You’ve probably seen them on TV - those folks who installed solar arrays on their roofs and now can’t stop talking about the joys of watching their electric meter spin backwards and their electricity bills drop to near zero as their systems generate power and sell it back to the local utility. Especially if you’ve been getting sticker shock from your utility bills lately, you might be wondering if you can do the same — and if so, whether you should.

The short answer is, it depends.

On the one hand, there’s probably never been a better time to install solar energy systems. Currently there are federal, state and local incentives, mostly in the form of tax credits, that can offset up to half the system’s costs — and many of them end or decrease after this year. Currently the incentives apply to both solar water heating systems and photovoltaic (PV) systems, which generate electricity from sunlight. Either or both may be a good fit for your particular situation. Isabelle Christensen, vice president of marketing at Akeena Solar in Los Gatos, says the choice depends mostly on the homeowners’ lifestyle. “For example,” she says, “having multiple TVs, computers, wine cellar, or koi ponds would make PV a definitely better choice than hot water heating.”

On the other hand, many factors affect whether you’ll recoup your investment in saved energy costs over the years, even with the rebates; the expected lifetime of most systems is 10 years. If your primary issue is helping the environment, this might not matter much, but if your main motive is saving money, look before you leap. Says Akeena’s Christensen, “If a customer’s electric bill is more than $100 per month, then it makes economical sense. Anything below that makes altruistic sense.”

The cost of a system can vary considerably depending on such factors as the equipment you choose, the difficulty of installation, and local labor costs. Likewise, a number of factors affect the benefits, including the design and specifications of the equipment you choose, as well as your local utility’s rates, which can fluctuate quite a bit.

As a point of reference, experts say a 5kw system, which would completely offset the energy needs of many homes, runs in the mid five figures installed. However, if you’re strapped for space or cash, you can still get a lot of benefit from a smaller system, perhaps dedicated to a particular area of your home. Owners of swimming pools, for example, can often eliminate a hefty expense by installing a small solar water-heating system just for the pool.

The biggest issue, though, is location, location, location. As a rule, solar panels should be placed where they’ll get unobstructed full sun for most of the day (i.e., 9 a.m. to 4 p.m.); southern exposures are ideal. While their efficiency is largely unaffected by cold (some even perform better in chilly conditions), they produce less energy on cloudy days. If you live in the fog belt, you’ll need to install more panels to achieve the output the system would generate in a sunny spot. Also, it’s important to keep the panels clean, as dust, leaves and other debris can pile up and reduce efficiency. If you don’t have an appropriate spot on the roof, it may be possible to mount the panels in a sunny spot in your yard.

Consult your utility bills to identify the pain points in your energy usage over a typical one-year period. If your gas furnace and water heater are working overtime, adding solar water heating could cut that down considerably. If it’s the electricity that’s killing you, go with the PV. If you’ve got the resources, do both!

Tip: If you’re planning to replace your roof this year, that’s the perfect time to install rooftop solar panels as well. You’ll save labor costs and have more flexibility in configuring the system that meets your needs. Also, a recent innovation is shingles that are themselves solar panels, allowing the roof itself to collect energy.

Whether solar is right for your situation (and, if so, which system and installer to choose) is a far more complex subject than can be addressed in this article. Here are some sites that can help you as you research the issue. And, as always, don’t hesitate to give us a call if you have questions.

Comprehensive Overview of the Issues and Options
Article: Making Sense of Solar-Electric Costs (Home Power magazine)

Information on Federal, State and Local Incentives
Tax Incentives Assistance Project: Consumer Tax Incentives
California Solar Center: Local Incentives for Solar Energy
PG&E Info: California Solar Initiative
California Solar Initiative Resources