Solar Power Incentives

Solar or photovoltaic systems are an increasingly popular way to offset rising utility bills — just place them in the sun and let them go to work converting sunlight to electricity.

Photovoltaic (PV) systems have no moving parts, need little upkeep, and are simple in design. The sun provides the free energy and the silicon used in making PV cells is one of the most abundant materials on earth. However, refining the silicon and making the cells is expensive and solar cells are somewhat inefficient. Standard PV efficiency is currently at 12 to 14 percent with suggestions that the upper limit is 30 percent, so until recently homeowners have needed large, costly systems to collect enough energy to power their homes.

The economics of solar is changing due to rising energy prices, technological advancements, and government incentives. According to Noah Kaye, director of public affairs for the Solar Energy Industries Association in Washington, DC, skyrocketing natural gas prices have translated into electric rate hikes. At the same time, technology improvements and improved manufacturing have slashed the cost of solar by 95 percent since the 1970s. In addition, a suite of incentives and other policies are now encouraging consumers to go solar.

Deciding to Go Solar

Homeowners considering solar must consider the amount of annual sunshine in their area. Available sunlight is specific to the region where the home is located and the way the house is sited with respect to the sun. A house in the woods won't benefit as much as one on a hill with great southern exposure.

On its website, SEIA suggests that a typical home in Maine needs 291 feet of roof space to meet one-half of its typical electricity needs — only 25 percent more roof space than needed in sunny Los Angeles. Homeowners can get a readout of what the shift to solar would be like for them at www.Findsolar.com, a joint partnership between the U.S. Department of Energy, American Solar Energy Society, Solar Electric Power Association, and Energy Matters LLC,. The site includes "My Solar Estimator," which provides a general estimate of the required system size and savings by considering a person's county, utility, and typical energy bill.

Rebates and Tax Credits

Federal, state, local, and utility incentives for going solar continue to grow. In 2009, the U.S. Congress extended federal tax credits for homeowners who install solar, for eight years.

State, local, and utility incentives differ greatly. People can find incentives ranging from tax credits and exemptions to rebates, loans, and grants at the Database of State Incentives for Renewables & Efficiency. When visiting the website, consumers should look at the area's interconnection and net metering regulations, which differ in all 50 states, Kaye suggests. In a majority of states, owners of a grid-connected photovoltaic system can sell any excess electricity back to their local utility, watch the meter spin backwards, and receive a credit on their electric bill (a process called net metering). Some states recognize the peak power/renewable energy value of solar electricity and offer special incentives for grid-connected solar.