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2/12/09

The cost of a solar home | Solar Home Costs

I have done previous posts that are in depth on the The Costs of Solar power | Solar Power Cost For a Home and Cost of Solar Panels | Cost of Solar Power Systems. When I review how people | companies have been analyzing the investment into solar power, they do it in such a complicating way that I am going to do a repost and try to simplify the justification into the investment. Please comment if you see this helped or confused the issue. People tend to ask "How much do solar panels cost", How much does solar power cost; What is the cost of solar energy; or how much does a solar panel cost.

I believe this is the wrong way of looking at it. The true way to answer the question of whether solar power is a good investment for you is to ask "Will I see a profit in my solar power investment over a time period that I am comfortable with." If you treat it like a business proposal, it makes much more sense.

Here are my assumptions:
Your electricity cost per year: $1,200.00
Electrical Costs / yr Increase: 3%
Location: San Jose, California
Money: Home equity Loan: 20 Year Loan, 7%, 20% down payment.

Obviously if I own a solar him in San Jose, California as in my example, it is a prime location and presents an optimum scenario. The first price is the cost of the solar energy system. The second are the solar tax credits for both the state and federal solar programs. As you can see, what you are left with after a $24,000 dollar system and tax rebates is a solar panel and solar energy system of $14,000. So what next? Well look at your energy bill savings.

You are saving approximately $950.00 per year on the system. So at the very very rough level, it will take you 14 years to recoup this investment. In more specific terms, because you took out a loan, you will save roughly 25 dollars per month in electricity during the life of the loan and by the year 2020, it will be 50 dollars per month. It also has a great resell in case you are worried about moving before you recoup your savings. Any questions or comments, please let me know!