Economics of Electrical Solar Power Systems

With so many important electrical loads in home these days having a reliable source of emergency power is becoming more critical. Refrigerators, freezers, sump, sewer, and well pumps, cordless phones, home medical devices, alarm systems, and many other important devices all need electricity to operate. Solar electricity can be a great alternative to a generator to power these devices in the event of a power outage. Solar power is clean, quiet, and requires very little maintenance. In fact, a solar back-up system can actually make you money when the power is on. As long as the sun is shining, your solar panels can be putting electricity back on the grid, reducing your electric bill.

Solar electric technology can be expensive. In some instances, like a remote, off-grid home, the choice for solar is simple. In a home that is already connected to the commercial power grid there are more things to consider. Helping to keep the environment clean, the security of emergency power, partial or full independence from the power company, the novelty of generating electricity from the sun, and other factors must be weighed against the cost of installing a solar system.

Unfortunately, for those of us who live in Virginia, the economics of the situation aren’t as good as we would hope. Electricity in Virginia is cheaper than the national average. Also, Virginia has no state tax incentives or credits in place like so many other states do. Currently, the Federal government does offer a $2000 tax credit towards the installation of a solar system. Using our present day utility rates as a basis for calculations you find that a solar electric system will pay for itself in approximately 40 years; however, headlines abound with stories of electricity rate increases across the nation. Due to changes in rate structures and fuel allowances due to take place in 2007, electricity in Virginia will get more expensive, thus reducing the payback period. If electricity rates increase as little as 5% a year, a system could pay for itself in as little as 15 years. In a way, a solar electric system can be seen as an insurance policy against higher utility rates.

For most residential systems $10,000 is the minimum cost of a small, turnkey system. A complete system for an off-grid home could cost up to 30 or 40 thousand dollars. In many situations this cost is less than having the utility company run lines to your location.
If you’re considering a gasoline generator for your RV, consider instead a solar electric system to keep your batteries charged and allow for the use of all your appliances except the air conditioner. Your camping neighbors will thank you for not disrupting their camping experience with generator exhaust and noise. Most camper systems are priced competitively with a quality generator.