Photovoltaic Electricity Production--Solar Electricity

As a great alternative to traditional energy, the sun can be used to generate electricity directly in the home. Systems typically are referred to as being grid-connected, or as being off the grid. Grid-connected systems are connected to the local power utility for backup and usually do not include storage batteries. Off the grid systems must have batteries and are not connected to any utility. Most urban or suburban systems are grid connected to reduce cost and to allow the system to feed electricity back to the utility.

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A solar power system on your home is a long term, low risk, high return investment. Solar offers an initial tax free annual return on investment of from 4 to 10%. As utility rates increase, the annual return increases.

The cost of a solar electric system can vary significantly depending on the amount of power required. A home with a $50/month electric bill will require a completely different system than a home with a $500/month electric bill. Residential systems range in cost from $10k-100k.
In addition to this direct return through utility savings, homeowners can also expect that their property resale value will increase substantially. An article in The Appraisal Journal (October 1999) showed that property resale values will increase $10-20 for every $1 saved annually in electricity.

If it is available in your area through your electric utility, you can sign an Interconnection Agreement with them and trade power with the utility at retail rates. The process of trading power with the utilities is called Net Metering, and it allows you to be credited at the same rate that you would otherwise be charged. At the end of your billing cycle, you are responsible for paying the difference between what you used and what you produced.

Solar power systems produce most of their electricity during times of peak demand when electricity rates are highest, which means that you will often feed power into the grid at peak times and pull power from the grid during off peak times. This allows many customers to zero out their bills even if they are not producing as much energy as they are using.

The California Solar Initiative (CSI) offers a rebate for homes and small commercial systems, and the Federal Government offers a tax credit that further reduces the cost of the initial investment. Please consult with your tax professional concerning these rebates and tax credits.

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