I’m all for clean ways of creating power, especially when it can be done at home. One possibility is installing a home solar power system. The problem is solar panels are not cheap, they are not efficient and only a few select locations will provide the means to recoup the cost of purchasing the system due to local climate (amount of sunlight) and electric company incentives.

There are quite a few things one must purchase and install before you can begin harvesting the power of the sun. For a very basic system, you will need solar panels, roof mounts, combiner box, DC disconnect switch, and a grid-tie inverter. The invert will take the direct current produced by the solar panels and convert it into a pure sine-wave AC signal that can be used by the electric equipment in your house. You can install this yourself, but it will require a permit from the city and approval from your electric company. Please be careful.

The above stuff will get you going with a very basic system. You can also add batteries and an electrical sub-panel, but this can greatly increase the cost of the system very quickly. Perhaps this biggest expense will be labor. You can save a lot of money by doing it yourself. Here are some estimates on the materials needed for a basic grid-tie system:

• Grid-tie Inverter = $2500
• Mounting Hardware = $600
• DC Disconnect Switch = $300
• 180-watt solar panel = $1000
• Installation Costs = $1000+

Now obviously a single 180-watt solar panel is not enough to make the system worthwhile. That won’t even power two 100-watt light bulbs let alone a TV, DVD player, refrigerator, microwave, dishwasher, lights or a vacuum cleaner. So you will need to buy about 8 or 10 of these 180-watt solar panels at an average cost of $1000 dollars for a bare minimum system. Add all this up and a very basic solar power system for your house is going to cost about $12,000 dollars. In reality, you will most likely need a 4-kilowatt system or more which will run you about $30,000 dollars. To get an idea of how many solar panels you need, take a look at your last electric bill. Somewhere you will see how much power you used and it will be measured in Kilowatt/hours (kWh). As an example, our home only averages about 650 kWh a month (no air conditioner and energy conscious). To calculate how much solar power our home would need to produce in order to break even I’ll use the following equation:

• 650 kWh divided by 30 days = 21.67 kWh a day
• Figure 9 hours of sun on a good day (Very optimistic)
• 21.67 kWh divided by 9 hours = 2.4 kWh solar system

That may not seem like a lot, but there is one major draw back to solar panels. They only generate electricity during the day when the sun is shining. When you take into consideration that we are away at work or outside doing other things during the day when very little electricity is being used, the solar panels aren’t doing us much good. Most people use a vast majority of their electricity at night. That’s where the grid-tie inverter and spinning the electric meter backwards comes into play.

This means we have to push 2x as much electricity back onto the grid to match what we use (break even). Also, electricity is cheap in our state compared to other parts of the country so it makes it even more difficult to recoup costs. However in California and Hawaii, the electric companies have a 1-to-1 ratio of spinning the meter backwards which means you recoup electricity costs quicker and electricity in both states is relatively expensive compared to other parts of the country.

To expand on the previous example, let’s say I was interested in how long it would take to recoup the costs of purchasing a home solar powered grid-tie system in Colorado. Because no one is home during the day, we use little to no electricity and all the electricity my solar panels produce would be used to spin the electric meter backwards. Let’s also assume my electric company’s half price payback on spinning the meter backwards and the 9 hours of sunlight a day (which again, is extremely optimistic but I’m doing this to prove a point):

• 2.4 kWh a day X $.05 cents per kWh X 9 hours = $1.08 a day
• $1.08 x 30 days = $32.40 a month
• $17,200 (cost of a 3-kilowatt system) divided by $32.40 = 531 months
• 531 months divided by 12 = 44 years to pay off

Most people don’t live in their house 5 years let alone 44 years! So the other thing you need to take into consideration is how long will you be living in the house you purchased the solar power system for? If the answer is less than 10 years (even in California and Hawaii), forget it. You simply won’t recoup the cost of purchasing the system in that amount of time. Even 20 years is optimistic in the most ideal locations.

The next question you need to ask yourself is, what’s your weather like? The example I’ve been working assumes every day produced 9 hours of full sunlight. This won’t happen anywhere. As a best case real-world scenario, let’s say we lived in the Arizona desert which averages about 85% of all possible sunlight. We would have to cut back on the power production derived above by about 15%, so my 44 year payoff estimate is more like 50 years (if we also assume electric rates are the same).

UPDATE: At this time, the Federal government is providing a 30% rebate on all solar and wind powered home systems with no upper end cap. That means, you can spend as much as you like, and you will receive a 30% rebate on the total cost of the system. Also, check your State and local electric company, as they too might be offering incentives. Together, you can save up to 50% the cost of system (at least in Colorado as of 2011).

Here’s another thing to think about, and this may sound counter-intuitive. If your electric company has a power outage, your solar panels will not power your home. In order to do this, you would need a battery backup system, an additional electrical sub panel, and you’d have to move any circuits you want powered by your solar panels and batteries moved to the sub panel. only the circuits on the sub=panel could be powered by the solar panels and the batteries.

Now, if you are serious about solar power, you are in a great geographic location, you don’t care about the costs, and would like to help protect the environment then you might want to make your home as efficient as possible before pricing out a solar power system. If you can replace electric range stoves with gas, use Energy Star appliances, and turn off lights when they are not in use, you can cut back on your electricity usage by about 15% which means you won’t need to spend as much money on solar panels. I’d stay away from the compact fluorescent light bulbs due to environmental disposal concerns.

So as nice as it would be to have a solar home, solar power is only cost effective in certain parts of the country where energy costs are high, the electric companies spin the meter backwards at a 1-to-1 ratio and there is plenty of sunlight. Even in these locations it can take upwards of 10 to 20 years to recoup the costs and very few people live in their house for this length of time. If this isn’t the case where you live, then I’d stay away from solar power as you will never recoup the costs of the equipment and it will be a money-pit of an investment. Wind power is another option, but it too has its own limitations.