Solar Energy – SRP Cost Calculator

More and more I am asked questions with regard to installing solar panels at a home.  As such, I thought it time to talk to some of the aspects here to better educate people with regard to the use of solar panels to provide energy for your home.  So, you will see more posts around this topic in the next few weeks.

Why and Why Not Solar Energy for My Phoenix Area Home?

First, let’s talk about the motivations for why someone would want to ‘Go Solar.”  There are essentially two motivators, the first of which is more practical.  Firstly, people want to save money and so they look at solar as a way to save money in the long term.  Secondly, they look to solar energy to reduce harmful emissions into the atmosphere.  In other words, people talk about reducing your “carbon footprint” through the use of solar energy.

These arguments compare very closely to the aspect of hybrid vehicles.  The first motivator is the purported costs savings from buying a hybrid vehicle that gets much greater gas mileage than other vehicles.  The second argument involves the reduction in vehicle emmissions. 

Unfortunately, the cost of a solar system is a primary consideration for most prospective buyers as the expense of installing a solar system still means that a buyer has a long payback period to recoup the expense of the system.  This is what has deterred most people in the past from opting for solar on their homes.  Even with tax incentives and the offsets of utility bills, the payback period for solar was considered too far out and not worth the investment.

With the clear implications of Global Warming, the second motivator is gaining in prominence.  It is this motivator, coupled with advances in solar technology to help reduce pricing further, that would serve to tip the scales to get people to more aggressively implement solar arrays on their homes.  Simply put, more and more people are looking at solar to reduce their emmissions contribution and they are increasingly willing to pay for that capability. 

So, the decision to implement solar technology in your home should be based on both motivators with, in my opinion, more weight given to the latter. 

How Much Does Solar Really Cost?

The cost analysis for solar is an exercise much like doing your taxes.  There is the initial cost of the system.  Then you have offsets such as federal tax incentives, state tax incentives, and even private incentives such as that done by Salt River Project and Arizona Public Service, the Valley’s two largest utility providers. 

If the system is leased versus purchased, the calculation can vary.  As well, this is all dependent on the size of the array and overall solution you implement.  

Using Salt River Project’s SRP Solar Calculator (this is actually provided by Clean Power Research.  Keep in mind that the PhotoVoltaic system size you select may not be what’s prescribed when talking with a technician. 

Based on the solar cost calculations, one can see that solar doesn’t generate enough electricity to completely offset your monthly electricity usage.  Because of this and the costs associated with solar, the payback period will likely be greater than 5 years from date of installation.  This comes back to the motivators mentioned above – that when looking purely at the Return on Investment, solar isn’t as compelling.  But, it’s critical to look at solar from the perspective of both motivators.  As well, solar users need to consider the long view – that they will recoup costs over the long term.

It’s Not Just About Cost Anymore

Solar technology is a hot industry right now.  This isn’t likely to calm down and researchers public and private are working diligently to lower the costs for developing solar panels.  For the homeowner, one can expect that the recoupment of costs associated with installing a solar system on your home  will take several years at minimum.  However, it may be that this period begins to decline.

Installing a solar system is not a cheap enterprise and withouth the incentives and tax credits currently available, most people could not justify the expenditure regardless of the environmental benefits.  However, with the current incentive and tax credit programs, solar is a worthwhile effort.  It is not just about the cost but about the reduction of harmful emmissions and pollutants into the atmosphere.  As this aspect grows in importance and emphasis coupled with technology advances that drive down costs further, I expect more and more homeowners in the Phoenix area to take advantage of what solar has to offer themselves and the planet. 

Thanks for looking at ways to change how we live for the better.

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