With all the what-ifs of future energy prices, calculating the “payback” of a solar-electric system tends to be a rather convoluted task. Here in Virginia, where coal is abundant and produces most of the electricity, we pay below what most other states pay for electricity, about 9.4 cents per KWH. This “cheap” electricity adds years to the traditional PV payback calculation. However, once the idea of coal-to-oil liquefaction gains momentum and if coal is used for fueling vehicles, the cost of coal-based electricity will inevitably go up. That potential increase could shave years off our payback, but only time will tell.
Our 1,400-square-foot house doubles as an office for my wife Margaret and me; she telecommutes as a consultant for IBM and I work as an architectural photographer. Our office is equipped with a laptop and desktop computer, scanners, a laser printer, and backup hard drives. The combined electrical loads of our computer gear contribute to our having a slightly higher-than-average monthly usage compared to other all-electric households. Prior to our conservation efforts and PV installation, our average monthly use was 1,500 KWH.
After we implemented conservation measures and replaced our old appliances with more efficient Energy Star models, our bill averaged $100 for roughly 900 KWH per month. (See “Our Energy Reduction Plan” on page 54.) Once we added the PV system, our electrical bills dropped even further—about 40%. If we wanted to swelter in Virginia’s summer humidity and not run our air-conditioning system, our PV system would come close to meeting our annual electricity needs. Last year, from May to December, our electrical bill averaged $42 per month, with a high of $68 in August and a low of $20 in May.
After the $2,000 federal tax credit, we paid $25,700 for our system, using a taxable savings fund that had big swings in interest payouts. Long warranty periods—10 years on the inverter and 25 years on the modules—take the fear out of the initial investment. Unfortunately, Virginia has been slow to adopt incentives and tax credits. Our system is exempt from state sales and property taxes, but that’s about all the state has to offer. If we lived a few miles to the north in D.C., we could have received reimbursement for up to 50% of the system’s cost through grants from the D.C. Reliable Energy Trust Fund. A few miles farther north, in Maryland, grants cover up to 20% of a system’s cost with a maximum rebate of $3,000 for residential PV systems.
Despite the absence of incentives in Virginia, we have no regrets about our investment. For the next 20 to 30 years, our roof-mounted system will produce a large portion of the electricity we need. Though we’re not making a huge return on our investment (about 4% untaxed), we see our system as a safe place to park our cash. The rate of return is roughly equivalent to a conservative bond fund. And, so far, the sun always rises, making the system a stable and reliable investment every day.