April 3, 2024

Harnessing the Sun: Exploring solar power

In recent headlines, scientists announced the achievement of basic nuclear fusion ignition, a big step toward mimicking the Sun’s method of generating near-limitless energy by creating larger atoms from smaller ones.

Until we perfect that process, today’s solar panel technology already allows homeowners to harness a portion of the Sun’s resources. Clean and green, solar power generates electricity without harmful greenhouse gases, greatly reducing a household's carbon footprint.

Beyond the environmental aspects, solar power systems rely less on grid power and may allow homeowners to sell excess solar energy to the power companies. Once installed, solar panels require little maintenance and have low operating costs.

By generating their own electricity, solar homes can mitigate energy price fluctuations. The potential to reduce or eliminate future energy bills would seem to make solar power a no-brainer.

But solar economics are a little more complex. The upfront cost of purchasing and installing solar panels can be a significant barrier. Initial investment can be prohibitively expensive.

Financing may be worth considering. Interest rates can vary depending on factors such as the loan amount, duration, and borrower credit.

Government incentives such as tax credits and rebates are also available to help. The federal Inflation Reduction Act (IRA) of 2022 provides tax credits on as much as 30% of the installation. Other federal, state, lender and utility incentives are also available. Going solar is a big decision. Don't feel committed to the first quote:
Installation and equipment prices keep dropping, and the IRA incentive is available until 2032. *

Many solar companies offer leased equipment to reduce initial cost. Leasing is generally more expensive and removes the homeowner eligibility for the IRA credit. Leasing can present selling challenges down the line, so weigh the pros and cons. Compare payments with existing bills payments and make sure you understand what maintenance and repair requirements are.

There are other considerations. Solar panels require ample space for optimal efficiency. Homes with limited roof space may not be suitable and some homeowners find solar panels unattractive. Striking a balance between energy efficiency and visual appeal can be a challenge.

And solar panels rely on sunlight. This can pose a challenge in regions with frequent cloud cover or limited sunlight, and, of course, at night. It is possible to store excess energy and power your home 24-7 with a solar battery, but this is another significant expense.

In some jurisdictions, power companies buy excess stored solar energy through a process called net metering. Rules and regulations vary. Other homeowners may choose a backup generator.

Solar homeowners can also choose to stay connected to the grid, drawing power from regular sources during limited production. Usage is billed from the local utility company.

According to the Solar Energy Industries Association, new residential installation grew by 40% in 2022, with a record 700,000 homeowners taking the solar plunge.

* Before installing solar, homeowners should always consult with a tax professional first.