We had lots of questions.
To begin with, we weren’t even sure what the term “going solar” meant, not to mention other industry terms like, “off the grid”, “grid tie”, “net metering” and “dual metering’. Did we want to eliminate our electric bill entirely or just reduce it? Would we need a battery backup system to cover our energy needs during cloudy days, nights and power outages?
By doing a web search, we learned that:
“Going solar” referred to the generic concept of using the sun to supply energy which traditionally was supplied using fossil fuels. This idea covered two major areas. Passive solar systems, which includes concepts like heating water and living space with the heat of the sun, and active systems which use the sun’s energy to create electricity through photovoltaic action (PV systems).
“Off the grid” means meeting all of your personal energy needs locally from sources like wind, geothermal, solar, gasoline generators, propane, etc. and not being connected to the power distribution grid. It does not necessarily imply the use of renewable energy, or that there will be adequate energy available to supply all the energy that you might normally use while connected to the power company’s grid.
“Grid tie” refers to the connection between a photovoltaic system and your main breaker panel, to supply power to your house, along with a connection to your electric meter so that you can sell excess power that you produce back to the utility.
“Net metering” and “dual metering” are terms associated with compensation for excess power that a residential customer sells back to a utility company.
Net metering is...
For us, there were 3 major considerations that affected our decision.
1) The rising cost of energy.
2) The decreasing cost of implementing solar energy systems.
3) Our concern for the future of the planet.
Like many Floridians, we live in an all electric home. Over the past few years the cost of electrical energy has been increasing, and probably will go up steadily in the foreseeable future.
BASELINE: THE RETURN ON NEAR "0" RISK INVESTMENTS
In March 2008 the average investment in CDs or other money market instruments is offering a less than 4% return. An investment of $100,000 in one of these instruments will earn only about $4,000 a year.
Although there is currently no Florida income tax, any money that’s invested outside of a retirement plan is subject to between 15% and 25% federal income tax.
Applying even the lower percentage, that $4,000 only nets about $3400 in actual spendable dollars. That equates to a 3.4% return on our original investment.
When you consider that you initially had to earn over $115,000 in gross income to produce the $100,000 to invest, your return drops to only about 3.0%.
ESTIMATING THE RETURN ON OUR INVESTMENT IN BECOMING "GREENER"
Some of the factors that entered into our calculations were: 1) How much energy...