Making Solar Electricity Affordable

| 2/24/2009 12:36:00 PM

Tags: energy efficiency, solar panels, Dan Chiras,

Many people who are contemplating installing solar electric systems on their homes struggle with the high initial costs. To pay for a system, they either have to dip into their savings or take out a loan. A 3- to 5-kW grid-connected solar system, suitable for most homes, can run $30,000 to $50,000.

Even with recent legislation that provides a 30 percent tax credit for solar and wind systems for homes and businesses, the cost of such as system will still cost $21,000 to $30,000, which is a substantial piece of change.

Isn’t there some way to reduce this cost?

There is. It's called efficiency.

Richard Perez, founder of Home Power magazine, ran the numbers. He found that every dollar invested in energy efficiency could reduce the cost of a photovoltaic (PV) system by $3 to $5.


By reducing the size of a system one must install to meet his or her needs. The economic savings from efficiency are quite substantial. For instance, a $2,000 investment in home energy efficiency — for example, weatherization, insulation and energy-efficient compact fluorescent or LED light bulbs — will reduce the demand for electricity. This, in turn, will reduce the size of the PV system required to meet one’s needs. It could easily save $6,000 to $10,000 on the cost of the system of a 3- to 5-kW PV system before tax incentives. Taking into account the 30% federal tax credit, the savings would be $4,200 to $7,000.

Spend a little more on efficiency and the cost of the system drops even more. If you invested $4,000 in efficiency, the total system cost would decline by $12,000 to $20,000. Taking into account the federal tax credits once again and the decrease in initial cost would be $8,400 to $14,000.

5/17/2009 7:35:26 AM

HI Everyone, i hope you will be all righ there,and the question to ask is that i have a palant of ice fatory due to load shedding of electricity we are unable to run over business so,we are interseting in 100 KILO WATT power genereatin in purchasing so,if u can guid us so,rply me please i will wait..take care bye

4/3/2009 9:05:04 AM

where can i buy the equipment [supplies]to build my own does not look like it is something that is difficult I have a lot of common sense. I have built homes,commerical units, from the ground up. I was a licence contractor in IL.I also have,and carry a card in the refrigeration service engineers society. and I do believe there are many out there who know more then me. IT HAS TO BE BOUGHT WHOLESALE.TO KEEP THE GREEN COST DOWN.FOR WE CAN BECOME GREEN. HAVE A REAT DAY

3/16/2009 8:16:16 PM

A couple of insights, since we installed our own solar panels just last year. The 30% federal rebate is great and applies even if you install the system yourself, but you have to have an up and working system, not just a bunch of stockpiled parts. A lot of the state-by-state rebates require an installer to receive, but the federal rebate has no such requirement. It can also be taken for grid-tied or off-grid installations. See IRS tax form 5695 for more information, it's very straight forward. As for starting small, we went this way and it's working out great for us. To save money in the long run, you need to know where you're heading and get the base system components that you'll want when it's all finished and simply start with fewer solar panels. You have to do your research though. Most inverters need to have a minimum number of panels (minimum system voltage) attached in order to function. We chose the Outback inverter because the minimum system voltage is zero as far as I could tell and one could theoretically install it in a grid-tied, battery-backup situation without any panels and have what would ammount to a very expensive Uninteruptible Power System (UPS) for their home just waiting for solar panels. This is what we did along with just 4 solar panels (540 watts) and the system works perfectly. We've learned a ton in the process and we're much more confident now and are planning on adding another 4 panels this spring. What every professional told us we couldn't do for under $20,000, we did ourselves for under $7,500 and after the $2,000 rebate that we just got back a couple of weeks ago, our total out of pocket expense was $5,500 for a very complete grid-tied and battery-backed-up system. On a very sunny day in northern Wisconsin we make up to 50% of our energy use from the sun, but we're quite efficient in our energy use already. With another 4 panels, we'll be self-sufficient on sunny days, and we

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