What You Need to Know About Installing and Financing Solar Panels on Your Roof

The following photos show a vacuum tube solar thermal system mounted on a roof.

There are other types of solar thermal systems that use black pvc plastic tubing to heat water using sunlight. This eliminates the need to burn fuel to heat water. Therefore, solar thermal is a great option for reducing your carbon footprint.

Solar thermal systems are used widely across the globe are typically much cheaper than silicon-based photovoltaic solar cells.

2. Photovoltaic (PV)

We typically think of PV solar panels when we want to create electricity from sunlight. We've seen this technology for years in our watches and calculators and more recently witnessed solar coming to market through rebates and subsidy programs offered at the national, state, and municipality levels.

You can find reputable installers of solar systems on Angie's List.

On the Grid or Off the Grid

There are certain cases where the price of electricity using a solar PV system can be competitive with purchasing it from a utility. For example, when electricity is needed in an area that is not connected to the electrical grid (e.g., remote farm or a small island), then you may find that it is cheaper to use a photovoltaic solar system because extending the grid infrastructure is too expensive. 

Are Your Utility Rates Really High?

Solar PV can be price competitive when the electrical utility rates are extremely high. This can happen if the utility's electricity generating facilities are really small and far away or the utility operates in a highly regulated environment that drives up prices. Furthermore, if your utility is an unregulated monopoly, then prices can be artificially high.

How Much Does a Solar System Cost?

To price range to put a solar system on your roof that generates somewhere between 5kW and 8kW is roughly $35,000 to $75,000. The pricing depends on the size of the system and the structure of your roof or land where the system will be installed.

To get an exact price for your particular situation is impossible without getting a bid from a licensed solar panel systems installer (Try Angie's List). You can usually get a list of reputable companies from your chamber of commerce or utility website.

Federal Tax Incentives

Federal programs like the Department of Energy Residential Renewable Energy Tax Credit have been very successful in stimulating the growth of the solar market. Here is the text from the Department of Energy website outlining the rules of the program:

"RESIDENTIAL RENEWABLE ENERGY TAX CREDITS

Consumers who install solar energy systems (including solar water heating and solar electric systems), small wind systems, geothermal heat pumps, and residential fuel cell and microturbine systems can receive a 30% tax credit for systems placed in service before December 31, 2016; the previous tax credit cap no longer applies."

The 30% rebate guaranteed by the federal government is essential to drive the market for distributed solar systems at the residential level forward. However, even at a reduced price it is still typically not competitive with electricity cost at the scale that coal and natural gas fired power plants operate. To lower the payback period of solar systems additional rebates and programs are available at the regional and municipality scale.

Regional and Municipal incentives

The best way to check if incentives are available where you live is to look up your region, municipality, and utility company on the Data Base for State Incentives on Renewable Energy.

There are many types of subsidies available, but subsidies are not available in all areas. One must read about subsidies in detail to understand the exact percentage discounts or rebate application timelines. Many solar firms will handle the rebate math and applications for you and will include these discounts in any bids they provide.

One type of subsidy that can be offered is called a feed-in tariff. In the case of a feed in tariff, the utility pays you an inflated price (higher than the market value) for the electricity that your system generates and puts back into the main electricity grid. One example is the Gainesville Florida's Feed-in Tariff Program. This program maxed out on permits for projects the day it opened!