As a popular method to go green, solar panels offer the homeowner more than a reduced carbon footprint, but a sense of independence from utility barons. However, it is important to take your energy requirements and budget into account or risk getting carried away in the project.
For many homeowners, the price is simply too great. In 2005, the average price per watt of solar panel –produced electricity ranged from $3 to $4, with an installation cost ranging from $15,000 to $20,000 per kilowatt. This high price can be attributed to the precise manufacturing process and semiconductor cost. Even though this barrier may seem difficult to surmount, the solar panels cost is continually dropping thanks to manufacturing improvements and economies of scale.
The solar panels cost may vary, but the vast majority of the cost originates in the solar panels themselves, around 70%, followed by labor, inverter, and batter y costs. It is often less expensive to install the units at the time of construction and doing so can lessen the financial shock of the project. The inverter is the second piece of the system, converting the DC power produced by the panels into AC for appliances and lighting. Also, depending on the system (off-grid or grid-tied) the owner will have to invest in a battery bank to store the excess power.
However, the solar panels cost is often offset by rebates, tax credits/exemptions, etc. In fact, the federal government offered a 30% tax credit on solar panels installed between 2006 and 2007. The benefits also operate on the state level; some states with incentive programs include Arizona, California, and Massachusetts.
Arizona offers a rebate for grid-connected systems at $4 per watt up to a maximum of $7,000. For off-grid panels, the rebate is only $2 per watt at the same maximum limit. In the state of California, the incentives can vary depending upon utility company and location, but some have offered benefits of $3.50 per watt up to a maximum of $8,000. Incentives in Massachusetts tend to operate at the state level, but include local property tax exemptions and state income tax credits. In addition, any solar, heat pump, and wind system is exempt from sales tax.
