Frequently Asked Questions about Solar Energy

Although there are a number of solar energy technologies, the sections below refer primarily to photovoltaic technology.

These are common questions about solar energy and photovoltaic (PV) systems, including costs and benefits. Solar energy costs and savings can widely vary, and depend on a number of local factors. 

What Are the Benefits of Solar Energy?

For America

Adding solar energy to our nation's energy mix:

  • provides America with clean and diversified sources of energy supply
  • increases energy security, moving away from large centralized power plants
  • reduces the need for new conventional power plants
  • improves our environment by avoiding greenhouse gas emissions
  • improves the quality of air we breathe
  • stimulates our economy and creates jobs by promoting a U.S.-based solar industry
  • creates an easy-to-deploy, mobile energy supply for emergencies, disasters, and national defense purposes

For Individuals

Adding solar technologies to homes and property:

  • improves property values
  • saves money on electricity bills
  • provides a hedge against future energy price increases
  • provides security, by using an energy source that is unlimited
  • creates a sustainable energy future
  • provides an uninterrupted energy supply during blackouts with the use of batteries for power backup and energy storage

For Businesses

Adding solar technologies to businesses:

  • provides positive financial returns (solar energy projects can generate positive cash flow immediately based on green financing options)
  • creates no emissions, no noise
  • provides a hedge against electric price volatility
  • provides energy supply to remote installations or buildings
  • creates a mobile energy supply for use in emergencies and disasters
  • provides an uninterrupted energy supply during blackouts with the use of batteries for power backup and energy storage

For Utilities

Solar energy:

  • reduces or avoids the necessity to build new transmission/distribution lines or upgrade existing ones
  • aids in meeting peak power needs
  • diversifies the range of energy sources in use and increase the reliability of the grid network
  • can be installed in small increments to match the load requirement of the customer
  • provides a potential revenue source in a diverse energy portfolio
  • assists in meeting renewable portfolio standards goals
  • aids in off-setting or avoiding carbon emissions

What Types of Solar Energy Technologies Are Available?

Solar energy can refer to photovoltaic, solar water/air heating, concentrating solar power.

  • Photovoltaic (PV) modules are made of semiconductor materials that convert sunlight into electricity. PV modules produce electricity any time the sun is shining, but more electricity is produced when the sunlight is more intense.
  • Solar heating harnesses the power of the sun to provide thermal energy to heat air or water.
  • Concentrating solar power systems use a variety of mirror configurations to concentrate the intensity of the sun to generate electricity.

How Do PV Systems Work?

PV modules use semiconductors similar to those used in computer chips to convert sunlight into usable electricity. Some modules use an inverter to convert the direct current (DC) electricity created by the solar modules to alternating current (AC) for use throughout the home.

Many PV systems purchased today are connected directly to the utility grid. The PV system will produce electricity to power the building during the day. If the PV system is producing more electricity than is consumed by the building, the grid-connected PV system will feed the power back into the utility grid for use by other utility customers.

In the case of PV systems that are not connected to the utility grid, commonly referred to as "off-grid," the PV system often includes batteries to store the electricity generated during the day. Off-grid applications of PV are found in remote locations where connecting to the grid is not practical. Off-grid applications are also common for emergency use and remote power (e.g., road signs, flood monitors, and military applications).

Is PV Mainstream Yet?

In the past you might have noticed off-grid PV systems in remote locations, farms and ranches, temporary construction signs, and roadside emergency phones. In these remote settings, the cost of connecting to the utility grid outweighed the expense of PV. However, in locations where users had the option to connect to a utility's electricity grid, the cost of solar was not competitive.

Today the adoption of PV systems is widespread and is growing. According to PV News, PV installations in the United States in 2006 experienced strong growth, with the grid-connected portion of the PV market growing by 60% over 2005. Solar manufacturers are working to reduce the price of systems and increase the energy conversion efficiency of PV equipment.

Financial incentives that encourage the purchase of PV systems and reduce the upfront capital costs, such as rebates and tax credits are helping to grow the market for PV in the United States. Also, states that have more-developed markets for PV now have regulations that encourage the production of electricity from renewable energy sources such as solar and wind. Examples of solar technology today are widespread and can be found on homes, businesses, skyscrapers, schools, and government buildings.

Where Can I Find Examples of PV Systems?

Large homebuilders such as Shea Homes and Centex in California offer PV systems as standard features in many of their new home developments.

Large corporations such as Microsoft, Federal Express, IBM, Johnson & Johnson, Staples, GM, and Toyota have all installed solar electric systems on their buildings. You can also find solar systems on warehouses, skyscrapers, and corporate office buildings.

Government installations include the Pentagon; San Francisco's Moscone Center; the Santa Rita Jail in Alameda County, CA; NASA; Edward's Air Force Base, CA; Las Vegas Valley Water District, NV; Butte County CA Government Center; Oakland Ice Center, CA; New Jersey National Guard facilities; United States Naval bases at Pearl Harbor and Coronado; the Environmental Protection Agency; the United States Department of Agriculture headquarters in Washington, D.C.; Fort Hood army base, TX; and many more.

Universities and educational institutions throughout the United States are installing PV systems. These include the University of Texas Houston Health Science Center, the State University of New York, Loyola Marymount, San Diego City Schools, Cal State University, Georgia Tech Aquatic Center, and the University of California at Irvine. In addition, many K-12 school districts throughout the country are installing PV systems for practical and educational reasons.

Is Solar Affordable?

Nationally, the cost of an installed, grid-connected PV system can range from $7 to $10 per watt. System sizes for homes usually range between 1 and 5 kW (1 kW = 1,000 watts). System size will vary based on a variety of factors, including energy consumption habits, orientation of the PV system (south-facing modules can maximize the sunlight exposure), and the portion of your electricity load to be offset with a PV system. Rebates offered locally through the utility, state, or even the local jurisdiction and federal tax credits exist that can reduce the upfront system cost by as much as 50%.

What Financial Incentives Exist for Solar?

To make PV systems even more affordable, the federal government, several states with renewable portfolio standards, and some local jurisdictions (through the utility companies and other sources) offer financial incentives to purchase solar equipment in the form of rebates and tax credits. Some states allow net metering, where the cost of electricity purchased from and sold to the utility are the same. This further enhances the economics of PV.

Rebates and Tax Credits

Specific federal and state tax laws permit private companies and homeowners to credit the purchase price of their solar power systems against their annual income tax payment.

  • Federal Business Energy Tax Credit is 30% on commercial renewable energy system purchases and installation.
  • Residential Solar Tax Credit is 30% for photovoltaic and solar water heating.
  • Utility rebates can range from $2.00 - 4.50 per watt.

In states that have passed legislation to establish Renewable Portfolio Standards (RPS), utilities in that state are often required to provide incentives to encourage the development of customer-owned solar power systems based on on-site capacity or size.

Why Are Government Incentives Needed?

Government incentives are used to accelerate the development of a market and to ensure U.S. technology leadership. Government incentives can increase the installed solar capacity, which drives down solar costs in the long run, to the point where incentives are no longer needed. Maturing solar markets such as Japan have reduced or ended the incentives for purchase of solar equipment as market penetration increases.

How Does Policy Affect Market Potential for Solar?

Understanding the regulatory environment and the U.S. policy landscape is critical to understanding the market potential for renewable energy. PV rebate programs are of little value without corresponding net-metering and interconnection standards.

Net metering provides a framework that establishes the value of PV-generated electricity and allows system owners to sell back this electricity to the utility company (economic value).

Interconnection standards provide uniformity across utility service territories for connecting a PV system to the power grid and render the entire process transparent for installers and consumers (infrastructure value).

Due to the distributed nature of PV, net metering establishes the economic parameters that dictate the value of PV-generated electricity, while interconnection standards define the technical requirements and process of connecting a PV system to the grid. These factors ultimately dictate cost, time, and value associated with investing in PV.

The U.S. does not have national uniform net metering and interconnection policies. Instead, these policies are established on a state-by-state basis, making it challenging for utility companies operating over multiple state jurisdictions to implement clean energy programs.

  • Thirty-six states have state-wide net-metering programs and these programs vary significantly.
  • Thirty-nine states allow connection of renewable energy systems, e.g., PV or wind, to the grid.

Are PV Systems Ugly?

The hardware used to mount traditional PV panels has improved dramatically, allowing for a more streamlined, aesthetic look. Advances in PV module design has resulted in building-integrated PV (BIPV), where solar cells now double as roof shingles, roof tiles, building facades, or the glazing for skylights or atria. Because of the integrated nature, many building-integrated solar applications are not obvious to an observer.

Does a PV System Add to the Value of My Home?

According to a study by the National Appraisal Institute, a PV system will add $10-$20 to the value of your home for every dollar saved over the course of the year. As an example, if your system saves you $800/year, it would typically add $8,000-$16,000 to your home's value.

Are PV Systems Reliable?

  • PV systems are extremely reliable.
  • PV systems have no moving parts and require no maintenance beyond cleaning the PV module surface occasionally.
  • They are made to withstand harsh weather conditions.
  • They work as long as sunlight falls on the surface.
  • Most PV module manufacturers offer a 20-25 year warranty.
  • Inverter warranties up to 10 years are also available.

How Long Does Installation Take?

Installation time depends on the size of the system, but residential installation usually ranges from as little as half a day to several days.

Are PV Systems Safe?

Solar panels are a quiet, non-polluting source of energy. Like all large electrical devices, PV systems generate electricity and should be treated with care and maintained with the assistance of a solar professional.

End of Solar Energy Guide - Next Guide: Wind Power

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