The payback element of a solar-electric system is a key factor for most people considering the transition to solar power, and, historically, it's sometimes been difficult to determine. Several factors influence the payback for your specific circumstances, including the climate, state or federal incentives and utility prices for your local area. With advances in photovoltaic (PV) technology and accumulated historical experience to work with, you can now accurately calculate the payback for your system.

While adequate sunlight is available for most of the continental United States, other factors that make solar a good investment vary widely from state to state. Net-metering laws, monetary incentives and high electric costs each brighten the prospects of using solar electricity:

Net-metering policies usually allow the user-generated solar energy to counter the user's electric utility bill.

A temporary federal policy provides for a tax credit of 30 percent of the system's total price (up to $2,000 for a residential set up) for systems installed in 2006 or 2007.

State incentives and rebates can reduce the price of a system by up to 60 percent, depending on the state. Tax credits are also available in some states.
Check out www.dsireusa.org to find more information on state and federal policies.

Rising electric costs are another significant factor. Since the solar energy you'll generate in the future will counter electricity charges at the then-current price, a solar-electric system is protected from inflation. The higher electricity prices go, the more you save.

There are many approaches for evaluating the financial cost and benefit of a solar system, including cash flow, property value increase and your compound annual rate of return (or interest-rate yield). Learn more about these methods in Andy Black's article, 'You Can Afford Solar Power.'

You can find more tools for determining the payback of your solar system at www.ongrid.net/payback. Since payback value depends on many factors, read carefully to be sure that all the information (and, therefore, the payback valuation) is correct for your system.

Check out the complete 'You Can Afford Solar Power' from Mother Earth News for additional resources and more information about solar-electric payback.