Should I go solar?

Should I go solar?
Should I go solar? — Nelvin C. Cepeda/Union-Tribune

Sure, going solar sounds intriguing. It's good for the environment and you've heard it can slash your utility bill. Still, it all seems pretty complicated. Here is a rundown on the basics of solar energy:

What exactly is solar energy? It essentially converts sunlight into electricity using solar panels.

Is solar energy only for electricity then? No, you can install solar for both your electricity and gas. However, most homeowners decide to use solar just for the electricity consumption because that is typically the largest portion of their utility bill. Also, thermal solar systems, which are used to replace natural-gas consumption, don't last as long as those designed for electrical use, says Maxwell Dworkin, senior sales manager in Southern California for REC Solar, an installation company. A solar system for electricity typically is guaranteed for 25 years.

How much does installing a solar system cost? That depends on the size of your house and how much electricity you use, says John Supp, program manager for the California Solar Initiative at the Center for Sustainable Energy, a San Diego-based nonprofit. Each solar system is built to meet a home's specific electricity needs. The general rule is a solar photovoltaic system, which provides electricity, costs between $8 to $10 per watt, and the average residence will need about a 4,000-watt system. There are government-sponsored incentives that can drop the cost by more than 50 percent, Dworkin says. He estimates that most systems end up costing between $18,000 to $21,000 after rebates and tax credits kick in.

If I go solar, how much will I save on my utility bill? Again, it depends. Even though your electricity bill might be as low as $5 a month, you have to consider the price of installation when figuring out your total cost savings. Dworkin says that if your electricity bill averages $90 or less a month, installing a solar system is not as attractive of an investment, though it still benefits the environment. If your monthly electricity bill averages between $100 and $150, that's when installing a solar system makes economic sense, Dworkin advises. Another benefit of solar is you lock in current rates, which will save you money in the long run, as electricity costs can increase anywhere between 6 percent and 10 percent a year.

How do the incentives work? There are two separate incentive programs – one from the state and the other from the federal government. California offers a rebate between 22 percent and 25 percent. After the installation is complete, you or your contractor will file with the state. To learn more, go to The federal government will give you a tax credit for 30 percent of the cost of the system. You will have to pay more out of pocket initially but will get the money back when you file your tax returns. One thing to consider is that as time goes on, the rebates from the state will decrease. So if you are waiting for the price of solar to go down in order to get a better deal, you might end up paying more, says Supp.


