Save Money: Make $62,000 with Solar Power
Tuesday, May 12, 2009 at 3:59:00 PM
There is no question that "going solar" is good for the planet's environment, but it has a range of other benefits that make it very attractive beyond its "green-ness." In fact, the idea that you can help move the world toward a less oil-dependent future, and save money at the same time, should be a great argument if you are trying to sell yourself on solar power.
Among the main benefits of solar power are the savings realized each month on energy bills. In a culture where everything is "now, now, now" it is easy for people to be a bit short-sighted about the benefits of solar power. It is not uncommon for curious folks to wonder just how a $200-$500 monthly savings warrants a $40,000-$100,000 investment (before
solar rebates) in a solar power system. Let's take a closer look.
Check the solar savings numbers
Before you begin considering dollars and cents, it helps to put things in perspective. In a short timeframe, saving $200 in monthly energy costs may not seem like a very good return on your large investment. The fact is, your solar power system will have a minimum 25-year life cycle so, as you do with savings and mortgages, you need to think long-term.
The average annual energy costs are about $2,000 per household, but prices are expected to rise by 4.3% annually. This means that, by the end of your solar system's life cycle, average energy costs will be roughly $5,500 annually. If you were to install your solar power system now, you would find after 25 years that your total energy costs are over $87,000!
Put solar power cost in perspective
A typical solar installation costs around $50,000, you can expect to save over $37,000 during its 25-year lifespan. This equates to a 43% gross profit. This is a substantial savings, but it does not yet take into account the additional federal, state and local incentives for installing a solar system on your home. In fact, as time goes on there are more and more good reasons to take advantage of solar power, since the technology is continually improving, and the prices for installation, also new incentives are being put in place almost monthly.
Most of the rebates are paid when the system is completed. To learn the specific rebates and incentives in your local area you can use our Solar savings calculator. All of the rebates and incentives are programmed with the information from every state so you can plug in your variables and count your savings.
Also remember these "earnings" are not counting the benefits to the increase in appraisal value of one's home after the solar installation.
Other states, other solar rebate plans
Rebates and incentives vary from state to state, so make sure to check out the particulars for your region. Many states are taking a cooperative approach, leveraging the utility companies' grids to make the plan work as well as possible. It is wise to stay abreast of the latest news in this area if you are considering going solar any time soon.
If we take a classic example in California rebates and incentives knocks 50% off the total cost of system installation.
- $50,000 Initial Cost for a 6.25kWh solar power system ($8,000 / kWh installed).
- 30% state incentive is a $15,000 discount, which brings the system cost to $35,000.
- 30% Federal tax credit (on $35,000) is a $10,500 discount in addition state incentives, bringing total system costs to just under $25,000.
- $87,000 Energy Savings - $25,000 Solar Power System = $62,000 in Earnings.
The total amount you will save will depend on a number of factors, so make sure you get the best professional guidance from someone who knows the ins and outs of the solar power rebate programs as well as solar power technology. With a good plan, a determined effort and a professional's astute guidance, you can help save the world while you simultaneously save a lot of money.