Green Energy: How Much Could You Save?

This is a guest post from Alban, who is a personal finance writer at Home Loan Finder.   He helps people compare home equity loans.

We all know we should be looking out for the welfare of the planet.  Often times, buying organic, free range, or chemical-free can mean spending more money.  However, when it comes to powering your home, green energy means a more sustainable future.  You enjoy the same power services and reliability for your family, and gain ongoing long term savings for your wallet, and for the planet.

The set up costs of a solar panel system for your home may seem cost prohibitive.  However, when you consider that you won’t ever pay another power bill, and there are also  government incentives and rebates across many states for green energy, installing solar panels may be more affordable than you think.   The US currently accounts for around 8% of the world solar power market, but with these savings and incentives, that figure is expected to rise to 25% by 2013.

Cost of Electricity

You probably know how much your family spends on electricity, but can you relate that cost to your actual power usage?  Your  home computer uses more than 500 kWh of power per year, and cooking can cost you almost 600 kWh per year.  Take a look to see what you’re being charged per kilowatt hour for power in your state, and at different times of the day and year.  Electricity can cost between 12 c and 50 c per kWh, even from the same provider.  Therefore, look at your utility bill, which will usually show what you are charged for each kilowatt hour and the different rates applied for different usages.  The typical American household uses around 11,000 kWh hours each year, which equates to an average yearly power bill of $1,600.

Cost of Solar Energy

The cost of solar energy is in the conversion, and as with many things – once you make the leap, you never look back. A solar electric system for your home can cost around $20,000, but that price is rapidly decreasing because of an increase in demand and government rebates.

For example, the typical family home would need a five kilowatt solar system on their roof to support their power needs.  While the original price for such a system is around $40,000, state incentives can bring that system down to just $22,000.  However, by the end of 2010, prices are expected to drop so significantly that even without the rebates, the same system would cost just $25,000, or $13,000 with the incentives.

Types of Solar Power Products

The type of solar power products you need for your home depends on your power consumption, and your location.  For example, if you want to run a cabin in a remote location on solar power,  it would be cheaper than running a home in the suburbs, as you do not have to pay to connect to the power grid.  Alternatively, if you want to target your solar power usage to certain thirsty appliances, you can purchase portable solar panels which are powerful enough to run a computer for example. These portable systems can cost between $700 and $1,000.

Using a solar hot water system can also help you cut down on another often significant household bill.  Depending on your family’s hot water consumption, a $5,000 solar hot water system can reduce your hot water bill by 50% to 100%, paying for itself in around three years.  You can also buy prefabricated solar power systems to heat your swimming pool or hot tub for just a few hundred dollars, so you don’t have to miss out on luxuries when money is tight.

To install solar panels on your roof, you will need a south facing area of your roof which is not obstructed by trees or other buildings. Your roof will need to be in a good condition before mounting your solar panels, and if you do need to replace the shingles on your roof after your solar panels are installed, you will need the installer to remove the roof mounts. At the same time, your roof remains safe and undamaged with solar panels installed, but if you’re worried about your roof, or your roof does not have the necessary orientation, panels can also be mounted on the ground.

Choosing a Solar Provider

Getting value and making meaningful savings from your green energy products doesn’t only happen when you receive your next power bill, it comes at the time of purchase as well.  If you choose a reputable and experienced provider to create and install a solar power solution for your home, you’ll have the most effective system to make you the most savings, and you’ll be paying the right amount from the beginning.

To choose the best solar power provider:

• Look for a local company. Choosing a local provider and installer means you are getting someone who is familiar with homes and structures in your area, as well as weather and sun conditions.
• Compare on a level playing field. While the upfront cost must be good value, don’t automatically opt for the cheapest system. Be aware that each company could be quoting on different products so make sure you’re comparing prices for the same products and after sales services.
• Understand the systems. Look at as many brochures and cataloges as you can, even if you think they don’t have the products you want. The more you know about solar power systems, the better prepared you are to judge the right provider and the right products for your needs.

As green energy is a relatively new service industry, you may not know about the qualifications or information a provider is required to have. Therefore, ask your solar energy dealer:

• About their renewable energy training certification.
• About the experience and how long they have been in business.
• What they know about zoning and electrical requirements and codes.
• About the details of your local, state, provincial and national incentives.
• For a list of references.
• About their services after installation, such as updating manuals and cataloges as new products and technology are released.
• For background testing information about the equipment.
• If they are members of trade organizations.
• About warranties offered with the products.
• The payment methods and plans available.

Solar Code

Before you are able to make savings with green energy, you also need to make sure that your local code requirements and zoning allow for the installation of solar panels. While US laws are mostly in favor of solar energy, there are some areas of the community who resist the installation of paneling on homes.

Solar power system installation falls under The National Electrical Code’s Article 690 in most local jurisdictions, but you will need to make sure you work with a solar provider who is familiar with local exceptions and laws.

Also keep in mind that any restrictions which are in place are usually there to protect you, and cover instances such an excessive roof loading and improper wiring – another reason to carefully research your solar supplier.  While in some cases, resistance may come from community groups or home owner associations, knowing that most states and municipalities encourage the use of solar power can help you fight to change these restrictions.

From Kris:  What do you think?  Do you currently use solar power to power your home?  Have you ever considered installing a solar system?  If you use solar power, is it working well for you?

Tagged as: energy savings, green energy, solar panels, solar power