Residential solar power is growing very quickly in the US. A new 30 percent federal tax credit has created a dramatic boost to the home solar power market. Falling solar panel prices have also added to the financial incentives. In some locations, with combined federal, state, and local incentives, the payback on the initial investment can be as short as six years. Since the beginning of 2009, residential solar energy installations have grown by 200 percent.
The Economics of Solar Power
With power utility rates increasing substantially every year, estimates are that the average homeowner will spend more than $100,000 in the next 25 years on electricity. With costs that high, it makes sense to turn that expected cost into an investment that yields numerous dividends. Returns on a residential solar power system can be as high as 25 percent. This figure reflects the lower cost of investing in a solar power system now—combined with the increase in value to your home. According to the Appraisal Institute, the value of a home increases 20 times the annual savings in electricity. So if you save $1,000, your home value increases $20,000 without increasing property taxes.
Most residential solar power systems are connected to the grid through a meter enabled for net metering. This means that when solar panels are generating more power than you are using, the excess power will be fed back into the grid, and your meter will actually spin backward. Your electric utility will give you credit for the power you generate, deducting money from your bill.
In some locations that are using feed-in tariffs, the utility company is required to pay consumers up to 300 percent more for the power generated. While feed-in tariffs are not currently widespread, you can see the impact they have on consumer demand for residential solar power.With prices of alternative sources of energy rivaling those of fossil fuels, the future of renewable energy is bright.
This is the perfect time to look into whether residential solar power is right for you, and that's why we've put together an ebook to help you through the process.
This ebook provides all the information you need when it comes to residential solar power, including:
- How to power your home
- Advantages of solar panels
- Other forms of solar power for your home