|
|
|
|
Solar
Energy Advocacy for San Francisco and the Bay Area
|
September 11, 2007 |
|
INTRO ECONOMICS IS SOLAR FOR ME BLOG/NEWS RESOURCES ABOUT US HOME |
GET A SOLAR EVALUATION |
|
Intro to Solar
The first thing most people ask when investigating solar electricity is "how much does it cost?" They are often surprised to learn how cost effective solar energy is today. Thanks to improvements in solar panel efficiency, reductions in hardware costs, and government incentives, solar electricity makes economic sense, not just environmental sense. (Click here to learn how solar electricity works.) Depending on how much electricity you use today, and how much you'd like a solar panel installation to offset your usage, you can find solar pays for itself in 5 to 10 years. In some cases the return on investment can be extremely attractive (see Solar Economics for more details). For most environmentally conscious neighbors, we're most concerned with reducing our "carbon footprint" and solar energy offers an excellent way to accomplish this. Given the option of paying $150/month to PG&E or $150/month to pay for solar panels, we'll gladly opt for the green option. Four key factors make Solar economics particularly attractive: Tiered Pricing, Net Metering, Time-of-Use Metering, and State and Federal Incentives. PG&E, like most utilities, charges progressive rates for electricity based on usage. That means the more you use, the more you pay for each incremental kilowatt-hour of energy. If your average monthly electric bill is over $75, then you're already into the higher price brackets. If your bill exceeds $150 per month, your rates are significantly higher than the base/intro rate. With solar electricity, any energy produced by your panels directly offsets the most expensive rate tiers first, maximizing the value of your investment. (include graph of tiered rates) Solar panels produce the maximum output when the sun is most intense, between 10am and 2pm. For many households electrical usage is at its lowest in the middle of the day. The excess electricity produced by the panels is then pumped back into the grid, and your meter actually runs backwards. At night, your panels stop producing electricity, your usage increases, and your home draws electricity from the grid. PG&E will only bill you for the net amount of electricity you use - this is called Net Metering. To account for seasonal variations in solar panel output, Net Metering means you will only be invoiced once a year for electricity. Every month you will receive a statement, instead of an invoice, that reports your current balance/usage. Note, even if your panels completely offset your electrical usage, PG&E still charges $5-8/month just to be connected to the grid. For now PG&E won't write you a check if your produce more electricity than you use... but that may change in the future. Solar-powered homes in the Bay Area have the option to sign up for "Time-of-Use" metering. These meters charge higher electricity rates during peak hours (12pm - 6pm) in exchange for lower rates during off-peak periods. Most residential solar installations produce excess electricity during peak hours, and draw electricity from the grid during off-peak hours. Time-of-Use metering can yield huge returns since you are essentially selling kilowatts back to PG&E at high rates during the day, and buying at low rates at night. Time-of-Use metering requires a physical replacement of your current meter. The household bears the cost of this replacement, generally around $1000 (check this). Your solar installer will include this in their quote. To take full advantage of Time-of-Use metering, you should plan your electricity usage appropriately. Avoid high energy activities such as running the washer/dryer or dishwasher during peak periods. Save these tasks for the morning or evening, when your rates are lowest. Time-of-Use metering allows most solar households to eliminate their electricity charges with a system the offsets 70% of their actual electricity usage. 4. State and Federal Incentives California State and US Federal incentives now make solar electricity financially attractive for most homes. While there is an upfront investment required, these systems pay for themselves within a matter of years. For reference, a 2.5 KW system, large enough for a 1500 square foot home in costs about $25,000 with all equipment, labor, permits, etc. State and Federal rebates and incentives drop the net cost to $16,000-17,000. Many people choose to finance this investment over 10-20 years, and find that their net monthly cost is similar to what they used to pay to PG&E, but gain all of the benefits of solar. If you choose to finance the initial investment in solar, the interest expenses are also tax deductible. |
Get a Solar Evaluation Sponsored Links |
|
|