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Solar PV - Evaluating the Investment
For many electrical users, realizing the expense associated with their current habits and appliances is sobering. Before purchasing a renewable energy system, it is important to reduce one’s electrical loads as much as possible through efficiency. 
Something as simple as purchasing a more-efficient refrigerator and installing compact florescent light bulbs can lower the size of the PV array and related components and lower the cost of the solar system. Often, conducting a home energy audit by a qualified professional will help evaluate where money can be invested in energy efficiency.
Purchasing the total electrical needs for the next 20 or so years can be daunting. Fortunately, numerous electrical utility companies offer financial incentives for grid-tied applications. Recent federal legislation removed limits on photovoltaic system installations, paying for 30 percent of the project provided the system is placed in service prior to December 31, 2016. Several state incentives may also be applicable to your situation and location. There may also be local incentives available from local governments. Many of these incentives are searchable at www.rechargecolorado.com.
Between these financial incentives, many systems have been subsidized at 40 to 50 percent of the total project cost. To pay for the balance of the system, many homeowners have turned to home equity-type financing instruments. Clean energy upgrades can provide value to a home, and it is important to visit with your tax and financing professionals prior to engaging in a clean energy investment.
Colorado State University Extension has created an interactive Photovoltaic Financial Feasibility calculator available to download to your home computer for use in Microsoft Excel. This is useful for grid-tied solar photovoltaic systems, providing data on installation costs, home insurance premiums, loan payments, maintenance costs, and home value increase data. Visit www.ext.colostate.edu/energy/solar.html and scroll down to the calculators to download this powerful tool.
For more information, see:
- Solar Photovoltaic Feasibility Calculator – CSU Extension
- Harvesting Energy From the Sun – CSU Extension
Updated Thursday, May 17, 2012