The Cost of Solar Panels for Your Home

Reader Contribution by Mary Lou Shaw
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In 2008, my husband and I made the decision to install solar panels whose production would roughly match our energy-use. Although our main aim was to make our homestead more sustainable, I believe investing in a solar system is also a wise economic decision.

The following article contains facts about our solar energy, which includes solar panels and a solar hot water heating system. I’ve included an online resource to show what financial incentives are available in your state. Whether you choose to invest in renewable energy for the health of your pocketbook or for the health of the planet, the following information may help you begin.

Why we decided to stay on the grid: Being “off the grid” has the great appeal of self-sufficiency, but we don’t have storage place for batteries and neither of us wanted to add non-biodegradable batteries to our homestead. Additionally, it just seemed simpler to stay on the grid in our semi-suburban area.

Affordable solar includes cutting energy consumption: Our goal of sustainability had already included reducing the amount of energy we used. We had re-insulated the walls of our small farm house, changed windows and re-insulated and ventilated the attic. Clothes are hung outside in the summer and on a rack by the woodstove in the winter. We heat and cook with wood and the windmill pumps water for the animals.

Another big deduction from our electric bill came with installing a solar hot water heating system whose total cost was less than $900. This system includes two large panels which we installed on the house roof. Propylene glycol is heated in these panels and pumped to an exchanger in the basement where water absorbs the heat. An insulated tank stores this very-hot water which is then diluted to the hot water we use. All the energy this system requires is provided by a small solar panel.

A solar water heater system typically saves about 18 percent of a household’s energy bill and is independent of the grid. Solar hot water heating seems like a great place to start in reducing energy bills and making a meaningful, ecological statement.

After getting that far with reducing our energy consumption, we were ready to see if the sun could power our homestead.

Cost of solar: We bought our original 20 solar panels five years ago and an additional four, more-efficient panels, this past summer. Efficiency of solar panels is going up as prices are coming down, but the combined package was still around $30,000. That sounds like an impossible sum, but we actually had it mostly covered with the following help:

• One-third of our cost was paid by a state grant, available at that time.
• Another third was paid by federal tax incentives (see “incentives,” below).
• Five thousand dollars of the final third was covered by carbon credits. Although still available, these credits are no longer as generous for the “RPS” reason listed below.

Remember, too, that your most immediate reward (besides feeling good about helping the planet) is the money you save on your electric bill. It’s fun to get a bill of $16 if it used to be $160!

Ohio currently gives little support to renewable energy. I’ll explain state and federal incentives, but you can find what support your state offers by going to

Financial incentives in Ohio for solar and remaining on the grid: Ohio’s meager financial support for renewable energy is found in these three points:

1. There is a property tax exemption. The value of a home goes up when renewable energy is installed. In Ohio, this increase in value is totally exempt from additional property tax.
2. The solar equipment itself is 100 percent exempt from sales tax.
3. Net metering requires the utility not only monitor and report how much energy a solar system generates and how much energy is used, but requires they pay us for the difference.

Financial dis-incentives in Ohio for solar and remaining on the grid: The renewable energy laws in Ohio are weak, but in May of 2014, even the weak goals for the alternative energy standard were pushed back by two years. Here is the current situation:

1. The Renewable Portfolio Standard (RPS) in our state only requires that 12.5 percent of energy comes from clean, renewable energy by 2026, and only .5 percent need come from solar! Without having a strong RPS, energy companies won’t invest in renewable energy because, of course, they don’t want to cut into current profits.
2. This RPS is so weak that solar companies no longer pay customers for putting in solar.
3. Ohio gives NO solar power tax credits. At least the federal government still gives a 30 percent tax credit for installation, and this makes investing in solar especially wise if you receive a lump sum from inheritance or retirement.
4. A weak RPS also resulted in lower price for carbon credits.

Does it pay to go solar? It does for us. I personally need a way to tread softly on this beautiful planet, and not using energy from petroleum is allowing me to live more consistently with my values. Because of the financial help available, we also had most of our costs covered while we continue to save on our electric bills.

Mary Lou Shaw homesteads in Ohio. Her book, Growing Local Food, can be purchased through MOTHER EARTH NEWS’ books.

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