Economic Advantages of Solar Power

Today’s global environment is rapidly demanding increasing amounts of energy, and as fossil fuels are inevitably diminishing this is causing costs of energy to rise. Therefore, solar power is being increasingly utilized worldwide as a renewable source of energy, not only because of its environmental improvements but also for its economical benefits.

Why use PV Solar Power Systems?

economic advantages

A Solar Investment:
Setting up a solar power system in your property can increase its value and can be regarded as an effective investment. The Appraisal Institute reveals that by installing a Photovoltaic solar electric system, value of homes can increase by $20, 0000 for every $1,000 per year saved in operating costs.

Numerous countries are encouraging individuals and businesses to install PV solar power systems in order to improve the efficiency of energy costs. Many are offering enticing financial incentives such as:

Tax Returns:
some state laws allow the price of your solar power system to be deducted from annual taxes.

Solar Rebate Programs:
some areas offer a payment, subject to the size of your solar power system.

Feed in Tariff:
depending on your region, some utility companies offer to pay a specific fee to private generators of electricity.

Net Metering:
this is when your PV solar power system generates more power than you actually need. For example, a growing number of states in the US are allowing PV system owners to sell excess solar generated energy back to utility companies. This allows meters to run backwards, in turn producing credits on electricity bills. Therefore, as energy costs rise, economic returns on solar power systems will also relatively increase.

Federal tax incentives:
There are two types of federal incentives that can be applied. One that depreciates the PV solar system aggressively over a five year period, which is beneficial when it comes to reducing taxable income over that period. The second federal incentive is the 30% business tax credit for PV solar systems which is a 30% tax relief against the cost of the system (up to $2,000 for residential installations.) Both of these federal incentives are especially advantageous for PV systems in commercial use.

State level incentives:
These incentives are mainly dependent upon rebates that compensate the cost of installation. The values of rebates usually vary between $2 per watt - $4 per watt, contributing to approximately 30% of the total system cost. It is important to take into consideration that state incentives vary from state to state. To view the different types of incentives for each state go to: www.dsireusa.org