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Solar Energy On House
Here are 5 major advantages and disadvantages / pros and cons of solar energy:

Solar Energy Disadvantages – The Cons

#1. Solar Energy is expensive.

Home solar can deter even the most enthusiastic customer with sticker shock. However, it’s important to be aware of the difference between gross costs (the full price of the system) and net cost (what you pay after discounts, rebates, and tax credits). While a $30,000 price tag is common and sure to close browsers, wallets, and checkbooks, the actual net cost is always much less. Here’s why:

  • Federal Tax Credit. All residential solar systems are eligible for a 30% federal tax credit. That means you can write off some of your taxable income up to 30% of the system cost (i.e. your taxable income decreases by $10,000). While you still have to pay up front, you get this money back at the end of the year.
  • Local Rebates. Many places in the U.S. have some sort of state or local utility rebate that you can take advantage of to save more. These are commonly a fixed dollar amount per installed watt, (i.e. $1.25 / W), and can easily knock off another 20% of the install cost. For more information see the DSIRE database.
  • Group Discounts. Some organizations offer 15-20% off the retail price through their group discount programs. Although not active in all parts of the country it’s worth looking around to see if one is available in your area.
  • Power Purchase Agreements. Some solar installers offer systems for a small amount ($1,000 or sometimes $0) down. Essentially the installer rents your roof space, installs solar panels, and then gives you a fixed, discount electricity rate for the next few decades. The advantage is that you don’t have to buy the system and you get instant energy bill savings.

Even with all of this you’re looking at on average a $10,o00 bill for home solar though, which makes it a major impediment, and disadvantage, to home solar energy.

#2. Solar Energy is Complicated

How many of your neighbors have installed solar power? Most people don’t know anyone with solar, which means that there is a very limited amount of water-cooler type discussion about it. Most people don’t even know that if you’re installing solar within city limits it’s going to be grid-tied (there are no batteries) and you won’t be able to turn on the lights when the power goes out.

So how do you learn about solar if you’re interested? Most people go straight to Google, which has a lot of good information and a lot of bad information. Or they contact a solar contractor who may provide good information but may also try to hard sell the biggest solar array they can get away with.

The bottom line is: complexity maintains inertia, meaning that it’s hard to get motivated to buy something when you don’t know anything about it. If you came here looking for the basics, here is a solar energy diagram to get you started.

#3. There is a lot of Misinformation about Solar Energy

“Solar doesn’t work in cloudy areas.” Then why does Germany have 6,000% more solar energy than the United States? Did you know that solar panels are actually less efficient in really hot weather like temps found in summer in the SouthWest?

Misinformation about Solar Energy

“The problem with solar is that we haven’t invented the right technology yet.” Did you know that we’ve been using roughly the same panel design for 10 years and panel pricing dropped 30% in the last year? Those new super-cheap high-efficiency panels may work in the lab, but scaling to production levels is a reality-based enterprise.

“Solar energy decreases our reliance on fossil fuels.” No, not really. Electricity in your home comes from a combination of coal, natural gas, nuclear, and some renewable energy sources (more: Sources of Electricity in the US). Home solar mostly decreases the use of non-renewable coal.

Part of the challenge facing the solar industry is the mass-education of consumers to correct misinformation and grow the market.

#4 .It takes time and effort to learn all of this stuff.

Why get motivated until you know that solar can save (or make) you thousands per year, will pay itself off in a few years, will increase the value of your home, decrease the time to sale, and ever so slightly decrease the nation’s consumption of coal while decreasing your carbon footprint?

Like many other things, it’s a problem of education.

#5. The solar industry has no transparent pricing; it’s hard to know who to trust.

There are a lot of companies out there looking to turn a profit, and there are fewer good, objective information sources out there. Try getting a solar quote from several installers and you might end up with a $21,000 spread. How do you know what to pay when you don’t even know what it’s supposed to cost? Keep in mind that like an industry, there are good and bad players. Just make sure you shop around before going with a bargain deal that has no point of reference.

Solar Energy Advantages – The Pros

#1. Solar Energy pays for itself.

Solar Energy Cash Roof

How many home improvements pay for themselves? In some areas a complete solar array can pay itself off in just 4 years. After that it’s just producing money and helping to keep the air clean.

#2. Solar Energy saves you money.

Did you know that an average solar system will save $50,000 on energy bills over 25 years? If you live in an area with high electricity costs this number will be much higher.

#3. Solar Rebates pay for half.

Up to 50% or more of the system cost can be taken care of by a combination of discounts, rebates, and tax credits. The best time to go solar is always now since you can’t count on these being around forever.

#4. Solar Energy reduces our consumption of dirty fuel.

coal burning

If I told you that the main energy source for your home was expensive, dirty, non-renewable, and poisonous to the air, land, and sea, would you be interested in finding a new one? Many people in the U.S. don’t know that almost half of our nation’s energy supply comes from coal, and in some areas it’s as much as 80%. Coal is bad, and it’s only cheap on a very parochial set of economic criteria. Tax CO2 emissions? Now it’s more expensive. Pay for total health care cost directly link to the combustion of coal in power plants? Now it’s more expensive. Pay for total mining damage to ecosystem functions that benefit the U.S. economy? Now it’s more expensive.

Want to stop using coal? Switch to renewable energy sources.

#5. In some parts of the country, home solar energy is the best investment you can make.

Solar Energy Home Investment GraphLooking for a new investment vehicle? Try your roof. In places like New Jersey, a state that has established a renewable energy credit market, solar is lucrative to the tune of 324% return on investment. In layman’s terms, that means if you invest $25,000 in home solar, expect to get $81,000 back in your pocket over the lifetime of the system. S&P 500 Index Funds won’t even get you close to that.

[ photo credit #1 Pros ]