Solar Power Heats Up

(Posted By Cyrus)

State and Federal IncentivesHelp Lure Consumers
By STEPHANIE I. COHEN SPECIAL TO THE WALL STREET JOURNALFebruary 10, 2007; Page B2
The race is on to install solar-energy panels in American homes, thanks in part to generous government incentives such as California's $3.2 billion solar initiative, which was launched in January.

Only about 1/30th of 1% of all the electricity produced in the U.S. is generated by solar power. But recent technological advances and a continued decline in the price of solar-power systems are prompting homeowners to ask if this renewable-energy source is worth the investment.
Other states with promising residential solar markets include New Jersey, New York, Arizona and Texas. Analysts say these states are becoming more attractive through generous state rebates, incentives offered by utilities willing to buy back solar power from residents in order to meet state renewable-energy requirements, and natural elements such as the days of available sunshine.

On the federal level, homeowners are eligible for a one-year tax credit for 30% of the cost of a residential solar-power system up to $2,000 through 2008.

But do residential solar-power systems, also called photovoltaic or PV systems, make economic sense? The answer hinges on how much and how fast solar energy can cut a homeowner's utility bills, and on how long it takes to pay off the initial investment to add solar panels to a home.
Consumers considering solar power tend to focus on the upfront costs. Solar-energy systems for homes begin around $25,000, but can go higher depending on the size of a house and the amount of power generated, says Rhone Resch, president of the Washington-based Solar Energy Industries Association, which represents manufacturers.

In New Jersey, a 10-kilowatt residential solar-power system is estimated to cost $77,500. After a state rebate of $38,000 and a $2,000 federal tax credit, the out-of-pocket cost to the homeowner is $37,500. That will provide an estimated annual savings of $1,500 on electricity bills.
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