Home Solar Electric Still Expensive – How To Pay For These Systems?

Back in the 1970’s when solar power came on the market the cost for a solar electric system for your home was running about $25.00 per kW-hr (kilowatt-hour). Today in 2008, the expense is down to about $.25 per kW-hr. But, traditional electricity sources like fossil fuel and nuclear power are running at or below $.125 per kW-hr.
Given these figures, solar electric systems are still a very tough economic pill to swallow. Most home owners do not stay in their homes for longer than 5-7 years and the payback, or return on investment for a solar electric system given these numbers is on average in excess of 20-25 years. In just doing the math it is hard to see where it makes sense when it comes to money for getting a home solar electric system rather than continuing to pay for traditional electricity.
Even still these systems are getting installed more and more in the U.S. How?

Government And Utility Company Incentives and Rebates
Federal, state and local governments as well as local utility companies provide tax incentives, rebates, and power buyback programs to make these systems more affordable. For example, the U.S. Government offers a $2,000 incentive for a solar electric system, while many states offer $1,000 incentives. Many local power companies offer incentives based on the size unit installed and whether or not your system ties into the power grid or not. For a list of state and federal incentives visit: DSIREUSA.ORG – Database of State Incentives for Renewables & Efficiency.

Additional Options To Pay For A Home Solar Electric System

Unfortunately, there are not that many options yet to help pay for these systems on a wide scale. Here are some options though:

In some cases, installation and supplier companies finance the solar system for a qualified homeowner through a bank loan.

In other cases, the options to pay for these systems are out of your pocket or perhaps using a home equity loan. With the recent housing market slide, home equity loans are much more difficult to get than they used to be so this option is tough to get at this time (July 2008).

In some states, property tax assessments are reduced where alternative energy sources are installed on a property.

Be able to produce more power than you use, but this takes having the space to install enough solar panels which many homes do not have. This will also add to the expense of the system.

Another option that is just getting attention is local government special tax assessments where the local government pays for the acquisition and installation costs of the solar electric system and the property owner pays an extra real estate tax to have the system paid for over 20 years. In this case the costs are passed with the property onto a new homeowner.

And one last option that is also under study is providing home owners with long term subsidized loans that are similar to student loans.

All of these options are valid, although some more than others. Loans to individuals such as the last item just mentioned above seem less favorable if the loan sticks with the person if they sell their home where the solar system was installed. But, for sure, all of these ways of paying for home solar electric systems look more and more attractive and achievable as time goes along.
One thing we can be sure of, fossil fuels will keep getting more and more scarce and expensive. The talk and impacts of global warming are also taking more and more ground. With these two in mind, technology for solar electric systems should continue and accelerate the affordability such that very soon, every home in the U.S. should have some sort of solar panel sitting on top of it. It is just plain silly that we don’t already.