Friday, May 22, 2009

Solar Panels and the Existing Homeowner

Recently, I have been researching solar panels for my house. As an environmentally conscious person, I have always had an interest in what solar power could provide for our home, but never had the opportunity to make such an investment. Fortunately, the combination of today’s low interest rates and our ability to refinance gave us the opportunity to start researching our options.

Once I started my research, I quickly found out there were several different types of panel manufacturers and companies in the area that do turn-key installations (complete design, permitting and installation by one company). There are also two different systems available - one for hot water and one for electricity. Considering I had just bought a new 40 gallon hot water heater when we moved in (2.5 years ago) and only my wife and I live in our home, we chose to only research the electrical panels for right now.

Since we are big fans of carbon neutral living we knew the answers to why we wanted to do this (both personal and global). The big question was IF we could do this, and that unfortunately revolved around the initial investment and operating cost. Although ballpark estimates from 3 different companies were all somewhere around $20,000 to $25,000 for a typical house, all the present tax incentives provided by our state (North Carolina) and the federal government would have us paying for less than half of that in the end. The state and federal each allow for a 35% and 30% tax write off that can be taken advantage of for up to 10 years or until the dollar amount runs out. The system we chose would provide the typical homeowner with about 50% if their energy used.

We were excited to find out the system would generate close to 80% if not 100% of our typical use (depending on the time of year)!

With the help of adding money to our refinanced mortgage (lower interest rate & tax write off), we are going to be able to keep our mortgage payment essentially the same and use the additional tax return to pay off the loan. This basically leaves us taking almost nothing from our personal savings in order to install the system.

To top it off, our solar panel system will actually make us money each month by selling the collected power to the power company as opposed to having batteries on site. (Check out Duke Energy and NC Greenpower for more details.) Overall, we are coming out ahead of the game with extra money each month and we are using less fossil fuel to help save the environment!

The three companies we talked to were: