Does Solar Energy Save Money?

by Leann Harms, Demand Media
    Solar panels absorb electromagnetic radiation and convert it into electricity.

    Solar panels absorb electromagnetic radiation and convert it into electricity.

    You can’t go anywhere online or off without seeing or hearing about people going green. Is green the new black? Among the many ways people are pitching in to protect the environment, including recycling, reusing and reducing, is to retrieve power from solar energy. So, if solar energy can help save the environment, you’re wondering if it can also help save you money.

    What Is Solar Energy?

    Solar energy is basically exactly what it says it is—energy provided by the sun, or more technically electromagnetic radiation from the sun’s rays. Solar electric systems, also referred to as photovoltaic, or PV systems, are designed to absorb the sun’s electromagnetic radiation through solar panels composed of semiconductor materials called solar cells. The radiation is converted into electricity and transferred throughout your home via a circuitry system. They are more effective in areas exposed to lots of sunlight but can be used in any geographic area that receives some amount of sun. Since sunlight is one of the few free things left on the planet, using it to power some, or all, of your home can be a great way to reduce your electric bill.

    Cost vs. Savings

    The cost of installing a solar electric system in your home can vary depending on what type of system you purchase, how much electricity you want it to compensate for, the size of your home and competitive pricing from different installation companies, as well as manufacturer rebates. According to the U.S. Department of Energy’s Homebuilder's Guide to Going Solar, the average cost for a PV system is about $8 per watt or $24,000 for a 3 kilowatt system with solar water heating systems ranging from $1,000 to $4,000. A professional installer will be able to provide you with a quote before you decide to install a solar electric system in your home. So although the actual system and installation fees will come at a cost, the electricity produced won’t cost you a dime. The money you will save on conventional electricity will eventually make up for the cost of the system.

    Looking Ahead

    The cost of living continues to increase every year in the former of higher grocery expenses, fuel costs and, of course, increasing utility costs. Reducing your dependence on conventional electricity now will prevent you from encountering constantly increasing electricity bills. As more and more people move toward a sustainable and eco-friendly lifestyle, solar energy will also continue to grow in popularity and an increased desire for homes already equipped with solar energy. Solar energy may increase the value of your home and make it more attractive to buyers. According to the Homebuilder's Guide to Going Solar, solar-powered homes sell twice as fast as homes equipped with conventional electricity and solar-equipped houses by Shea Homes in California appreciated more than 55 percent while conventional counterparts appreciated at 45 percent.

    Tax Incentives

    You are also eligible for certain tax incentives when you install solar-powered equipment, such as a solar water heater, in your home. In accordance with the American Recovery and Reinvestment Act of 2009, you may qualify for a tax credit of 30 percent of the cost of installing qualified energy-efficient products, up to $1,500. Solar-powered water heaters are among the qualifying products. Check with your local and state government agencies to see if additional incentives might be available in your area.

    About the Author

    Based in South Florida, Leann Harms has been writing since 2008. Her design, technology, business and entertainment articles have appeared in "Design Trade" magazine and Web sites including eHow. Harms has a Bachelor of Arts in English from Florida Atlantic University.

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