HOW
SOLAR WORKS
Media
Fact Sheet
The general concept
of solar is simple enough. A sun-powered electric system consists
of panels made of laminated silicon solar cells placed between tempered
glass and plastic. Sunlight striking these panels creates a direct
current, or DC. Because most homes operate on alternating current,
or AC, the direct current is channeled through inverters that change
it to an alternating current. Excess power produced during low use
periods of the day are used later or even sold back to the power company.
The size of a
solar electric system (measured in watts or kilowatts of energy production
capability) depends on the number of solar panels. The number of panels
needed is determined by the electricity usage of the home or business,
and the amount of electricity the owner wants to offset with the system.
Solar electric systems, which are most commonly installed on roofs
but can be placed on a variety of different structures, can be as
small or as large as desired.
The system can
be designed to produce all of the power consumed by the home or business,
thereby eliminating the electricity bill altogether or it can offset
only a portion of the bill. A common misconception about solar electric
systems is that the systems don't produce enough electricity during
cloudy or foggy days. However, because solar panels utilize the entire
visible light spectrum they will continue to produce some electricity.
Net metering,
an agreement between the utility companies and owners of solar electric
systems, also contributes to the affordability of solar electric systems.
Under net metering, any excess electricity produced by a system is
fed back into the utility grid and credits the customer for the energy.
When this happens, the customer's utility meter reflects the credit
by rolling backwards instead of forward. Because it reduces reliance
on finite and pollutant energy sources like oil, solar energy cuts
down on carbon dioxide emissions. It is this reduction in emissions
that has earned solar electricity its environmentally friendly reputation,
and has prompted many to investigate solar electricity.
Not only does
solar electricity provide customers with the personal and national
security of knowing that they are less reliant on fossil fuels but
it also provides protection against the price increases in utility
company electricity. With an ever-increasing population, rising costs
of natural gas, electricity distribution issues, and increased demand,
utility companies are sure to continue to raising the price of their
electricity.
THE PUBLIC
DEMAND FOR SOLAR
Awareness of the advantages of solar energy is growing rapidly.
A Roper survey of 1,004 adults conducted in May 2006 showed:
79 percent of
Americans want home builders to offer solar power as an option for
all new homes.
84 percent of
Americans ages 25-49 supported solar on new homes; 69 percent of those
over 65 agree.
After being told
that solar homes have a proven higher resale value, 64 percent would
be willing to pay more for home with a solar system.
73 percent believe
that solar energy is more important than ever.
42 percent say
that saving money on monthly utility bills is the most compelling
argument for installing solar power. Other respondents indicated it
was to decrease the nation's dependence on oil (31 percent) or reduce
environmental pollution (18 percent).
FINANCIAL
BENEFITS OF SOLAR ELECTRICITY
Most businesses
and homes are able to purchase a solar power system thanks to the
incentives and aid offered by the federal government. In Massachusetts,
residents that install these systems are also eligible for rebates
from the Massachusetts Technology Collaborative AND state and federal
tax credits. In addition to the tax credits and environmental benefits,
a US Solar system is expected to significantly reduce monthly utility
bills.
The average six-cent
price of a solar kilowatt hour is less than half the average 14.5
to 15-cent rate of a utility company's power rate. With the installation
of the system, most companies can expect to payback the price of the
equipment within five to six years.
For many consumers,
the most appealing aspect of solar is locking in their cost of power
over the long term. In a future energy crisis you will be immune from
the cost increases if you have a solar system. This is great news
for those who anticipate or are already living on a fixed income.
With a solar electricity system, even as electricity costs increase,
home and business owners will not have to worry about increased utility
bills. There are several studies that indicate every dollar saved
on your utility bill with a solar electric system will increase your
overall home value by twenty.
It is estimated
that $1,500 in annual electric bill savings from solar will equate
to $30,000 in additional resell value. In today's increasingly tight
housing market, a solar electric system helps set a home apart from
the others in the neighborhood. A home with a fixed electric bill
from solar is "cheaper" to live in, and thus is very appealing to
potential buyers.
THE PAYBACK
ON SOLAR
At today's
current electric rates, a typical system takes between 8-12 years
to pay for itself in savings (this does not take into account the
added resale value the system gives to your home). However, as the
electric rates continue to increase the payback time will also shorten
significantly. The current rebate from the MTC offset about 30% of
the out-of-pocket cost in Massachusetts.
The federal tax
credit for homes is capped at $2,000 for residential homes. Business
incentives can offset out of pocket cost by as much as 70% when the
(5) year depreciation is included in the savings. For commercial systems
in all states, in addition to incentives and rebates offered by the
state, the federal government offers a tax credit for 30% of the system's
total cost.
