"We got solar panels."
Tom Hammer and Sueling Cho, Los Gatos, California

How They Work: Solar panels are made up of photovoltaic cells that contain semiconductors, which absorb the sun's energy and turn it into electricity. The cells are encased in a protective film, and the panels are typically framed in aluminum and topped with glass. If the system is designed and installed correctly, the panels will produce most, if not all, of the electricity your house needs—at no further cost.

What These Homeowners Did: Three years ago, Tom and Sueling hired a professional installer to put 24 solar panels on the roof of their 2,900-square-foot ranch house. Made by SunPower of San Jose, California, their 4.5-kilowatt system took about a week to get up and running. It generates enough electricity to supply nearly all their needs. When it's too cloudy or dark to generate enough of its own electricity, the system draws from the grid; when it generates a surplus, the meter spins in reverse.
In the end, the couple pay their utility company about $500 a year, a 75 percent reduction. After installing the panels, they switched to a plan that offers cheaper power during off-peak hours, contributing even more to their overall savings.

What They Learned: "In summer, where we live, the panels need to be washed on a regular basis to get the dust and grime off or they lose power," says Sueling, who takes turns with her husband climbing up on the roof with a hose every six to eight weeks.

Keep in Mind: Installation is expensive, and the economics depend partly on where you live; some areas are sunnier than others, and some utilities charge more than others. Government subsidies can help reduce initial costs.

Payback Period: 13 years
Their Cost: $26,000, installed, after about $15,000 in state and federal tax credits and rebates
Yearly Savings on Household Electricity: $2,000
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