Solar Home

Solar Energy System Costs

An average solar system in Southern California usually ranges from 10 and 30 solar panels and an inverter. A Solar Powered Home Could Save $100,000 to $300,000 or even much more in future Energy Costs. You could also protect your retirement by purchasing a solar power system for your home today. Heritage Solar Photovoltaic generating systems are competitively priced. For a ballpark solar estimate for your home that includes State and Federal Rebates, try our Solar Calculator.

Federal Incentive Tax Credit

The Federal Government is offering a 30% tax credit for solar power installations on your home or business. This tax credit, combined with the California Solar Initiative Rebate significantly reduces the cost of a Solar Energy System in California.

California State Cash Rebate

The California Solar Initiative is offering a cash rebate for solar electric systems that are connected to the utility grid. This is not a tax credit. It is a cash rebate. SDGE and SCE manage the rebates for solar electric systems and the exact rebate can be found at the trigger tracker.

Net Metering

Net metering for your solar home measures the difference between the electricity you buy from the utility and the electricity you generate with your solar electric system. When your home solar system is generating more electricity than you are using, like typical summer days, your extra electricity is metered back out (sold) to the utility grid. You receive credit for the solar power at the same rate they sell it to you. Net Metering allows you to use the electric utility grid as solar electric storage system instead of costly batteries. You can generate solar electricity when it is most expensive and use it in the evenings and at night when it is least expensive.

Additionally, the Utilities must pay you for any excess electricity generated.

California Electricity Penalty Zones

During the California energy crisis, the utility companies adopted a complex tiered electric rate structure for residential customers. This rate schedule establishes a ‘baseline’ rate for all usage each month, up to a baseline amount that varies based upon the region in California. Usage up to the baseline amount is charged at one rate and usage above the baseline is charged according to a rapidly ascending tiered rate structure.

Residential customers who exceed their baseline quantities face steep penalty rates.

If you are in Tier 1, paying 11.8 cents per kWh, the cost of running a 100 watt light bulb, 24 hours a day, 30 days a month will be $8.49 per month.

If you are in Tier 5 because you have a large house or a pool, the cost of running the same light bulb is $24.40

California Grid Price Inflation Rate

The biggest savings from installing a solar electric system on your home will be realized in the future years. Data from the California Public Utility Commission shows that average electric rates have increased from approximately 2 cents per kilowatt hour in 1970 to approximately 20 cents per kilowatt hour now. This is an average rate increase of 7% per year.

The most important fact, however, isn’t historical grid price increases but what is going to happen in the future. Global oil shocks will drive the price of oil to $150 – $200 per barrel. Natural Gas prices will rise dramatically causing electricity prices to jump, not slowly, but quickly like a step function. In order to preserve your lifestyle, you will need to invest in solar.

Cost Savings Analysis

The monthly payment on a your home solar electric system is less than the monthly electric bill today. In the future, however, energy prices will rise and the savings will be enormous. The total cash flow savings on a residential system is many times the initial investment.

Additionally, investing in a Solar System today is an investment in your home. If you sell your solar home, you will have increased its value significantly

Solar Home investment for Retirement

For a typical larger home, the homeowner would save far more than $200,000 over the life of a solar powered home. Additionally, the $890 ($10,680 per year) electricity bill would require you to save an additional $267,000 for retirement (based on a 4% withdrawal rate from your retirement fund).

Solar Power for your Home is one of the best investments you will ever make.

Additional Calculators

This calculator is provided by Cooler Planet

PVWatts V2

The PVWattscalculator is proved by the National Renewable Energy Lab (NREL). This calculator is a little more difficult to use and is based on a generic monocrystalline module and 30 years worth of weather data. This calculator outputs monthly energy generation data but is very dependent on the use of proper derates for modules, inverters and wiring.

Solar Home Investment Bottom Line

The modern solar home provides one of the best investments you could make. You will get a better return than stocks, bonds or other investments, and the solar home is safer than cash as it’s value goes up every time the utility raises rates.

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