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Solarizing Can Pay Off in More Ways than One
Converting your home’s power source to solar reduces your contribution to global warming — and because electricity is generated from coal, it also reduces dependence on fossil fuels.
But it's also a shrewd investment. The paybacks come not only in the form of lower utility bills, but also via cash rebates, tax incentives and higher real estate values. And you may see your full financial return on investment in as little as eight years, depending on which state you live in.
Rebates Can Slash Initial Cost
State-sponsored rebate programs can significantly mitigate your initial cost outlay for a solar electric system. The California Energy Commission offers cash rebates of up to $2,800 per kilowatt of system capacity. In Colorado, the rebate is even better: $4,500 per kilowatt — roughly half the approximate $25,000 to $27,000 cost of a 3 kilowatt system. Some solar-electric system providers will front you the rebate so your initial investment is substantially reduced with no waiting.
Other states including Alaska, Arizona, Colorado, Connecticut, New York, New Jersey, Pennsylvania, Oregon and Washington also have tax incentives and cash rebate programs. (For a full list of incentive programs, visit www.dsireusa.org.)
Rising Energy Prices Shorten Payback Time
Solar-home owner Jackie Holmes says she and her husband Richard now expect to save more than they expected on their 5.9-kilowatt Gaiam Real Goods solar electric system at their home in Occidental, Calif. She says they went solar to lower their electric bills and reduce their dependence on fossil fuels — but knew that with energy prices rising every year, that payoff would grow.
"The cost of energy is never going to go down again," says Jackie. "So it makes sense to go solar."
Home Value Gets a Boost from Solar
Although it’s not necessarily factored into the payback equation, rising real estate values also boost your return on investment. According to the National Appraisers Association, for every $1 of annual energy savings, the value of a home increases $20. So homeowners who save $1,000 a year in electricity costs could see their home’s value jump $20,000.
Read about other homeowners who have gone solar in Green Living: Stories of Change
Watch our video Solar: What's In It For You? 3 Ways You Win
Discuss this topic in Solar Payback Is 8+ Years. Would You Still Do It?