Nine Reasons Solar Can Be Less Expensive Than You Might Expect

Even with all the talk of “dollars per Watt” being 100 times less expensive than it was 20 years ago for solar, the stigma that solar is expensive remains. According to solar industry data published by the Solar Energy Industries Association only half a million US homes or businesses have “gone solar.”  Now is the time to rethink that out-dated perception and realize anyone can choose their own shade of green.  A little effort to traverse the learning curve and make a reasonable investment can lead to significant rewards. Here are nine reasons to reconsider solar!

Graph fromeconomist.com

The solar industry has broken away from the one size fits all model, giving individuals and companies a variety of options tailored to fit their needs, from small portable systems to large-scale permanent megaWatt installations, with many choices in between.  

1) The end of year is a great time to take advantage of federal tax credits for home and business. 

In 2006, the Solar Investment Tax Credit (ITC) was enacted to encourage the installment of solar modules on both residential and commercial properties. This 30 percent tax credit expires on December 31, 2016, making today a great time to think about investing in solar and adding a tax credit to your 2014 return. For the sake of round numbers, a $10,000 investment reduces your taxable income by $3000!  If you are taxed at 33% like many Americans, you just DIDN’T pay $1000 in taxes.  Read more on solar investment tax credits and federal tax incentive forms - residential and commercial.

2) And don’t forget state tax incentives… 

There are also a variety of state residential and commercial financial incentives for renewable energy applications and installations. For example, Massachusetts offers a 15% state tax credit for a number of systems including solar water heat and solar space heat.  

3) Many states and localities also give property tax breaks for energy or pollution control equipment.  

In Virginia, 19 different counties exempt or partially exempt solar energy equipment from local property taxes and many other states have similar programs: http://www.dsireusa.org/ and VA DEQ 

4) Solar cooperatives are springing up everywhere  

If you are considering a solar project for your home or business and are not sure where to begin, look for (or start!) a solar cooperative near you. Solar cooperatives have been forming across the county as a way to pool purchasing power and share resources and best practices around financing and installing solar projects. As part of group of homes or businesses, you are more likely to get a bulk discount on solar modules and installation, which could translate into savings of 30% or more on systems.

 Find a cooperative near you:  cleantechnica.com or transformgov.org  or google “Solarize (your city here)”!

5) Low-interest financing through credit unions or local banks is becoming popular.  Some even offer rebate programs.

Solar is an investment that will save you thousands of dollars over time and although systems are more affordable than ever, they do come with upfront costs. Check in with your local bank or credit union to see if they participate in PowerSaver Loans, a program of the U.S. Department of Energy to finance residential energy efficient systems and renewable energy upgrades.

In Colorado, a credit union partnered with local company EnergySmart to provide low-interest financing along with rebates to homes and businesses interested in installing renewable energy systems.

6) Your business may qualify for a federal grant like those offered by the Rural Energy for America Program (REAP).  

The REAP program provides “financial assistance to agriculture producers and rural small business for the specific purpose of purchasing, installing and constructing renewable energy systems.”

7) The recent availability of portable and/or expandable systems can offer a lower-cost, “toe-in”, lighter shade of green entry into solar power.  Powerful portables like SUNRNR can be used to lower energy bills by running everyday appliances, business equipment and tools as well as providing backup power in the event of a power outage, all without the expense of a full installation.  One SUNRNR unit offers 5% of an average American household’s energy consumption daily.

This educational article introduces technical specifications and definitions while this one is more general and comparative.  Both are great starting points to determine if a small-scale system would meet your needs.

To recoup your expense and even profit from it, you might want to look into whether your solar generator system company offers “Brand Ambassadorship”, like a sales rep getting a commission for referrals.

8) Use available resources to ask the right questions and get the best possible answers. (AKA The reason it might be MORE expensive than you might think.)

Did you know full residential installations that do not incorporate battery storage or special circuitry can offer NO electricity during an outage even if the sun is shining?

Or that a leased system might make it challenging to sell your house in the future?

Or that you may have to pay a fee to sell your excess grid-tied solar power back to the utility since you are using their grid to do it?

The renewables industry is just gaining momentum and there are many resources available, such as at Energy.gov, to avoid making mistakes that may cost you money or not fulfill your expectations.   Probably the most difficult part of all of this is first defining your own power needs or wants.

9) Lastly, the Return on Investment(ROI) is so much more than financial.  

Each solar “installation” is unique, as are the applications for that installation.   There is always the average $100/mo electric bill, 20-year payoff spiel, but there is so much more.  For one, because you did not buy 11MW one year from your utility, you saved them the cost and 7.5 tons of CO2 emissions to make it.  If you are using a portable solar generator in place of fossil fuel, the equivalence is 120 gallons of gas not burned per year, ~$400 not spent and 1.1 ton of CO2 not emitted!  (Save one freezer load of food and gain another ~$350 credit.)  If you are avoiding running a new power line to an off grid location, you just saved $15,000 to $50,000 per mile!  There are hundreds of ways to look at it, maybe all are correct.  Check out this fun calculator from the EPA for evaluating one aspect of ROI. 

Blog contributor: Jenna Clark