Considering the advantages of purchasing residential solar, but worried about the impact on your property taxes? Navigating changes to your home’s property taxes can feel akin to navigating a mine field, with any number of traps waiting just out of sight—but fortunately, residential solar isn’t as hazardous as some improvements. And generally, you won’t find yourself […]
Solar power presents one of the greatest opportunities for our world’s energy future. Drawing power from a truly unlimited source, a solar panel system provides you with this access for at least a quarter of a century.
So is solar power really that good? You still have to make the investment in your system, and you may not be sure that your solar panels will be able to soak up enough of the sun’s rays to provide you with all of the power that you need. To help lead to a more informed understanding about the financial benefits of solar power, we will show you how to financially evaluate solar through the Levelized Cost of Energy (LCOE) process.
What is the Levelized Cost of Energy?
The cost per watt measurement system wholly relies on generalized estimates based on the possible market value of energy in a given region. But this does not allow you to consider all factors relevant to the cost of energy. Also, it takes a short-term look instead of considering long term how much an energy resource will cost over the course of its lifetime. Therefore, it is not an accurate enough financial evaluation to allow you to effectively asses which energy resource is the most cost effective.
LCOE is the modern way to measure the relative cost of an energy resource. This is a more effective measurement system because it is designed to consider all relevant factors throughout the course of the production resource’s life cycle. To do this, it approaches the cost of energy from a holistic perspective, instead of trying to keep up with the often unpredictable variations that can occur in the energy market.
Americans love a good bargain, and the federal government offers a handsome one for those who invest in a solar energy system for their homes. The Residential Energy Efficient Property Credit is a tax credit for consumers to offset the costs of purchasing and installing alternative energy devices in their homes. At present, this credit is available to taxpayers through 2016. It is applicable for 30 percent of the total purchase and installation cost of qualifying photovoltaic equipment.
A typical home in the United States uses nearly half of the energy it produces for heating and cooling the home, more than is spent on all other energy expenses for the residence. Find a way to cut these costs to make this work in your favor.
What is Covered
Installing a solar energy system with panels on either a new-build or pre-existing residence qualifies the consumer for the full 30 percent tax credit. In order to meet the program requirements, the home’s photovoltaic system (solar panels) must convert the sun’s light into energy for the electrical supply for the home. Additionally, the system must comply with all state and local electrical and fire code regulations.
Many consumers are surprised to learn that, under most circumstances, labor costs for the installation can be included along with the cost of the solar energy system. Unused portions of the tax credit can also be carried forward to the next year(s) if the credit will exceed the taxpayer’s liability for a single tax year.
To qualify, approved solar equipment must be purchased and installed. Qualifying manufacturers include a tax credit certification statement in with the packaging of the equipment or, in some cases, on their website. The structure being modified must also be used as a residence for the taxpayer, but it does not have to be their primary home. Outfitting a ski chalet or summer beach cottage with solar panels still qualifies consumers for the tax credit. The installation must have been done between January 1, 2006 and December 31, 2016 in order to be eligible for the credit.
We’ve all wondered how to combat climate change and air pollution in our day-to-day lives. Relying on solar power is a great way to reduce your reliance on fossil fuels. Now that solar is affordable and attainable for the average homeowner, many ask the question, “What is the future of solar?”
Historically, the price of solar panels has prevented homeowners from adopting renewable energy on a large scale. Whatever the long-term savings associated with solar, photovoltaics were expensive and many home and property owners were unwilling to take the risk of investing in them. In the past few years, however, panels have become both cheaper and more efficient, so in addition to lower cost, homeowners don’t need to install as many of them to power their homes. Solar is already less expensive than coal and gas power in parts of Dubai, Brazil, Uruguay, and Germany, and the price is expected to keep falling.
Not only have solar panels become cheaper and more efficient, but the cost of installing them has dropped as well. The price of adding a five-kilowatt power system to the average US home fell from $32,000 in 2010 to $23,000 in 2013 even without taking subsidies and tax credits into account. Lower installation prices are largely the result of economies of scale; as more homeowners and developers buy solar panels, the unit price of installing new solar drops. 1st Light Energy has also come up with more flexible purchase plans to make it easier for just about anyone to install panels.
Buzzwords and misconceptions have gotten our species into a lot of trouble over the years, as we fear or find things around us according to information that may not be the most accurate.
Of course, anyone interested in investing in new solar panels should do thorough research, consulting the experts in health and solar energy systems. And as such experts, let 1st Light Energy dispel any health concerns.