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6 8 KIPLINGER S I OCTOBER 2OO7

HOME Its cheaperto install a systemand you can evensell back to the grid.By Robert Prick

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finally pays off

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KIPLINGER S I OCTOBER 2007

WEB RESOURCES

D A N M U L L I N S electric meter is turningT H E backward, and it gives him immense satis-faction. On a sunny day in his Washington,

S U E D.C., neighborhood, the solar panels., perched on his root catch enough rays topower his home and sell electricity back tothe utility. A solar-powered fountain burbles in his garden,near the tubes for his solar-powered hot-water heater. "Thereis no easier way to make money than to sit out here and enjoythe sunsh ine," he says.

Promoting a cleaner environment antlknowing tha t the power he generatestravels back through the electric grid tohis neighbors adds to MuUin's satisfac-tion. You might expect such altruismfrom someone who works for the BoyScouts of America-hes an executive inthe Learning for Life divisionbut thebottom line is, solar energy saves himmoney. Mullin has cut his electricitybill by two-thirds, and when those sav-ings cover the $10,000 up-front cost forhis system in ten or 12 years, his solarelectricity will be free.

Depending on where you live, solar-power systems (also called photovoltaic,or PV, systems) could pay off for you,too. Says Noah Kaye, of the Solar Ener-gy Industries Association: "Surveysshow that most Americans would bevery interested in having a solar system,but most don t realize solar can power ahouse economically."

Another thing most people don'trealize is rhat the economics of solar donot depend solely on how many hoursthe sun shines where you live. The realkey to making a PV system pay off iswhether your state offers a hefty fmancial incentive (morethan half the U.S. population is covered by such subsidies).Fat subsidies are why New Jersey not a Sunbelt statehas the second-largest number of home PV systems in theU.S., after California. At the moment, 17 states offer rebates,according to the North Carolina Solar Center (you can checkthe Solar Center's database at www.dsireusa.org to see whatincentives are available in your state).SUNSHINE ECONOMICS

i-L -w B I G V A R I A D L E S d i c t a t e w h e t h e r a h o m e P Vsystem makes economic sense. But in rough terms,here's how the numbers break down in states with thebest incentives: The average solar-power system is 4 kilowatts.(Think of kilowatts as the si:^e of the system. The power it

Solar TOOL KIT

T here's an abundance ofresources to help you addsolar power to your home.Here's what you need to get started.A simple, soup-to-nuts pr imer

on PV systems: www.nrel.qov/docs/fVO4ost i /35297.pdf

The money your state providesto help cover system costs, plusother payments and incent ives:www.dsireusa.orq

Get federal tax credits of up to$2,0 00 for install ing a qualified PVenergy system or solar water heaterthis year or next: www.enerqytaxincentives.orq/consumers

A calculator to f igure ou t yourcosts and savings from a PV system:www.clean-power.com/sharp

generates depends on size, efficiency and sunlight.) Figurethe price, including installation, is $10,000 per kilowatt, the total comes to $40,()()(). Through various rebates, credand tax breaks, some states pay half that cost. The federalgovernment will also chip in 30% of the cost, up to $2,00liiken together, those subsidies drop the total to $18,00 0.Manufacturers say that solar panels will last 25 to 30 yearsand they guarantee them for 20 years. Assuming a 2(}-yearlife span, that averages out to a cost of $75 per month.

Assuming those generous state subdies, you'll get your initial investmenback in ten to 15 years, including fi-nancing costs. The environmental benfit: 3 fewer tons of carbon dioxidegenerated every year.Second to state subsidies in compu

ing home solar economics are utilityrates, followed by the hours of dailysunshine. How much do rates trumpsunshine]'' Consider tha t a Boston PVsystem saves about the same amount uone in Albuquerque, even though NeMexico's sunny skies generate 25%more power, says Kaye.Selling power back to a utility cutscosts as well. Forty-two states and theDistrict of Columbia have laws thatrequire utilities to buy power fromindividuals. With such so-called net-metering arrangements, a utility muscredit you at the retail ratethe rateyou pay for powerwhen you sendelectricity to the grid. In effect, net mtering makes utilities into power banit you feed more power in than you taout in a given m onth, you store upcredits for future use.You can even get cash from the utity. Some states require utilit ies to pay once a year for any e

cess power your system generates, although at the wholesarate. So, for example, you may buy power at 9 cents per kiwatt-hour but sell it for only 2 cents per kilowatt-hour.Other states let you become your own power broker in adition to net metering. In New Jersey, for example, utilitiemust invest in solar power, and the state has created a market for privately generated solar electricity. A certificate isissued for every 1,000 kilowatt-hours generated, and utilitbuy them for between $150 and $265 each.Of course, solar-power systems vary somewhat in qualitand cost, and the panels vary dramatically in appearance.Fat solar panels with visible rows of circles are still an op-tion. Svelte, monolithic panels in blue or black are on themarket, although you'll pay a slight premium (up to 10%

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for them. For each kilowatt of power you want to generate,figure you'll need 80 square feet of panel. "Thin fiim" pan-els, which are barely thicker than the shingles they cover, areunobtrusive, but you'll need twice the square footage to gen-erate the same amount of energy as traditional solar cells.But not everyone wants unobtrusive panels. Tony Clifford,president of Maryland-based Standard Solar, says that al-thdLigh mou ot his clients prefer sleek and subtle panels laidllai on L root, some don 't mind ma king a s tatem ent wi th(.ircle-ladt-n panels propped up to catch the sun at the perfect.mgle. "Beauty is in the eye of the beholder," he says.FUTURE BENEFITS

ASIDE FROM SAVING on his Utility bill and bank-ing good environmental karma, D.C. resident DanMiillin says he enjoys another benefit of his PV sys-

rem: insurance against rising energy prices. That 's a big in-centive driving PV sales, say installers. And keeping a lidtin rising energy costs is also a major motivator for states tosubsidize commercial, retail and home PV systems.

Count on more stares to start or increase subsidy pro-rams. By fostering home solar systems, states decentralize

power production. That reduces the cost of expensive gridsneeded to transport power. Also, clean, renewable powersaves envircjnm ental costs by lim itin g fossil-fuel use.

Solar-power experts are quick to point out that traditionalpower is subsidized, too. Of the $12 bill ion the federal

ent to traditional energy sources. Says Joe Sc hwartz , exe-of Home Power magazine: "We don't l ive in a

ree market. Sure, incentives drive the market, but incentivesor renewable energy are simply evening out the market."

As the price of generating conventional power has risen,he costs associated with solar power have fallen dramatically.1980s, and system prices may drop 5% per year for at leasthe next few years. The crossover pointwhen falling PV-ithout subsidies^is less than a decade away, say experts.

Fot now, though, cutting the up-front investment is the

Woolf, director

Of course, solar power isn't all about economics. Standard

do the right thin g." K

P RO J E CTS

SMALL SCALE solarN ot quite ready to add solar panels to your roofbut still want to catch some rays? You have otheralternat ives to make the sun pay you.Solar water -heat lnq systems. Dark-panel collector box-es, from 40 to 80 square feet, trap solar heat and preheatcold water. The heated water then flows either to your exist-ing hot-water tank or to a special tank. Such a system incloudy Seatt le wil l provide less than 5 0 % of the energyneeded to heat hot water for a typical household. But insunny Phoenix, the yield is 80% . System prices range fro m$2,0 00 to $8 ,00 0. Figure a six- to ten-year payback p eriodon a $4,00 0 system. (The federal government wil l pick up3 0 % of the bill, up to $2,000.)Solar-powered at t ic fans. Lowering your at t ic 's tem-perature on a hot summer day can dramatically reduce th eload on your air conditioner. A solar-powered fan costsabout $500 installed and can pay for itself in as few as twoto three summers.

' A separate solar system provides Oan Mullin w ith hot water.

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