If you’re thinking about switching to solar energy, now’s the time.
Prices have never been lower, and in some areas, PV systems can now
produce electricity at a cost that’s competitive with — or even lower
than — conventional electricity from coal, nuclear or natural gas.
That’s right — the day we’ve all been waiting for has finally
arrived. The cost of solar energy rivals electricity produced by much
less environmentally friendly sources. What’s more, the cost of solar
power will continue to fall while the price of conventional fuels
spirals upward.
The cost of a residential solar power system has
dropped about 40 percent in just the last two years. As a result, the
lifetime cost of solar electricity produced by these systems now
competes with conventional electrical power plants. In places where
electricity sells for a premium, it’s competitive even without
subsidies. In New Jersey, for instance, conventional electricity costs
about 17 cents per kilowatt-hour (kwh). A residential solar power system
can produce electricity at or slightly lower than that price, without
any incentives.
Families in many major cities are paying 10 to 12
cents per kwh for conventional power, and soon, many in the Midwest will
pay up to 15 cents/kwh for conventional power. Meanwhile, in the
Midwest, the unsubsidized cost of solar power is about 13.7 cents/kwh, and a 30 percent federal tax credit drives that cost down to 9.6 cents/kwh.
Rebates
that are available from some utilities lower the price even more. In
St. Louis, Ameren offers a $2 per watt rebate based on installed
capacity. A 5 kilowatt system would receive a $10,000 rebate as soon as
the system is up and running. This incentive drives the cost of solar
energy down even further — to 7.1 cents/kwh. That’s much cheaper than
conventional power. In addition, the cost of solar electricity will
remain the same for the life of the system — at least 30 years, maybe
longer. This provides a tremendous hedge against inflation.
Ameren and other U.S. utilities also are currently buying renewable
energy credits from their customers, which help utilities meet
state-mandated goals for renewable energy production. Ameren pays $50
for every 1,000 kwh of electricity a solar electric system will produce
for 10 years, regardless of the amount of power consumed by the system
owner. For instance, if a system is projected to generate 40,000 kwh in
the first 10 years of operation, Ameren will pay the homeowner a
one-time payment of $2,000. That lowers the lifetime cost of solar
electricity to 4.3 cents/kwh.
Businesses throughout the country receive even more financial
incentives. They can apply accelerated depreciation to solar power
systems, which lowers the cost of solar energy by 15 to 30 percent,
depending on the company’s tax bracket. Rural businesses can receive a
25 percent grant from the U.S. Department of Agriculture. It may
actually be possible for some businesses to install a large solar power
system at virtually no cost!
The challenge of most renewable
energy systems is that you have to spend money now to save money over
time. If you don’t have the funds to purchase a solar electric system
upfront, you can consider financing one, or look into leasing options.
Some companies will install a system on your home at their expense, then
sell electricity to you at a rate that’s the same or lower than you’re
currently paying.
Solar
electricity and other forms of renewable energy are desperately needed
to combat costly climate change and other serious environmental
problems. They’ve always been good for the environment — now they’re
great for the wallet!
CCRES special thanks to Dan Chiras
Croatian Center of Renewable Energy sources (CCRES)