Incentives for Home Solar Power

Many people see the positives of solar power: can be installed at almost any scale, ease of setup and connection to the grid, and the ability to provide clean renewable energy. Unfortunately they also see the one main drawback: the extremely high initial cost. Installation of photovoltaics can range in cost from $10,000-70,000 or more depending on system size and where you live. For solar power supporters and communities who want to make a change in how their energy is supplied, coming up with measures that make solar power more affordable is key.

In Gainesville, Florida the community leaders there are taking a step in Europe’s direction. Since the early 1990’s countries like Germany and Spain have implemented a financing system that has made them leaders in renewable energy, most notably solar and wind power. The idea is simple. Homes and businesses are paid higher rates for their renewable sources than the typical cost of coal. In some places in Germany residents are paid up to four times the rate of coal power. “The new payment method is referred to as a “feed-in tariff” in Europe. It is, in essence, a mandate by the government telling a utility to pay above-market rates for green electricity. It shifts the burden of subsidizing green energy from taxpayers, as is common in the United States, to electricity ratepayers. And the technique includes assurances that a utility will pay the high rates for a long period, often 15 to 25 years” (2). This system coupled with national tax credits, state rebates and even local credits makes the system extremely affordable. The idea is even gaining momentum in places like Canada.

Another possibility has its roots in California. Called “municipal financing”, the idea lies in the fact that the initial cost of the photovoltaics will be attached to the home, much like gas or water lines would be financed. In this program good credit is not required and thus any homeowner would be eligible. This program also overlaps with several other benefits: California residents receive a rebate of 20% of the cost of the system and thanks to the new stimulus bill a federal tax credit of 30% is extended to anyone. This program has taken off in other states such as Colorado, Texas, Virginia, Arizona, and many large cities are developing their own programs.

While both programs have promise, I believe that municipal financing has a better future. One of the largest issues with Americans is how much they move around. Only the municipal financing tackles this issue. No longer will studying and calculating the payback period be such an important issue, if the homeowners know that the cost of the photovoltaics are attached to the house and any future owners. In essence the biggest risk, the cost, has been extremely reduced. Aas long as the trend of decreasing costs of photovoltaics coupled with renewable energy incentives in the form of tax credits and rebates continue, the future for solar power looks bright.