Solar Incentives

Just like many consumer products we use, solar equipment has gone through, and continues to go through, several incentive programs and financing structures in an effort to make it affordable and available to as many people as possible. The first step towards making solar a viable option to reduce energy costs is the ability to deposit unused electricity from your solar array, into the local grid, at times when your solar production is greater than your electrical consumption, known as “net-metering”.

Net-metering makes it possible for the utility company to keep track of how much electricity you have contributed to their grid, and they deduct that amount from your monthly bill. By properly calculating previous electrical usage, and sizing an appropriate solar array, it is possible to completely offset your yearly electrical usage by using solar power*. This is the most basic value of every solar module across the globe; by producing electricity on your property, you no longer need to buy it from the utility. The exact value of your solar energy is whatever the cost of electricity is in your area.

In the US and overseas, there have been several different incentive programs that have helped reduce the burden of the initial cost of solar energy, as well as rewarding continued solar production. Cost incentives have come in the form of tax credits, as well as $ per watt rebates. After paying to install your solar system on your home or business, you can take a percentage of the total cost of installation, and deduct that amount directly from your yearly income tax requirement. That means either writing a much smaller check to the government, or, even better, getting a big check back in the mail. Other incentives, offer an exact dollar amount, for every watt installed. Often these programs start with a large value per watt, and diminish over time as more systems get installed. New York has recently started such a program, so you better get your paperwork in early before funds get depleted. Many solar installers have restructured their payment options, so that the customer has less money to pay up-front, and the installer files for the incentives, and waits for those checks to come**.

Rebate Programs for Renewables

Incentives based on performance come in the form of Renewable Energy Certificates (RECs) and Feed-In-Tariffs (FITs). Depending on the location, one REC is rewarded for every pre-determined amount of solar energy produced, often per 1000 kiloWatt hours (kWh). Once a solar owner accrues these RECs, they can be sold on the open market to utility companies, who are required by the state to purchase RECs to account for their renewable energy production towards their Renewable Portfolio Standard (RPS).  While RECs have proven to be a popular way to get people to install solar, they have also proven to be a very volatile commodity, with their values fluctuating drastically, making for nervous solar investors. FIT’s are similar in that they are rewarded per unit of energy as it is produced, but it generally has a more defined value, and is doled out directly from the utility to the solar array owner. Where REC values fluctuate with the market, FITs have set prices.

These are some of the most common solar incentive programs in the US. Feel free to comment if you know of other forms of incentives available in the US or abroad.

*On the technical side, net-metering is important for another reason. Solar modules can turn sunlight into electricity, but they cannot store that energy. Instead of installing a battery bank connected to your solar array, so that you can use electricity at night when the sun isn’t shining, we use the grid for this purpose. By generating more energy during the day than we need, we are able to offset out nightly usage. By properly calculating local average daily sun hours, along with shading, azimuth and tilt, you can accurately calculate how much a solar array will produce in a given year.

**Check for complete lists of all energy efficiency upgrade incentives, and contact a local solar installer for up to date information.


One thought on “Solar Incentives

  1. I am a international stundet, and this is the second draft for my final essay in English class.It’s a compare/contrast essay, please fix my grammar errors, word choice, verb tense and enhance the conclusion paragraph. Thank you! Green Roofs or Solar Roofs ? You want to contribute to our earth but have no idea? Everyone knows Global warming and unban heat island effect are making inroads into the places where you and your family live. We all know that is a serious issue, and also have positive attitude toward it.Suppose that you are not a boss of an enterprise, therefore, you are powerless to decide how to emission air pollution or recycle resources. Don’t be discouraged! You still have a way that is to develop the idea of green design to protect our earth. Green design is an internationaltheme that has been discussing for many years, and was promoted in “Leaders Summit Meeting” in Brazil in 1992. It is called Ecological Building in Japan and Sustainable Building in Europe. How to put the idea in use? Home Green Design is an affordable way for everyone. I am going to introduce two ways to save energy. They are green roof and a roof covered by solar panels. This essay will show their advantages and disadvantages of the following: 1. Expense; 2. Workingrequirement; 3.Function. Despite the fact that everyone knows the benefit of solar panels, I will argue that green roof is worth than solar panels. First, you do really care about the expense that green roof and solar panels might cost. For a100 sq foot, you need about $25,000 to install solar panels on your rooftop. The system works at least 25 years. On the other hand, it will cost you $1,000 per year. Is that worth? Itdepends on your personal utility rate of electricity. You would save a small amount of money if you are living with a big family. But a fact that you have to consider is one dollar tomorrow probably won’t have same value as today. Otherwise, you still need to pay the upkeep of the system every year and the charge of basic power for keeping it working. It is priced $1,500 for the same area as 100 sq foot, and the maintenance will not be the problem. Basically then, all you need is a waterproof rooftop, a layer of soil and a bag of seeds. The idea of Green Roof is much cheaper obviously and has lower maintenance than solar panels by comparison. Next is the working conditions that for each one. Before you choose one of them, you might need to consider that the area you live is sunnier or cloudier. Solar panels that as the name hints, is a system that has to be solarized under sunshine. In addition to sunshine, theGreen Roof also needs adequate raining to support them growing. If we simply consider that the best environments for them, solar panels need less conditions than green roof. Actually, solar panels will still work on a cloudy day. Of course, no one expects that the system can maintain same efficiency as it used to be on a sunny day. However, that is probably enough for keeping a lamp plus a computer working for one day. Unfortunately, solar panels do not fit in a winded area, because the panels might be damaged by blown stuff. In this stage, they are almost in a tie. Taking that green roof is working 24 hours a day into account, I guess that green roof is a little bit better than solar panels. Lastly I will compare the most important part which is the function of them. In theory, solar panels can basically reduce your energy consumption. What would be powered with solar electricity are the things such as the refrigerator, the computers, the TVs and the airconditioning, etc. Sounds great! But something you do not know is solar panels efficiency averages only 20% to 40%. Solar panels catch sunlight and convert to another type of power that we usually use for home electronic appliances. The system loses much energy during theconversion process. You can’t make appliances working unless you get enough energy from sunlight. So how about green roof and its benefits? It not only filters rains and air pollutants, but also keeps the house warmer in winter and emissions heat in summer. Sometimes it caneven provide a habitat for birds and some small animals. To choose solar panels or green roof is a fascinating question. It is a tough choice for either, I will personally choose green roof anyway. Solar panels are still an immature technology somehow, especially in converting energies. In addition, price is also a point to be considered. I believe that to protect living environments is important for individuals, but it is unacceptable ifno one can solve the problems that I mentioned before.

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