Wed Sep 16, 2009 2:26 pm
We pay 28 cents per KilowattHour in Maui (and it went up to 40 cents per KwH last Summer as oil went up since we have diesel and do not have coal or natural gas generators at our local utility).
There is a Federal Tax Credit of 30%. There is a Hawaii State Tax Credit of 35%. (you need to check if your state has one)
The "sweet spot" is about $15,000 before residential system tax credit limits kick in (although commercial limits are much higher).
So if you have a high enough tax liablity (i.e. would owe enough in State (Hawaii State income taxes are almost 9%) and Federal taxes to qualify for the credit) the best case is that this system will pay itself back in 4 years at my current electrical rates. That is a fair return - my solar hot water was the same. If there were no tax credits at all and energy pirces do not go up at all, the payback is 11-12 years for my system cost.
I will need to see if the tax credits remain in place next year (Hawaii has to renew it every year, the Federal Credit is good through 2016 at this time) before I can determine how fast I can afford to build the second half of the system.
You need to look at what you currently pay for your electrical power (and possibly consider how new Cap and Trade energy taxes may increase the type of electricity you currently use if enacted) and see if your utility company has the "net meter" or "fee and tarriff" to allow you to connect a "grid tied" system. If you can not "grid tie", then you start adding batteries and charge converters and a bunch of additional expensive equipment that makes this much less cost effective unless you are a long way from the nearest power line.
Your best money is spent in conservation first (switch incadecent bulbs to LED's (or CFL's if the mercury does not bother you)). Add motion sensors. Send your teenage kids to the mainland. Purchase energy effcient appliances, etc and I have done a bit of that already. PV is less cost effective, but as my utilty company is restricting the amount of Residential PV that can attach to each section of the grid, I want to spend a little more and grab a spot while they are still available (in my area they expect to max out next year).
I am putting this on a low interest credit card and when the first portion is paid off (after my tax refund is received), will build the second half. If you can incorporate this into a home equity loan or other low interest mechanism that would also work. I would have reduced my tax withholding at the beginning of the year had I known I was going to do this at the beginning of the year so not to have to wait for the tax refund which collects no interest at all.
There is a glut of PV panels which is the most expensive component (Spain cancelled many government solar projects they had on the books) on the market and electricians need work, so the same phase 1 part of the system that was quoted to me at $24,000 12 months ago is now $17,000. I have shipping to Hawaii and a higher cost of living here, so I would suspect a similar system (2kw) would cost about $12-14,000 at this time in the heartland.
You would need to determine your current (and future) cost of energy, the insolence value of your roof and what tax credits and your tax liabilty to determine your individual rate of return.
