Solar panels are devices that convert light into electricity. Solar panels are dropping in price, but they still are not cheap, so if you're switching to solar it's a great time to also carefully evaluate your electricity use. Call your utility company and get an “energy audit” and follow the recommendations. Most homeowners can cut their use of electricity or gas by anywhere from 5% to 30%. By cutting your power usage to an absolute minimum you can purchase only the expensive solar panel capacity that is required for your home. PV (photovoltaic) solar panels are made from solar cells which are a semiconductor material.



Electricity

The process for creating electricity from sun light is rather complex, but all you need to know is that photons collide with electrons in the semiconductor material and essentially free them up to flow when hooked up to a battery. This flow of electrons is what makes an electrical current.

The average household uses 30kwh of electricity per day. Electrical utility companies are required by law to accommodate “net metering”. This means that you can sell your excess power back to the power company. Thus, if you are out at work on a sunny day, or go on a two-week skiing vacation and aren't using any electricity, the power being created by the solar panels is going back into the grid to the utility company. In other words every kilowatt-hour of electricity produced by a solar energy system ends up being used to the advantage of the homeowner, either as power to run appliances when the homeowner is there or as a dollar-for-dollar credit provided by the utility company for power that is not being used.

The most important component of the PV solar panel system will probably be the amount of subsidy you are eligible for. Since some utility companies need to meet goals for the amount of renewable energy they furnish, there are some very attractive rebates offered at times. These can be large rebates indeed, up to 50% of the cost of a system or even higher. This can make a system that would support the average 30 kwh per day home cost roughly $20,000 rather than $40,000! In addition, there is a $2,000 tax credit offered by the federal government. However, this is not always the case. In our local area of Colorado there are several utility companies that service the region. One offers a 50% rebate as described above. Another offers a 66% rebate, and a third offers no rebate at all. So you need to check with your utility company to see what rebates, if any, apply to your location. You should also contact a solar panel contractor who can give you lots of information about system costs, and of course they will probably know the rebates offered in your local area. Typical PV solar panels cost about $4 per watt before installation. Installation is a major expense, however, and in the example cited above with a 50% rebate, final system costs will amount to about $6.50- $7.00 per watt installed.

Batteries

Batteries are required in stand-alone systems to provide energy during night hours. These can be very expensive, but if you have an isolated cabin, an RV, or some other need for power and don't have access to the public power grid, a solar system with batteries is certainly a solution.

Conclusion

When you consider the costs of a full blown PV solar system which will cut your electric bill down to zero or close to it, you get one other benefit. The value of your property increases with such a system, and your property taxes will not increase because of this added value. In addition to the satisfaction of cutting down your carbon footprint significantly, your system will eventually pay for itself, and your property will be worth more as well. Keep these factors in mind when you calculate your pay-back period.