The demand for energy is always on the rise, and with increases in demand comes an increase in price. If you want to reduce the monthly electric bill for your home or business, you can go solar. Installing photovoltaic solar panels is becoming increasingly popular as people look for ways to trim their expenses. As an added benefit, solar power is more environmentally friendly than other kinds of electricity generation, so going solar can help you reduce your carbon footprint.
Initial Costs
There's no question that the initial cost of installing a solar electric system is quite high. You typically install the panels on rails mounted on sloping roofs. A complete installation includes the panels, wiring, mounting hardware, circuit breakers, inverters and labor. Inverters convert direct current from the panels to alternating current and sync it to the 60-cycle timing of the local utility company. A complete system installation can easily cost from $6 to $8 per watt. A small system producing 3 kilowatts costs about $24,000. A 9-kilowatt system, enough to handle virtually all of a modest home's electrical needs, runs between $70,000 and $80,000.
Factors The Can Increase Costs
Solar panels must have a complete, unobstructed view of the sun all day. You need to remove any trees or other structures that cast shadows on any part of the panels. If you cannot remove a structure such as a chimney or a barn, you need to find an alternative panel location. Also, you must place roof panels on roofs that face the proper direction for maximum efficiency; this is generally east and south in the continental United States. If you cannot install the panels on your roof, you must install them on clear area on the ground. This adds to the installation cost, because ground placement requires concrete foundations and additional mounting structures.
Factors That Can Decrease Costs
Some states offer grants to help lower the initial cost of installing solar panels; check with your state, because the grants change often. Some states also offer solar renewable energy certificates that you can redeem for cash. For example, New Jersey is very aggressive in promoting solar energy; as of 2011, a New Jersey homeowner with a 9-kilowatt system can expect to receive $6,000 to $7,000 a year as income from certificates, which will continue for 15 years. Assuming you take a loan to pay for the installation, the income from the solar certificates could help cover the monthly payments, effectively making the installation cost of the system free. In addition, the federal government also offers a tax credit for part of the cost of the installation of solar panels; check with your tax adviser or the Internal Revenue System website. And of course, you save money every month on your electric bill.
Future Costs
Since you don't have to pay for the fuel for your solar panels, you have a hedge against future electric utility rate hikes. Solar panel systems require little to no maintenance. Typical industry warranties are 10 years for inverters and 25 years for the panels themselves.