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Going solar in California makes the most financial sense.

Let’s compare two states, both with lots of sun exposure. California and Nevada both have an abundance of sunshine, then why does going solar in California make much more sense than Nevada? The financial payback period for solar energy in California is much quicker than any other states. The purpose of this post is to compare two states that have equal sun exposure and demonstrate how much state incentives available for solar energy can do reduce upfront costs for a solar energy system.

Residence: Los Angeles, CA – Solar Electric (Photovoltaic)

System Size: 5kW

Total Cost $40,000

Federal Tax Credits $(2,000)

State Incentives $(20,086)

————————————-

NET COST $17,914

Residence: Las Vegas, NV – Solar Electric (Photovoltaic)

System Size: 5kW

Total Cost $40,000

Federal Tax Credits $(2,000)

State Incentives $(0)

————————————-

NET COST $38000

In comparison, let’s look at commercial photovoltaic systems in both states…….

Commercial: Los Angeles, CA – Solar Electric (Photovoltaic)

System Size: 5kW

Total Cost $40,000

Federal Tax Credit $(12,000)

State Incentives $(15,782)

——————————————

NET COST $17,584

Commercial: Las Vegas, NV – Solar Electric (Photovoltaic)

System Size: 5kW

Total Cost $40,000

Federal Tax Credits $(12,000)

State Incentives $(0)

——————————————

NET COST $28000

** All calculations assume 30 degree pitch facing south, with no shading issues.

As you can see commercial solar energy systems get the largest break from the federal government. The residential sector is capped at $2,000…this federal tax credit is set to expire on December 31st, 2008….unless congress renews it. The latest I have heard about the extension is the house just passed up a bill to extend the credit, hopefully it passes through the senate this time around, although President Bush has already threatened to veto it if the extension of the tax credit for renewable energy comes up to his desk.

Author: Deep Patel

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