For the average person in North America, utilities bills are an ever increasing expense. Homeowners who decide to use renewable energy in the form of geothermal, wind, or solar power are seeking a way to defray the cost of utility bills. As the average cost of solar power set up or kits decrease and the popularity increases, the question becomes what is the long-term return on investment.
For a better understanding of return of investment on renewable energy, in this case, solar power, consideration must be given to the implementation of the system. While prices vary on the size of the system, the location of the installation, and the company installing it, in North Carolina the solar systems cost in general from $11,000 to $35,000.
Currently in North Carolina, there is a state renewable energy tax credit of 35% with an additional 30% credit from the government. (Database of State Incentives For Renewals and Efficiency, n.d.) This means the average $11,000 - $35,000 installation cost is reduced to $5,200 to $18,000, a much economically feasible cost.
With an average utility bill for those living in North Carolina it is approximately $1,100 to $1,400 per consumer year (Public Staff Commerce for NC, n.d.), it would take approximately 5 -7 years for a homeowner to recoup the cost of installation. That is assuming that during those years there are no rate increases and the average usage remains steady. After which, the cost of electricity is ‘free’ to the homeowner.
In some situations, solar panels and the homeowner’s own conservation not only covers usage, but also supplies extra energy. In which case, the homeowner may actually make money by providing utility companies with electricity.
For those North Carolina residents who are in Duke Energy Progress territory, they are eligible to participate in the SunSense program, which gives them a cash rebate for any Solar PV installation. SunSense will also send a rebate check for $1,000 for every AC kilowatt that is installed within 4 weeks of the installation. For example, after installing a 3kW-AC solar system, you will receive a check in the mail for $3,000.
In addition, Progress Energy will also credit $4.50 per kW-AC installed on a monthly statement. Customers in the SunSense program can expect to have a faster payback period by 2 to 3 years. (NC Solar Now, n.d.)
While installation of solar panels can be somewhat costly, the discounts provided by state and federal governments can cut the costs dramatically. But is it worth it? Take the following for example:
A home that uses 1,430 kilo watt hours can expect the following bill – energy only (based on a blended rate of 10.35¢ has an average bill of $147.43 a month. (My Cooperative/News, 2013) or $1769 annually. The proposed rate increase by Duke, one of North Carolina’s main provider of electricity would increase the rate and average of 4.5% for two years, and additional .6% after the first two years for a total average of 5.1%...