| One of the discussions I have with homeowners who | | | | comes in from your utility company. All this is explained |
| are considering investing in a solar power system for | | | | at my website, This averages out to 600 KWh of |
| their home is about how long the payback period is. | | | | power per month. At 16 cents per KWh, you would |
| We hear this term used with almost any cost-saving | | | | spend $96 per month on electricity. This is your current |
| product, including hybrid cars. With solar power, the | | | | cost. To get an idea of what a Kilo Watt hour is, if you |
| payback can be from Day 1, depending one a | | | | have a 100 Watt light bulb burning for one hour, you |
| combination of the price you pay for electricity and the | | | | have consumed 1 KWh, which cost you 16 cents. |
| interest rate you pay to finance your solar power | | | | With this sample system, theoretically you are now |
| equipment. In this article, I will show you how you can | | | | producing all the power you need from your solar |
| determine your payback period. | | | | system. During the day, your system will be producing |
| Solar power is at an opportune time in this country, and | | | | more power than you are consuming, and the extra |
| especially in states such as Pennsylvania and New | | | | power is sold back to your utility at the same price you |
| Jersey, where state and utility rebates can offset | | | | are paying (your meter actually runs backwards). At |
| most of the cost. In Pennsylvania, the state is currently | | | | night, you pull power back from "the grid". Over the |
| rebating $2.25 for each watt of DC power that your | | | | course of the year, you essentially have produced an |
| system produces. Thus, if you purchase a system with | | | | amount of power equal to what you consume with |
| 30 panels, each rated at 200 Watts, you are | | | | this example system. |
| purchasing 6,000 Watts of DC power. Thus, you | | | | Next, lets look at the financing side of the equation. If |
| would get a rebate of $13,500 from the State. The | | | | you use your home equity to finance the $24,150 for |
| average cost of a solar power system is about $7 to | | | | 15 years at 6% interest, your monthly payment would |
| $8 per DC Watt. The price varies depending on the | | | | be $204. So far, you have not achieved any instant |
| company that makes and installs the system. Using the | | | | payback, as you are spending $108 per month more |
| high end, this example system would cost $48,000. | | | | than you are saving in electricity costs. However, the |
| Once you subtract the state rebate, you are left with | | | | state of PA also mandates that the utility pay you |
| a cost of $34,500. Next, the IRS lets you take a 30% | | | | back for generating power, even if you are consuming |
| tax credit against this difference. Thus, when you do | | | | it. For every 1,000 KWh you produce, you get a |
| your taxes, you get back $10,350, bringing your cost | | | | certificate that gets traded back to the power |
| down to $24,150. This is the amount you need to | | | | company for about $240. Thus, this sample system |
| finance with long term financing. | | | | earns 7 certificates, for a rebate of $1,680 per year |
| Lets assume that you live in the Philadelphia area, | | | | (for every year), or $140 per month. Now, add your |
| which includes all of the Delaware Valley, in the | | | | $96 per month in electric bills you are not paying, and |
| counties of Bucks, Montgomery, Philadelphia, Chester | | | | you are saving $236 per month. Since your loan |
| and Delaware. The average cost of electricity from | | | | payment is only $204 per month (with interest that is |
| PECO is about 16 cents per KWH. Based on industry | | | | tax-deductible if financed with a home equity loan), you |
| standard calculations that show how many Kilo Watts | | | | are saving $34 per month, from Day 1! Now, as the |
| on average a solar power system will produce over | | | | cost of electricity continues to increase, your savings |
| the year, this 6,000 Watt system (DC capacity) will | | | | will continue to grow. |
| produce 7,200 KWh of AC power, which is what | | | | |