Solar Overview – What is Solar and Why?

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Let’s start with “What is Solar?” Solar is the capture of the sun’s energy. There are two ways we can do this. The First is through Photovoltaics, which is the direct conversion of light into direct current electricity. This is known as Solar PV or Solar Electric. Solar PV systems when installed on a home or business offsets your electrical usage and reduces your electric utility bill.

The Second is Solar Thermal which harnesses heat energy. This is also known as Solar Hot Water. When a Solar Thermal System is installed, it offsets your hot water needs. This can offset your electrical and/or your gas usage depending on what system you currently use to heat water.

Solar PV. As I talked about earlier, Solar PV systems produce Direct Current (DC) Electricity and you home or business uses Alternating Current (AC) Electricity. Because of this, another electrical component is required. This is called an Inverter. An inverter is mounted between the solar panels and your electrical panel (aka breaker panel) to convert your solar energy to usable AC electricity. There are a couple of different types of inverters which we will go into in another blog. Components of a Solar PV system include: Panels, Inverter(s), wiring and a racking system.

Solar Thermal Systems harness the sun’s heat energy to offset your hot water use. Solar Thermal panels are basically large copper radiators built to optimize the sun’s heat energy. In most cases we create a closed loop of fluid that runs from a heat exchanger in your mechanical roof to the solar thermal panels. This fluid runs through a heat exchanger and transfers that heat to a hot water tank. This tank then acts as a feed of pre-heated water to your current hot water system (boiler, hot water heater, ect…). Solar thermal systems are all custom designed and built to integrate with your current system and can offset domestic hot water, in-floor radiant heat, base board heat, hot tubs, industrial applications and anything else you heat.

What about aesthetics? Solar can be installed in a very attractive manner and a not so attractive manor. Your solar installer will work with you to choose panels that compliment the look of your house. Considerations include: panel color, type of racking system, orientation and mounting.

Now that we’ve answered the what, let’s focus on the why. Right now, solar electric systems are down right cheap. The main raw ingredient in solar PV panels, silicon, has dropped in price and a competitive marketplace has forced manufacturers to cut costs. This, combined some of the most generous incentives in history make this the perfect storm for solar.

What does solar actually cost? Let’s use the example of a typical 3000 watt (3kW) roof mounted PV system. The market price for this is around $5.50 per watt. $5.50 x 3000watts equals $16,500. After this price, we start to subtract the cash rebates. Xcel currently offers a rebate of $2.45 per watt rebate, so $7,350 off of our system. Then, the federal government offers a 30% federal tax credit on the remainder of the system. Here is the math:
3000 watt system price $16,500
Xcel rebate $7350
30% Federal Tax Credit $2760
Total after rebates/incentives $6,390
Many other utility company rebates can be combined with state rebates for even more savings.

Purchasing solar today hedges you again future energy inflation. The solar market may fluctuate, incentives will vary, but it is fair to assume that energy prices will continue to rise. Over the last 10 years, electricity prices have risen 45% and many think the next will outpace that. Now is a very good time to invest in solar.

Solar is also good for the economy, the environment and the energy infrastructure. Producing power from solar puts less stress on our grid and decentralizes energy production. Solar is a net positive environmental impact. It takes about one year to payback the energy used to produce a solar PV panel that will last 30 times that. It is also good for the economy. Choosing a local solar company keeps money in your area. As you’ve seen in the example above, spending $6,350 puts $16,500 into the local economy.

Solar is the production of energy at your house. It is good for the environment, the grid, the economy and with incentives and rebates, now is a great time to go solar!

Thanks for reading. Shoot us any questions or comments you may have.
Stephen