Can Solar Energy Save You Money?



Here’s an article I wrote for someone who didn’t give a very specific description of what he wanted to publish. Six hours after I’d written it, he replied with a more specific description of how he wanted it to be different. Specifically, his audience already know most of this information. Many people in my part of the world do not already have this information, so here, for the lurkers, is why youall should consider investing in solar energy at this stage of its development. Stealth entrepreneurial and investment tips follow:

We’ve been hearing about solar energy technology for years. We’ve been waiting for the technology to reach the point where switching to solar will actually save people money. Has that time come? And, do new buzzwords like “solar power purchase agreements” (SPPA) and “solar leases” mean that using solar energy can be as low-hassle as using conventional electric energy?

Why is interest in solar energy growing?

Solar panels basically run on sunshine. When sunshine hits a semiconductor, like a sliver of silicon, inside a photovoltaic cell, electrons are jolted out of place in the semiconductor material, generating an electric charge. This charge can be harnessed to power heaters, air conditioners, refrigerators, computers, even batteries for electric-powered cars.

The first working photovoltaic module was built by Bell Laboratories in 1954, but was too expensive for mass marketing. Tiny photovoltaic (PV) modules have been powering solar-powered watches, calculators, etc., since the 1980s and, as anyone who had a solar watch in the 1980s knows, the technology has improved dramatically. Bigger and better arrays of multiple PV modules can now turn rooftops into generators.

People are saving money by going solar.

In Arizona, where there’s plenty of sun, little other potential for roof damage, and a huge need for air conditioning, businesses that have invested in a lot of solar panels are raving over their savings. If you glance at a web page titled “Solar ROI,” you’ll probably need to remind yourself that (a) these are good-sized businesses with room for lots of solar panels, and (b) there’s more solar energy to be harvested in Arizona than there is in Oregon.

How much you can save depends on where you are.

Rachel Bennett calculates that a typical homeowner saves about $50 per month. That’s a national average. Obviously, the more sunshine you get, the more each solar panel can do. The more roof space you have, especially if it gets a southern exposure, the more solar panels you can install. Some solar panels are rated more efficient than others. Solar panels can be vulnerable to stormy weather; if you get a lot of rain, snow, hail, and wind, you might want to put your solar panels over the pool or garage area rather than above places where people live or work.

(Don’t have a roof over your pool or garage? Why not take advantage of the tax incentives and add that luxury now? You already knew a roof could save you money on pool and vehicle maintenance. Now it can save you money on electricity as well.)

Simple arithmetic.

Solar panels are rated according to how many watts of electricity they’re designed to harvest in a typical year: 240, 320, etc. Companies multiply the number of watts per panel by the number of panels to be installed, then subtract that from the number of watts your actual electric bill shows that you use, to estimate how much you “ought to be” able to save by installing solar panels. In the Southwestern States this estimate is quite reliable.

Become a producer, not just a consumer.

It’s possible for solar panels to collect more electricity than you actually need. In fact, if the panels are installed on a building whose peak use is not in the middle of the day, you can plan on collecting more electricity than you need.

You could go off the grid, but for those of us who are not electrical engineers, it’s simpler to let the electric company “buy” this surplus electricity, then “sell” it back as credit for the times when you use more energy than the solar panels produce. “You buy low and sell high!” a California company assures.

Electric companies are planning to jack up prices.

Even if your electricity consumption declines in the next few years, your bills could still increase. However, if solar panels make you an electricity producer, you should see rewards on every monthly bill.

Solar panel maintenance can be, almost literally, a breeze.

In a dry climate, about all you have to do is dust off the solar panels every year or so. The photovoltaic cells are designed to last for twenty years.

What if the climate isn’t dry?

Many ecologically concerned homeowners have heard horror stories about older style solar panels damaging roofs. In the Eastern States, storm damage to roofs is a fact of life anyway. Some companies claim that new, improved solar panels can actually protect the roof. In any case most Easterners own a roof that’s pretty much a luxury, and panels installed above the garage can still save money for a home or business.

Cloudy, misty Buffalo, New York, has invested in solar energy in a big way. M.I.T. reviewer David Rotman worries that this investment may not pay off well for Buffalo, but expects it to pay off for individual Easterners…especially if they need the tax break they’ll get in 2015 or 2016.

Tax incentives to go solar are scheduled to drop after 2016.

You might call it government’s reward for helping develop this technology. In 2015 or 2016, 30% of the cost of installing solar panels can be deducted from your federal taxes. In 2017, that 30% is scheduled to drop to 10%.

There may be more, depending on where you live and what you do. States like New Mexico, with lots of sunshine and not much water, offer page after page of potential rewards for participating in the switch to solar energy.

Going solar feels so right.

At the same time that going solar reduces your carbon footprint, it helps send displaced coal and steel workers back to work. It can increase your property value, too. And, depending on how many buildings are involved, it can give a noticeable boost to the local economy.

So why aren’t more people switching already?

Once solar panels are assembled and installed, they cost nothing. Buying and installing solar panels is not cheap. Companies are coming up with creative financing options to help more people find out whether solar energy is for them.

A Solar Power Purchase Agreement (SPPA) allows an investor company to own solar panels they store on their customers’ property. A city or town, such as Pendleton, Oregon, may be the “solar service provider.” Customers then pay the company for the electricity they use, while the company retains ownership of the panels, collects the tax benefits, and, if necessary, reclaims and relocates the panels. Benefits to the customer can include a positive cash flow “from day one” with little or no initial investment.

A solar lease allows customers to pay a fixed monthly fee for the use of electricity from solar panels stored on their property. The company that installs the panels retains ownership of the panels. The fee offers a substantial reduction in monthly energy cost, so many homeowners in places where solar leases have been offered, like California, have chosen solar leases.

Conclusion

Solar energy technology has reached the point where it’s safe and affordable for your home or business to switch to solar. If you can’t afford to buy and install solar panels, you may be able to save money with a Solar PPA or solar lease.

SOURCES

Semiconductors: NASA Science News, https://science.nasa.gov/science-news/science-at-nasa/2002/solarcells/

“Solar ROI”: https://www.svssolutions.com/testimonials/before-and-after

Bennett, Rachel. “Can I Really Save Money by Putting Solar Panels on My Roof?” https://www.nerdwallet.com/blog/finance/save-money-putting-solar-panels-roof/

“Buy low and sell high”: https://www.solarcity.com/residential/lower-electricity-bill-with-solar

Buffalo, New York: Schlager, Eric, in Buffalo News, https://www.buffalonews.com/business/can-you-afford-to-eliminate-your-electric-bill-with-solar-energy-20140830

Rotman, David. “Paying for Solar Power.” https://www.technologyreview.com/review/540226/paying-for-solar-power/

New Mexico: https://energy.gov/savings/search?f%5B0%5D=im_field_rebate_state%3A860096

Pendleton, Oregon: https://www.epa.gov/greenpower/buygp/solarpower.htm

California homeowners choose solar lease: https://www.sunrun.com/solar-lease

Morguefile’s Charlesa46741 illustrates how to go solar with zero risk to the roof ( www.morguefile.com/archive/display/982278 ) (I want this):

solar final



13 thoughts on “Can Solar Energy Save You Money?”

  1. Living in the North, some days we are lucky to see the sun. It would be great in the summer. Winter months not so much. I am for saving money. If I owned my own place and could afford it, I would add solar panels.

      1. Yep, if I ever get to the point where I can choose. I do want to set things up where I can be on or off the grid. Basically as a backup. I would love to test things out and see exactly how many of the solar panels an average household would need in a colder climate where the sun is not out every day and on days that the sun is not as hot.

    1. Thank you for reading and commenting, @damianpaniki .

      (On Live Journal, thanking every commenter for every comment may seem strange or sarcastic. Here, replying is the way we register the comment so that everyone gets points toward payout…and often thanking people seems the most appropriate way to reply.)

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