Jan 22 2009

Time to Harness the Sun

Posted by: Jonathan Marshall

If you're lucky enough to own a home and have some savings, now may be a good time to talk to a solar installer about putting solar panels on your roof. Recently extended federal tax credits and falling prices for solar modules make the economics very attractive for those who can afford the investment. (PG&E's website provides resources and information on the solar process and state incentives.)

Homeowners who install solar systems are now eligible for a federal tax credit of up to 30 percent of the total system price. State incentives, including rebates administered by PG&E in its service territory, further sweeten the deal. And prices for rooftop solar systems have fallen about 10 percent since October, according to USA Today, making the investment even more attractive.

"The financial return from a solar installation can be up to 15 percent after tax," says Bob Winn, owner of Sky Power Systems in San Ramon, which has installed several hundred rooftop solar generators around the Bay Area. "Today you are lucky to get two or three percent pretax with traditional investments."

In these troubled times, not surprisingly, many interested homeowners and businesses are still sitting on the sidelines.

"I see one foot on the gas and one on the brake," Winn says. "Tax credits have caused a lot of people who were on the fence to pull the trigger. But uncertainty around the economy means a lot of people who should be doing it for financial reasons are holding off."

Data from PG&E's interconnection team show that many customers still see value in making the investment. Despite the weakening economy, the number of customer solar interconnections rose from 6,532 in 2007 to a record 6,574 in 2008.

And following passage of the extended federal tax credits, PG&E received more than 1,300 solar interconnection requests in December alone--a sign of significant pent-up demand.

To date, PG&E has interconnected more than 27,200 solar customers and paid out more than $446 million in incentives. Another 3,700 residential and 450 commercial projects are in the pipeline. PG&E ranks number one among all utilities in the United States for solar electric capacity on the customer side of the meter.

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