Solar Electric Panels vs. Solar Hot Water Heaters:

Shouldn’t the first thing that you figure out when you want to save money on utilities be learning what is going to give you the most bang for your buck?  Wouldn’t everyone be more informed if they just knew how much money they were going to save with each option and then what the pricing was going to cost them?  There are several key differences between solar electric systems and solar hot water systems, and the goal here is to teach everyone the information you need to know and understand to make an informed financial decision.

Solar Electric Panel Systems:

Solar electric systems (aka PV Solar) is almost everytime going to cost at least 10x more than a solar water heater.  The reason is that the actual end product of this system is electricity.  It is more expensive to make electricity compared to hot water. Also, the physical number of solar panels needed to make electricity is much more compared to the number needed to make hot water for the common home.  But, don’t be scared off from solar electric so quickly.

Positives of Solar Electric Systems:

1. Many solar rebates and tax incentives are normally available
2. They last a very long time (usually over 25 years for solar panels)
3. They replace ever increasing costs for electricity
4. They add value to your home
5. They are property tax exempt
6. They do not require any maintenance

Negatives for Solar Electric Systems:

1. Expensive
2. More planning is usually needed to install the systems
3. Labor costs for the installation are usually higher
4. Sometimes you might need to install a newer roof before installing(if your old roof is beat up)

Solar Hot Water Systems:

The solar hot water system is a great economical purchase for almost any house.  It is a shame that it is not mandatory for almost everyone.  The cost of heating water is always going up all over the country, and a solar hot water can virtually eliminate that need, which in turn will save you quite a bit of money.

Positives of Solar Hot Water:

1. Cheap to install and get running
2. Some tax incentives and rebates are available for Solar Hot Water
3. Can decrease your heating bill considerably throughout the year
4. Does not take up very much roof space, usually one or two solar panels

Negatives of Solar Hot Water:

1. The lifespan of a solar hot water heater is usually between 5-8 years
2. Some counties require a specialized installer and plumbing to be re-worked

Summary:

Both of the options are great options.  You can see for yourself what makes the most sense between solar hot water systems or solar electric.  Either way you look at it, they both are an investment which will help you and your family live a more sustainable lifestyle moving forward.

What Are Renewable Energy Credits(REC’s)?

Many local and national governments around the world have setup a program to help monitor and encourage renewable energy production.  As this is a very big task and goal, there has also been the development of a tracking system to help understand exactly how much renewable energy is being produced.  A “Renewable Energy Credit” in most places is considered one megawatt or 1MW of electricity.  This is also equal to 1000 kw hours of electricity.  If you are producing 10,000 kilo watt hour of electricity each year with your solar panels, you would then earn 10 Renewable Energy Credits or REC’s.

What Are Some Other Names for Renewable Energy Credits?

• Green Credits
• Solar Energy Credits or Certificates
• Wind Power Generator Credits
• REC’s

How Are REC’s Used and What is The Value?

Believe it or not, but REC’s have a definite monetary value.  Although the program that is being developed in the United States is still being figured out, many renewable energy producers are finding the REC’s to be very valuable in re-couping the costs of the systems they have running.

For example, a particular state might make a law that every utility company within the states needs to produce at least 10% of their electricity from renewable energy sources(solar,wind,thermal,hydro etc…)  If the actual utility company only produces 5% of their energy from renewable means, that would mean they are short 5%.  In order for the utility company to make up for this Renewable Energy Credit difference, they would need to purchase REC’s (which are certificates) from anyone who is producing electricity this way.  So you can see how the renewable energy credits can really become valuable.

Currently, the actual dollar value of the REC’s is always in a state of fluctuation.  There are also geographic differences in the value of the credits.  For example, a REC’s in the state of Alaska might only be worth $300.  The exact same renewable energy credit in the state of Illinois might be worth over $500.  The reality is that there are many different companies which are sprouting up which will purchase your REC’s and they are called REC aggregators.  They primarily work with small scale solar producers and wind producers.  Once these energy credit aggregators purchase a large amount of REC’s, they will eventually sell them to someone like a utility company and earn a slight profit.  The utility companies tend not to work directly with homeowners and small scale energy producers.

Eligible Renewable Projects for Illinois State Funds:

The state of Illinois developed a Renewable Energy Resource Program to help several different types of projects come to life:

• Photovoltaic Solar Panel Systems
• Solar Hot Water Systems
• Solar Space Heating Systems
• Wind Systems
• Solar Pool Heating Systems

Illinois State Incentive Amounts (In Dollars and Percentages of Project Costs)

• All residential and commercial projects were eligible for funding up to 30% of the project costs.

• All non-profit and public projects were eligible at 50% of the total project costs.

• The MAXIMUM solar rebate or wind power rebate for any of these projects has a maximum of $50,000

• The minimum size of a solar panel system had to be at least 1KWH which is an incredibly small system

Major benefits of this Generous IL State Rebate for Solar:

The Illinois solar rebate program has allowed many homeowners who were interested in solar energy to actually make it a reality.  Although the funding has since dried up for this program, it helped to pay for a large part of many system owners up and running solar panels.  Another huge benefit with regards to this particular state level incentive program is that the Renewable Energy Credits(REC’s) are still owned by the energy producer which in many cases is the small business owner or homeowner.  This is considerable because the value of the REC’s will likely be increasing over time and further allow the owner of the system to help finance or pay for the up and running system.

Current Status of the Illinois Solar Rebate Program:

At the moment(December 2010), all of the funding for this incentive program has been used up or is already claimed.  Once the funding comes back for more systems, there should be an increase in the number of applications from solar system owners which can be accepted once again.

Nevada Energy, on of the largest utility companies in the state is now offering a great renewable energy incentive to homeowners who want to make a slight modification to how they heat up their water.

Solar Hot Water Details:

For Nevada Energy customers who want to purchase a solar hot water heater, NV Energy will cover 50% of the cost of the heater up to $1500.  This is a massive incentive, and since heating up water is becoming more and more expensive, it is something that everyone should jump on right away.  This particular incentive is limited in the amount of incentives.  There is scheduled just 200 or 300 incentives which will be handed out on a first come first served basis for the new few months.  There is only one condition regarding this incentive, and that is for the homeowner to surrender the renewable energy credits directly to the utility company.  That is not a big deal because the homeowners don’t want to hassle with trying to sell the REC’s anyways.

Costs to Installer Solar Hot Water Heaters:

The typical costs out the door to install a new solar hot water heater is roughly $2,250.  This is assuming you are using a licensed and bonded electrician who has experience with installing these types of systems.  If you are going for the cheapest equipment and cheapest labor, yes, you will be able to find something for much less, but it just isn’t worth it.  Also, please do not try to install a system like this on your own unless you are certified and have experience.  It is actually very dangerous and many people who attempt this burn themselves badly.

As part of the service, most installers of solar hot water systems in Nevada will process all of the required paperwork as part of the service.  This makes the whole process of securing your rebate much easier.

Regulations For Solar Panel Systems And Property Tax Laws:

• The individual states make the rules regarding property taxes with regard to solar electric systems
• Speak with the local county or city controller for exact details regarding how property taxes are handled
• Most places in the United States do not include solar electric systems when calculating local property taxes
• Photovoltaic solar systems along with solar thermal and solar hot water systems are generally included as property tax exempt
• The full value of the renewable energy solar system is what is exempt in most of the United States

Why Is It Important to Have Solar Property Tax Exempt?:

Having a solar energy system exempt from property taxes is often the deciding factor in purchasing a system or not.  Take for example an average house in the country that is worth about $200,000.  If the local property tax is 1% or about $2,000 per year, that can change dramatically if solar systems were not property tax exempt.

Take for example the exact same house that has a solar system with a value of $40,000.  That would make that exact same house valued now at $240,000.  And the same 1% annual property tax on the solar powered house would now come to $2,400 per year.  That is a $400 increase which is considerable and a 20% increase in property taxes.  If the solar system is creating $2,000 in electricity each year, that totally changes the ball game.  This is one of the major reasons that it is a great benefit to have solar panels exempt from property taxes forever.  Let us all be very thankful that the local governments and state elected officials understood this from the beginning.  It is important as well for local businesses who have solar panels to make use of the property tax exemption, as it affects them also.  If solar energy systems were not expensive, this would be pretty much a non-issue, but we all know that is not the case, so maintaining an exempt status for solar is going to be key to continue solar’s success as a renewable energy source.

News about The Renewable Energy Grant and Tax Credit:

Right now, there are only a few days left for businesses to take advantage of the renewable energy tax credit that the United States Department of the Treasury initiated several years ago.  The reason for the limited amount of remaining time is because projects that are eligible for this grant must have construction begin no later than December 31, 2010.

This grant or tax credit was introduced as part of The American Recovery and Reinvestment Act of 2009.  What made this grant to exciting was the ability of the company who was purchasing the solar panel system to either take the 30% tax credit, or to take an actual grant dollar amount equal to 30% of the project cost directly from the Treasury department in the form of a check.  You can imagine what nearly every company has opted to do so far.  Especially the companies who did not have a very large tax liability.

Requirements and Exceptions for the Solar Grant:

There were some exceptions to allowed solar power systems that could take advantage of this HUGE TAX CREDIT for SOLAR:

• passive solar systems are not eligible
• pool solar systems are also not eligible

One of the other requirements for this federal solar incentive was that all businesses or organizations who were looking to take advantage of the credits or grants had to be tax paying companies or entities in order to be eligible.  This only makes sense, it would be a big shame if non tax paying groups were somehow through a loophole able to take advantage of this at the taxpayers expense.

As far as claiming the solar grant money from the department of the treasury, the formal applications for this grant must be sent to the Treasury Department no later than October 1, 2011.  The treasury has claimed that it will be able to process all payments due within about 60 days of receiving the fully completed applications.

What Does This Mean in Solar Savings?

This is huge, and in terms of a solar panel project actually making financial sense to a business, this is the deal breaker needed to make more solar renewable energy a reality.  A 30% grant on a solar panel project is basically equal to a one third off financial incentive.  In terms of a payback period, this can easily slash the payback period in half.  For many large and small businesses, this is exactly what was needed to finally be able to look investors and owners of businesses in the eye and sign the purchase for solar panel systems.

What is the Future of Government Solar Grants Looking Like?

Nobody knows for sure what is going to happen at this point.  Currently there is quite a bit of talk among solar energy companies that the renewable energy grant is going to continue for many years to come because not as many projects were started as the government originally thought.  We will all have to wait and see about that, but in the meantime, if you are interested in looking into a solar project for your business, you should contact a local solar company and at least get the ball moving in the right direction so you will be ready to move when the time is right.

What You Will Need For a Home Solar Electric System:

Buying your very first home solar electric system is definitely a bit of an intimidating task, especially if you are not very electrically inclined.  But don’t fear this, its not rocket science either.  And the fact of the matter is, after you have a system up and running, you will honestly know more than most of the electricians of the world about solar power.

175 watt Solar Panels

You are going to need some basic solar equipment:

• solar panels
• inverter
• disconnect switch (so you can turn it off is you need to work on your electrical system in your house)
• wires to connect everything
• some permits and permission from the utility company to connect your system
• a licensed electrician or solar installer to put together the system to meet code (if required by your utility company)

What You Don’t Need:

• expensive solar panels that cost twice as much as other panels
• dual inverters (one inverter is sufficient for nearly every home installation)
• battery back ups (this is great, but very very expensive and not necessary, buy a gas generator instead and save thousands)
• extra solar panels (you should have a 25 year warranty on the solar panels so no need to buy spare ones)

What You Should Look Out For:

• make sure your solar panels come with a full manufacturers warranty that lasts at least 25 years which is the industry standard
• make sure you have at least a 10 year warranty on your inverter which is also the solar industry standard
• make sure if you use a solar installer they are licensed and bonded and have several references
• make sure to have no shading on the area that is going to hold the solar panels (shade is the worst enemy here)
• make sure to re-roof your house if you have an old roof (the solar panels can last for over 30 years and need a good foundation)

How You Can Save Money on Solar:

• pull the local permits yourself
• buy directly from a wholesaler instead of a local installer and just pay for the installer to install the system
• finance the cost of the solar panels through a finance company
• make sure to apply for the federal solar energy tax credit
• talk to your local utility company about local regulations and potential new or old solar electricity incentives that exist
• ask any friends who also have solar systems what they paid for them and be sure to get multiple bids before deciding on anything
• make sure to be clear as to any future maintenance costs as this might be a large number if you are not careful

Make Solar Energy and Get Paid While Doing It:

Imagine getting paid to make electricity.  Then imagine that the person paying you is your electric company.  Now imagine that happening everyday of your life, and happening even more during the sumer months when the sun is shining all day long on your roof and the solar panels that now sit there.

Feed In Tarrifs and Net-Metering:

As the technology behind solar panel electric systems had evolved and become more sophisticated over the years, nearly every single system that is installed on a home is completely ready to feed un-used electricity back into the electric company’s network.  For this excess electricity that the homeowner produces, the meter usually spins backwards.  For some systems, there is a separate meter which reads and documents how much extra electricity goes back to the utility company.  Whatever the case is, the homeowner earns money from giving the solar energy to the electric utility to use.  This is great news.  And this is what also makes solar energy a great idea for the longterm.

Getting a Check From the Electric Company for This Electricity You Sell:

The actual idea of the energy company you use sending a check in the mail for this excess power is not actually the reality of how things work.  What is more likely to happen is the homeowner will make extra power during the daytime and use up that power at night when there is no sunlight.  There are cases though when the homeowner will produce more electricity on a given month than is needed for that same time period.  If that is the case, the excess solar energy from the panels will most likely be put as a credit towards the next months electric bill.  Things are not up to speed yet to be sending checks out to electric providers, but for sure that day is coming soon.

Best Practices with Solar Panels and Excess Electricity Production:

What every person should try to do during the first phase of owning a solar system is optimize the solar panels.  By this, I mean to have a solar electric system that has the correct number of panels to produce a bit less than what is used in the house. Having an electric bill of five or twenty dollars a month instead of hundreds is still a pretty good thing right? Especially if you are not going to be receiving hard cash for excess power you provide right now.  There is no need to have more solar panels that are going to earn you a credit.  The financial reason is that the return on this larger investment from extra solar panels is worse than many other types of investments you could get involved with.  There will be a time and a place for over producing electricity with solar sometime in the future.

Over the past several months, the prices of electricity when looked at the average kilo watt hour costs are starting to rise again. There are many reasons for this, and one might be related to the gradual increase in oil prices again. What is a definite is that when electric prices go up, the investment in a solar panel electric system become even better. It is simple math: if electricity doubles, a solar system will pay for itself twice as fast.
As a homeowner, you can either pay for electricity the old fashioned way and but it through the electric company at their rates and on their rate schedule. Or, you can do what more and more people are doing and produce electricity yourself from a solar panel system.

Solar power is still not cheap, it is an investment, and it will take several years for the project to pay for itself.  What you really want though, is to be sitting back on your couch after it has paid for itself knowing that it will continue to produce electricity for the next fifteen years or more and there is absolutely no cost for that.  As long as the sun keeps shining and you keep cutting back tree branches that would block solar sunlight from hitting the panels, you will be in good shape.

Another MUST DO when Buying Solar Panels:

1. Be sure to hire a licensed solar installer
2. Make sure you apply for your solar rebates with the state and local government
3. Make sure you have a 20 year warranty on the solar panels, that is the industry standard