solar panels
Photo: Laura Moss
A 2.8-kw photovoltaic system provides half the house's electrical needs.
The biggest investment Key Largo, Florida, homeowners John Hammerstrom and Diane Marshall made toward energy efficiency in their eco-friendly home is the 2.8-kilowatt Kyocera solar panel system that adorns their rooftop. The panels, packed with photovoltaic cells, convert sunshine into the electrical current that provides half their household's power needs. The couple's electric bills typically run an affordable $50 per month in the summer, when the AC is kicking, and a measly $15 when it's not.

If you're thinking of following John and Diane's example, there are a few things to consider, including the kind of equipment you'll need. General guidelines call for 1 kilowatt, or 1,000 watts, per 1,000 square feet of house area, but you should work with your contractor to determine the right size for your home. Along with the panels, you'll also need a device called an inverter to convert the sun's DC voltage into usable AC power. Depending on where you live, such a system could cost anywhere from $15,000 to $35,000 installed.

But—and this is a big but—that cost can be dramatically reduced if your local government or utility company offers tax breaks, rebates, discounts, or grants for solar products. For example, Texas's Austin Energy has a rebate program that reimburses customers $4.50 per watt, which ends up covering between 45 and 75 percent of the cost of solar panel installation. And Arizona offers a program that lets homeowners install solar energy devices without any increase to their property taxes.

Going solar doesn't mean cutting ties to your local supply grid. As long as your utility company offers what's known as "net metering," you can plug your solar system into existing power lines, which kick back into service come sundown and on rainy days. If you generate more power when the sun is shining than you actually need, many states let you sell unused watts back to the local utility for a credit, making your electric meter effectively spin backward.

If there aren't any incentives available in your area, don't lose hope. When John and Diane's panels were installed, their local utility had yet to offer net metering, so the couple put together their very own presentation for the utility's board of directors and ultimately convinced them to adopt a net metering policy. They also received a $4-per-watt rebate from the Florida Solar Energy Center, which shaved $11,000 off the cost of the $25,000 system. Taking local electrical rates into account, John estimates he and Diane will recoup the cost of their investment in 12 to 15 years, though payback periods vary depending on local rates, incentives, and rebates.

One thing's for sure: when it comes time to move, solar panels will add to a home's resale value, no matter where you live. In fact, according to the U.S. Department of Housing and Urban Development, home values rise an average of $20 for every $1 reduction in annual utility bills.
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