We are planning a new home (still 2-3 years out). Is solar a viable (cost-effective) solution?


We are planning a new home (still 2-3 years out). Is solar a viable (cost-effective) solution?

Asked by Richard G

Building a home in Tallahassee, FL. Looking to go very energy efficient. I have been told that it's still cost prohibitive to go solar. We want to have a small energy footprint. We are looking at: high SEER AC, whole-house ventilation, renewable materials, etc.

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Florian Speier's picture

The viability of solar depends largely on the amount of government incentives and utility rebates on solar power (currently the federal tax credit alone is 30%).

  • This is somewhat hard to predict for a few years out.
  • At the same time, the cost of solar panels is falling as they become a more and more mainstream product.

There are websites that can give you a good estimate of cost and payback periods (such as 1bog.org), but you have to remember:

  • Most of these payback calculators don't account for the time value of money, that is, that a $100 savings in five years is worth less than $100 now (due to inflation, etc.).
  • The other problem is that no one knows exactly how much energy will cost seven years or so out, so your payback may be faster or slower due to that as well.

Solar is, however, not the lowest hanging fruit in regards to energy savings. A good architect or designer will be able to make you a graph or a list which measures what will generate the biggest energy savings per dollar invested.

  • Window orientation and quality, overhangs, green insulation, tightness of construction, compact building form, solar water heating, and reflectivity of the roof surface are just some of the items that may very well offer more energy savings for the investment than solar panels.
  • I usually evaluate all these options for my clients first, especially because most of the above items cannot be added to the house at a later point, while solar is really an add-on.

If the budget still has room for PV (solar) panels, that's great. Otherwise, there is also always the option of a solar lease. With a solar lease, you do not have to put money down, but the solar company installs and maintains the panels and covers all the upfront costs. In return, they will bill you monthly for the energy used, so you are paying the solar company rather than the utility. Most leases are structured so that you pay around 10% less for your power this way.

For more information:

Read Evan Little's Q&A "When we purchase a home I would like to upgrade to solar. What does it take and how much does it cost?"

You should also read Rick Williams's Q&A "What are the best choices for solar finance, or an energy efficiency loan, now that PACE is unavailable?"