Paying for It Know what incentives apply to
make financing your solar electric
system as affordable as possible.
BY CLAUDIA EYZAGUIRRE
With nearly 40 percent of carbon dioxide emissions
produced by electricity generation, many of us
yearn to produce our own pollution-free power
from the abundant sunshine that lights our roofs.
Still, installing your own photovoltaic (PV) system
requires careful attention to rebates, tax credits
and financing. A good solar installer will help you through this
process. But here’s a primer on how residential grid-connected PV
systems are financed.
The cost of a PV system is measured in dollars per watt installed.
For small PV systems, the average cost is $8 to $10 per watt before
incentives. The total cost depends on the system size, which is determined by the electricity load of your building or by available roof area.
The biggest incentives generally exist in states having renewable port-
folio standards requiring electric utilities to develop or purchase
renewable energy. To support the RPS goals, these states created laws
that incentivize solar power.
Some homeowners will want to produce all their energy from solar
panels; others choose a smaller system size for economic, roof space
or shading reasons.
As you calculate the appropriate size for your system, it’s important to upgrade the energy efficiency of appliances, lighting and
weatherization to reduce your power consumption. A typical home
PV system is 2 to 5 kilowatts in size. The average U.S. home uses 10,000
kilowatt-hours of energy each year. To meet the full energy needs of