In a May 2015 report, MIT suggested that a massive expansion of global solar generating capacity is “an essential component” of a strategy to mitigate climate change risk.
Electricity costs have been rising steadily in the past six years for a number of reasons. In 2014, the cost was pushed up as cold temperatures froze much of the country and increased demand for heat. Natural gas prices have also risen 17 percent from their 2013 level, and maintenance along with overhauling aging electricity infrastructures also causes increases in local electricity rates.
An investment in a solar PV system for your home or business will reduce your utility costs, increase the value of your home and substantially reduce your carbon impact on the planet. Solar PV power is clean and reliable, and clearly the electricity-generation source of the future.
RGS Energy, founded in 1978, is a market leader in solar energy system installation. To learn how solar could be a good investment for you, visit RGSEnergy.com.