A.Martin Holladay
responds: The term "solar panel" can refer to
two different types of equipment: photovoltaic (PV)
modules or solar thermal collectors. PV modules
generate DC power to charge batteries, or when
connected to an inverter, to power house loads or
supply electricity to the utility grid. Solar
thermal collectors are used to heat swimming pools
or to supply a portion of a home's domestic hot
water or space heating needs.
Cost-effectiveness calculations are complicated
and site-specific. In sunny parts of the country,
like Arizona or New Mexico, a PV module or solar
thermal collector may have two or three times the
annual energy production of the same equipment
installed in northern Vermont. Cost-effectiveness
calculations also depend on the cost of available
conventional energy; when replacing natural gas, a
solar hot water system will have a much longer
payback than when replacing electricity.
Finally, some utilities are now offering rebates
to cover up to half the cost of PV or solar thermal
equipment; such incentives obviously improve cost
effectiveness.
Here's the summary: PV systems are not yet
cost-effective anywhere in the country where
utility grid power is available. Where significant
rebates are available, however, a PV system
installed on a new home in a sunny climate can
produce a positive cash flow for the homeowner if
the cost of the system is inclded in a new home
mortgage.
Solar thermal collectors are a cost-effective
way to heat swimming pools in all areas of the
country. In areas with lots of sun and high
electric rates, like Hawaii, solar domestic hot
water systems are very cost-effective. In
California, Florida, Arizona, and New Mexico, and
other areas with similar climates, solar hot water
systems are also cost-effective, especially if they
are being substituted for an electric water heater,
although the payback period will be longer than in
Hawaii. In most northern states, if maintenance
costs are included, an investment in a solar hot
water system is probably a break-even or
money-losing proposition, especially when replacing
natural gas.
Of course, any increase in energy prices will
improve the cost effectiveness of all types of
solar hardware.
Martin Holladay is the editor of Energy Design
Update.