Residential Solar Power: Is It Finally Affordable?

With all the sales pitches, generous numbers, and enthusiasm that solar companies and proponents are tossing about, one would have to wonder why panels aren’t glimmering from every rooftop in the nation. It’s not as if those generous numbers, made possible through a gamut of rebates and tax incentives, are misleading, is it?

Well, solar power is more affordable than ever before, but given rising unemployment and consumer hesitancy, affordability for the average homeowner is uncomfortably tricky.

Photo Credit: Interesting Energy Facts

In theory, with the capless 30 percent federal tax credit and nearly or equally as generous subsidies in many states, the average homeowner can get more than half of their solar energy system paid for. It’s a groundbreaking deal, especially when one considers that solar systems pay for themselves in energy savings and then continue to generate free electricity (among other applications) for 25 to 40 years or longer.

In terms of end costs to the user, solar is incredibly reasonable. According to stats from Solar Oregon, in that state (again note the variability between state subsidies), an average $20,000, 2-kilowatt solar electric system would cost the homeowner only $5,200. That’s nearly a 75 percent discount, paid for by a combination of federal, state, and utility incentives.

However, the homeowner would still need to come up with $16,000 out-of-pocket to pay the contractor (in this case, $4,000 is paid by the Oregon Energy Trust directly to the contractor). Despite the ability to recoup the majority of that up-front investment, it’s numbers like that that keep solar unaffordable for the average American family.

Now there are resources available, such as low-interest loans and other financing options, by which homeowners can avoid coughing up the cash up front. But loans, low-interest or not, are not very popular at this time, especially with so many families now unemployed or in real danger of becoming so.

The truth of the matter is – all economic fears aside – solar power is very affordable. Compare a solar home loan, after subsidies, to the wild home loans of just a few years ago. It’s a relatively small price and one that pays for itself over time.

Remember that solar is becoming available to an incredibly large number of people. Indeed, state incentive programs are running out of money long before they run out of applications. There are ways to make solar a part of your lifestyle, for any and all homeowners, but hesitancy and finances are a big concern and understandably so.

Still, enthusiasts should rest easy: Solar is working its way up, and it’s only getting easier.

Posted on August 10th in Solar Funding by Dan.