| With a new U.S. president and a new outlook on | | | | taxes for one year and you determined that you paid |
| renewable energy, many people are looking at solar | | | | $10,000 in taxes for the year from your paycheck. If |
| energy as an option for powering their home. Many | | | | you bought a $15,000 PV system and took the 30% |
| people are attracted to the energy savings and good | | | | credit, .3 x $15,000 = $4,500. You would receive a |
| feelings of solar, also called photovoltaic or PV energy. | | | | refund check for $4,500 from the IRS, on top of any |
| In this article we will discuss the financial aspects of | | | | other refunds you may have coming. You could |
| designing a system for your home. | | | | receive up to the $10,000 you paid in taxes for your |
| The Power Bill | | | | solar power system, meaning you would pay no tax |
| Before you determine what size system you want, | | | | and have cheap, clean energy. And many states have |
| you should take a look to see how much you're using | | | | state tax incentives as well. Check out Dsireusa.org |
| (we also suggest you conduct a full energy audit to | | | | for more information on tax incentives. |
| reduce energy waste in your home). To get started, | | | | Solar Power Example Calculation |
| take a look at your utility bill. You will notice it tells you | | | | Here's an example budget calculation for a typical |
| variety of things, the most important being how many | | | | home. Lets say you look at your power bill and you |
| kilowatt-hours (kw-hrs) you used last month. It may | | | | are using 500 kw-hrs per month, or about 6000 kw-hrs |
| also tell you how much you used in the last 12 months, | | | | per year, and your power costs $.10/kw-hr. Now we |
| how much you used a year ago, and how much you | | | | have to make an assumption about the size of the |
| used this year to date. It should also tell you how much | | | | system. We'll start with a simple 2000 watt PV |
| you are paying per kw-hr, it is usually in the range of | | | | system to get started. At approximately $10/Watt |
| $.08-$.12/kw-hr. This information will be used later in our | | | | installed, this system would cost about $20,000 without |
| calculation. | | | | incentives. However you determine that your utility has |
| The Power Company | | | | a $3/watt rebate. So, $3/watt x 2000 watts = $6000. |
| Next, make a call to the power company for some | | | | Then you have the federal tax incentive of 30%, .3 x |
| information. Ask if they offer any rebates or incentives | | | | $20,000 = $6,000. So you are actually paying $20,000 - |
| for grid-tied PV power systems installed in their | | | | $6,000 -$6,000 = $8,000 for your system. |
| service area. This means that the system will be tied | | | | Using the solar calculator tools on sites like or |
| into their grid and they will buy any excess power your | | | | Findsolar.com, you determine that a 2000 watt system, |
| system generates. In some areas of the country, the | | | | based on where you live and how you install the |
| utility will pay for half of your equipment and installation. | | | | system, will generate 5,000 kw-hrs per year. At $.10 |
| Some utilities and municipalities also have financing | | | | kw-hr, you are saving 5,000 kw-hrs/yr x $.10/kw-hr = |
| options to help homeowners. The website Dsireusa.org | | | | $500 per year by generating power with the PV array. |
| can help you find out more about incentives in your | | | | If you divide $8,000 by the $500 savings, you can see |
| area. | | | | that your system will pay for itself after 16 years. This |
| The Tax Man | | | | is good because most systems will last at least 30 |
| The federal government has a 30% tax credit for | | | | years. |
| residential solar power systems. This credit has no | | | | For more information on Solar Power and Solar |
| cap. For example, lets say you were calculating your | | | | Panels, check out our website. |