The Economics of Solar

Jan. 2009 - We are no longer a handful of experienced installers and environmental idealists...new installers, financiers, engineers, students, consultants, manufacturers, salesmen and politicians jump onto the "Green Bandwagon" every day. The overwhelming response and industry growth has made one thing very clear: the attractiveness of solar is now in the numbers.

Here at SunPower, where we have been designing and installing solar energy systems since 1972, we couldn't be happier!

Above: SunPower's solar office is powered by the PV poles pictured here!

A solar system is a long-term investment in renewable energy at a kiloWatt rate that will never increase. When considering utility rate inflation and other rising energy costs, the payback period on your system can be significantly reduced. Not only will solar save you money, it will reduce your impact on the environment by producing clean, green energy!

SunPower Builders understands the considerable investment that a solar system represents. We are available to provide information, submit applications and connect you to the necessary resources to finance your installation.

While we are not CPAs, lawyers, wordsmiths or financial advisors, we have detailed several of the financial incentives for going solar below. They are intended as informational guidelines from the solar industry and do not replace an analysis by your financial or tax professional - each situation is unique!

Above: A SunPower Solar Barn in Newtown, PA

1. Federal Tax Credits

The Federal Government’s Residential Renewable Energy Tax Credit and Business Energy Tax Credit offer up to a 30% tax credit for solar installations. For businesses and residences the tax credit is 30% of installation cost and is uncapped.

2. Pennsylvania Sunshine Rebate Program

In July, Pennsylvania passed the Alternative Energy Investment Act, a law that will provide $100 million for solar photovoltaic systems and solar water heating systems for homes and small businesses. Like many other states, this $100 million will be distributed through a rebate program on a $$/Watt installed basis. While the dollar amount has not yet been specified, legislators and industry professionals estimate the rebate at approximately 30% of installation cost. This program will be managed by the PA Department of Environmental Protection (DEP), which is now working to design the new program and place applications online.

Kira Costanza of SunPower participates regularly in the state's Solar Working Group meetings and is in regular contact with legislators and industry professionals to assure the most up-to-date information for our clients.

Above: Part of a 19.2kW PV array in Bucks County, PA.

3. Net Metering – For PV Installations

SunPower will work with your utility company to set up a net-metering program. Net metering is when the solar power produced by your system exceeds what your home is using, and the excess electric power flows into the utility power grid. At the end of each month, the utility subtracts the solar power produced from the total power used.

4. Solar Renewable Energy Credits (SRECs)

An SREC market is emerging in Pennsylvania. The state is now requires electricity suppliers to provide a percentage of their electricity sales from solar generation through Renewable Portfolio Standards (RPS.) This means they have to construct large solar arrays to provide sustainable electricity or (more likely) they will purchase this power from other suppliers. If you own solar photovoltaics, you produce SRECs, which can be sold on the open market like any commodity. SunPower can help you to sell and/or trade your SRECs, generating more savings with solar!

In addition, we are all looking to President Obama for the future of the Solar REC market...it is possible that he will raise the National RPS, providing more incentive opportunities and a huge boost for the solar industry.

5. Financing Programs

SunPower Builders is an approved contractor for PA's special financing programs for solar installations and other energy-efficient home improvements. Keystone HELP, Solar Lending Now, the Sustainable Energy Fund and others offer varying loan amounts and terms. Please contact us for more information about these programs.

Above: A roof-mounted installation on a S.E. PA residence.

6. Consider This: Utility Rate Inflation and Deregulation

Energy costs are increasing. Due to the "uncapping" of electricity rates by PA in 2010-2011, for the first time electricity consumers will pay real market costs for generating electricity- an increase of at least 30% of generated cost. The costs to fuel our vehicles and heat our homes, schools and businesses are projected to increase as well. "Business as usual" is an increasingly expensive option and investments in solar are even more attractive.

Deregulations has already started in Western PA. According to the Susquehanna Economic Development Association (SEDA), Allegheny Power customers' bills could rise by 63 percent when its rate caps expire late in 2010!

Please be in touch with us to discuss the economics of solar at your home or business.