The Cost Of Solar Energy System

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The Cost Of Solar Energy System

Solar energy is free but the tools that will enable you to harness this free energy are not.

If you are planning to install a solar energy system right at your home and would like to know how much it would cost, there are 3 things you need to consider:

First, the cost depends on how much energy your household requires. More energy you require means more solar panels and higher cost of installation. The good thing is, the technology to harness the power of the sun is relatively cheaper than it was several years ago.

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Second, the government is offering a rebate to those who will switch to alternative form of energy. That means, the government will shoulder a portion of the total cost of the system.

Third, you can get tax credits when you switch to solar energy system. The amount of tax rebate depends from state to state but the range can go from $1000 to $2000.

All these affect the overall cost of your installation.

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A photovoltaic system can cost roughly at $8000 to $10000 per 1kW system. This equates to $8 to $10 per Watt. An average American household with 3 bedrooms requires at least 1.5kW to as much as 3kW. Thus, installation can cost from $14000 to $30000, before rebates and tax credits.

Government rebate varies from state to state. As a reference, an average California household that requires 1.5kW system can get as much as $4200 rebate (1.5kW= 1500 watts x $2.80 per watt = $4200).

A household that requires 3kW system can get as much as $8400 (3kW= 3000 watts x $2.80 per watt = $8400).

Before, tax credit goes as much as 30% but it is lowered to 7.5% of system cost after rebate.

So an average household with 1.5kW system can get $735 ($14000 – $4200 x 7.5% = $735) worth of tax credit while the 3kW system can get $1620 ($30000 – $8400 x 7.5% = $1620) worth of tax credit.

Example A: 1.5kW system

Cost of solar electric system: $14000
Less rebate: $4200
Less tax credit: $735

Cost of the system after rebate and tax credit: $9065

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Example B: 3kW system

Cost of solar electric system: $30000
Less rebate: $8400
Less tax credit: $1620

Cost of the system after rebate and tax credit: $19980

Again, these are rough estimates just to give you an idea of the cost of installing solar energy system. They do not represent real figures.

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Top tips:

Energy independent home has higher resale value and is more preferred by home buyers. So, if you are planning to sell your home in several years, installing solar energy system does not only provide substantial saving on electric bill, it also is a good home improvement option.

If you want to finance the cost of your solar energy installation, include it in your mortgage.

If you want to reduce your electricity load, switch to energy efficient appliances. Buy electric appliances with ENERGY STAR seal.

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Low energy requirement means lower installation cost.

Residents of areas with higher electricity rate can benefit most on solar energy system.

If you can’t afford the photovoltaic system, you can install solar hot water system that costs roughly from $2000 to $4000.

Solar energy is best for houses that are located far from the existing power lines.

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The Benefits Of Solar Energy System

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The Benefits Of Solar Energy System

Utilizing solar energy or the power coming from the sun’s rays has many benefits. Let us take a closer look on each of them.

•Solar energy saves money.

In 2006, we saw the highest jump on residential electric rate. In some areas of the country, as much as 60% increase was seen. Many experts agree that the trend will likely to continue in the years to come. This means that you have to pay larger sum of cash to sustain your monthly electric consumption. But if you produce your own power, you can prevent paying the high cost of energy – especially now when energy prices are very unstable.

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On a larger scale, if American households switch to other types of alternative energy including solar energy, the nation’s spending on imported oil will greatly decrease.

•Solar energy is environment-friendly.

The issue of global warming will not go away. So if you want to do your part to save this planet, drawing your power requirement from the sun will make a great difference.

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Solar energy is sustainable and renewable unlike gas, coal and oil that most utility companies use. It does not produce sulfur dioxide, nitrogen oxide, mercury or carbon dioxide as byproducts so it doesn’t pollute the air. Since it doesn’t emit greenhouse gases, it doesn’t contribute to global warming.

Using solar energy reduces demand for fossil fuel and reduces the nation’s dependence on foreign energy sources.

•Government gives incentives to those who use alternative form of energy.

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Many are discouraged to install solar electric systems because of the initial cost of the project. But, some states like California offers federal tax credits as much as $2000 and up front rebate that covers 20% to 30% of the total system cost. These offers are relatively good considering the substantial increase of energy cost in recent years.

Note: Due to the increasing number of households who want to switch into alternative forms of energy, the incentive levels decline. Check with your state government the rates it offer if you are going to make a switch.

•Solar power systems are dependable and require little or no maintenance.

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Photovoltaic (PV) cells that are used in solar power systems are capable of providing electricity for a very long time. Originally developed for space use, PV cells require little or no maintenance. The proof is, most satellites orbiting earth use PV cells that are in harsh environment, not maintained but are still working properly. The manufacturers of solar panels can give as much as 25-years warranty. Talk about quality and dependability.

•Solar energy helps improve the quality of life.

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Saving the planet one watt at a time if done collectively will help reduce the effects of global warming. It will also reduce demand on coal, oil or gas power plants that emit harmful gases. In turn, using solar power helps clean the air and improves the quality of life of every individual.

•Solar energy can reduce demands for other non-biodegradable materials.

Solar benefits

For utility companies to distribute power to every home, they need materials necessary in building these systems of power lines like electric cable and steel. These require energy to produce and contribute to greenhouse gases emissions. If we can cut the demand for power plant and switch into alternative energy, we can also reduce the demand for these materials and help the environment.

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