Incentives for using solar

Mon, Aug 28th 2017, 11:25 AM

Recently, on a talk show where the subject was the benefit of the domestic use of solar energy, a caller suggested that if government wants people to use solar, it should provide incentives. At first I thought that the caller might not have been aware that there is a number of existing incentives offered, including reduced duty on the equipment. Then I realized that one feature of our consumer behavior is that unless there is a "free" in the price, no other benefit is worth discussing. Apart from the tendency to increase the overall cost of most things, this habit means that we tend not to address the benefits of a particular item unless we get it at a "reduced" price. The use of solar energy requires us to look at the benefits as well as the cost up front.
We have all used solar energy in one of its forms. As a child, I used the sun to heat water in a tub before taking a bath. I would also go outside and stand in the sun to get comfortable on a chilly winter day. In Nassau, as early as the 1960s, solar panels were made by plumbers from ordinary wood, tar and copper tubing. It was crude construction, but it essentially used technology similar to today's solar water heaters.
So the use of solar energy is neither new nor unexpected. It is simply the commercial use of the sun to reduce the need for energy produced on earth.
The two applications most people are familiar with are solar water heaters and some form of electricity-generating system, commonly referred to as photo-voltaic (PV) systems. The solar water heater means that an electric water-heating element is replaced by the sun. The reduction in the average monthly light bill may be as much as 30 percent.
Photo-voltaic panels convert sunlight to electricity, and can either reduce or replace the need for electricity from the public utility. Most households balance their expenditures by using the systems where they produce most benefit with least power, like lights and outlets, rather than refrigerators and electric ovens. Every household is different, of course, and the extent of their expenditure is based on the cash available. Regardless, however, most households can afford to replace some part of their power bill using a few solar panels and a couple of batteries.
As an aside, it is surprising that mortgage companies are not actively encouraging their customers to install solar systems. Not only does the installation increase the value of the property (the mortgage company's asset), but the increase of the monthly payments is considerably less than the savings in the cost of power, making it easier for the customer to make their monthly payments.
In any case, the use of solar energy reduces the need for expensive electricity. The solar water heater installed today will normally pay for itself in savings within three to five years. Most are serviceable in excess of 20 years, giving free hot water for the rest of its service life. That is certainly a huge incentive to use solar water heaters.
A PV system may cost a lot of money up front, but if it replaces only 75 percent of the monthly light bill, how long would it take to pay for itself? Despite the promises of politicians, it is unlikely that electricity costs will decrease in the near future. The ability to substantially reduce the second-largest monthly bill is a greater incentive than any government can ever offer.
There are people who decided to wait for government to allow them to sell power back to the grid before installing a system. That was about 10 years ago. Imagine the amount of electricity they have paid for over those 10 years. Imagine the savings they could have made. What an incentive!

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