July 3, 2008

Is solar power financially practical?

I've looked at solar power before to see if it might be practical to install solar panels at my own home and have it provide some of my homes electricity. There is a website Find Solar that has information on home solar installations. From that site they have a 'My Solar Estimator' calculator that will help you estimate the cost of a solar system including the tax benefits and rebates for your location. It will also figure how much you save per month in electric utility costs.

I used the calculator myself and found that to replace 50% of my electricity usage that I'd need to get a solar system costing $X after credits. Financing that long term would cost about $X per month and it should save me about $75 per month.

However if I were to scale back to a 10% system it would cost about $17000 total and after credits I'd only pay about $7500. I could finance that for $50 a month and save $15 a month on electricity. However over the years the electricity savings would increase and probably get up to the $20-40 range per month. If you also figure that the solar system would add value to the house then this kind of installation is almost practical.

If you live in a very sunny location then solar might be a better option.

But overall I don't think that solar is a good financial choice right now. Mainly since there are better ways to spend money to save on energy.

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