Solar energy has been available for many years but cost prohibitive until recent years. Even today the payback on solar systems is not there without the help of incentives and tax credits to reduce the overall cost. The payback with incentives included usually figures to about ten years.
If you are interested in renewable energy, such as solar power, then you will want to do some homework on the type of system and financial costs associated to purchasing and installing. This article will provide some key points to consider as you explore your options.
Sales Representative – A sales representative from a company providing solar systems may be a good resource for understanding what options are available. Remember, however, the sales person is trying to sell you on the positive aspects of the system so it will be up to you to look for the potential pitfalls.
Utility Company – Be sure to ask your energy supplier what special requirements they have to connect a solar system to the utility grid. These requirements can be an expensive extra cost if not considered upfront as part of the system package. You will also need to know what the ongoing charge will be for the connection to the grid (often referred to as the innerconnection fee) and if you plan to sell back extra energy what payment will be provided for such.
For Alliant Energy customers more information can be found on their website. Customer-Owned Generation in IOWA
Insurance cost – As part of the connection to the electrical grid the utility company requires additional insurance. You will want to consider this additional ongoing operating cost.
Rebates – Some utilities do not have any rebate program. Check with your utility company for details on what incentive programs are offered for the type of system you are planning.
Iowa Property Tax Exemptions – The added value to the property by the solar system is exempt from property tax for 5 years.
Income Tax Credits – There are different tax credits available in Iowa. More information is available from U.S. Department of Energy site DSIRE. Tax credits reduce the amount of your tax payment by the amount of the credit. Some refer to this as a dollar-for-dollar reduction. But remember, tax credits only apply if you owe taxes that exceed the amount of the credit. There may be limitations on carrying the credits over to the next year so that needs to be considered as well.
Check with your tax adviser to fully understand how these tax incentives may apply to your financial situation.
Lease vs Purchase – Some companies will offer a lease plan instead of ownership. In a lease type agreement you will have to forfeit any rebates or tax incentives to the lease provider and pay monthly fee to lease holder. You will want to compare the monthly lease fee to the expected reduction in utility cost to determine financial benefit. The savings per month may be minimal after lease payment.
Turnkey system – Unless you are very familiar with solar systems and construction requirements you will want to purchase a turnkey system to ensure everything is included. You do not want to have to dig more money out of your pocket for unexpected expenses.
Solar Panel Mounting Options – There are two basic types of mounts: roof or ground.
Roof mounts are usually cheaper to install but are harder to repair, also you want to take into consideration the condition of your roof–would suggest that your roof be expected to last at least 25 years. Some roof configurations and sizes are not suitable for mounting the number of panels needed. Also roof mounts are harder for firemen to fight a fire and they are somewhat hesitate to be around the solar panels.
Also snow will build up on roof mounts more than ground mounts–when snow covered the panels produce very little energy. The snow will melt off when the sun comes out if there’s only a small amount. Normally the ground mounts are at a steeper angle and the snow doesn’t stay on them as well, or you can sweep the snow off the ground mounts.
Ground mounts require additional mounting structure which may increase installation cost over roof mounts, but do provide for easier access to the system and greater flexibility. The quantity of panels is generally not limited to spacing constraints, unlike roof mounts.
Power Outages – For solar systems that connected to the grid, when there is a power outage the solar system is also out. Simply put, don’t expect the solar system to perform as a backup power source. A separate off-grid system with storage batteries would be required to provide backup power during power outages. Other backup power solutions are available; discuss with your installer or electrician for options.
Get References – Don’t be afraid to ask questions, get names of others in your community who have done it and talk with them. Find out their experiences.
If you have solar system questions please contact McGill’s Repair and Construction at 641-437-1086 or submit request for quote.
Thank You,
David McGill
James McGill
Article written by Tim McGill, editor@Tree Branch Publishing. (Solar system house image courtesy of xedos4, Published on 30 October 2012 at FreeDigitalPhotos.net)
