This was originally published on Tuesday, July 14, 2015, in the Pacific Daily News. Click here to subscribe to the PDN.
Solar energy works by converting light energy from the sun into useable electricity. According to the U.S. Department of Energy, solar energy costs around 13 cents per kilowatt-hour. Using the national standard of the price of power per kilowatt that is nearly 14% less than traditional electricity provided by fossil fuels.
Developments in solar technologies continue to lower the cost of owning a solar powered system. As the cost of owning a system decreases many more homeowners are starting to purchase them. The Solar Energy Industries Association (SEIA) stated that in 2012 the solar market grew 76% in 2012 in the US. Here are a few reasons why solar is preferred over traditional fossil fuel and other green technologies:
- The obvious is saving the environment. Solar power is clean and sustainable. Lowering your carbon footprint while saving money is a win-win situation. Unlike fossil fuel, which is limited, the sun is everlasting. The cost of fossil fuel fluctuates depending on many factors such as the weather, civil unrest and changes in the supply and demand. The sun is constant. It is a sustainable source of energy. The amount of energy that the sun emits in a day is much more than the total energy the world uses in that day. The technology is also very silent because there are no moving parts. Although some pollution is emitted in creating the materials used to make the photocells, it is much less than the pollution that fossil fuels emit when used in machines.
- Incentives to go green are provided by the federal government and some states. Since 2008 the Federal Government has offered a 30% tax credit to homes that utilize solar power. At this time I don’t think this is available on Guam but another benefit is net metering. Net metering allows utility customers to feed excess power into the power grid. The customers are then credited against their electrical consumption ultimately lowering their power bill. Think of it as the power company paying you to produce power and selling it to them.
- Upfront costs to owning a solar power system is high, so solar purchase power agreements and solar leasing are becoming very popular. Think of leasing as a rent to own financial option. The solar provider owns the solar system. They are responsible for the installation, maintenance, repairs and monitoring for the system. Instead of paying your power company you pay the solar provider, which is much less than what you would pay your power company. Guam has several solar providers to choose from. Some offer a zero-money-down to start. A credit check is usually performed.
- The lifespan of solar panels is quite long. The performance guarantee on many solar panels is twenty to twenty-five years. With such a long lifespan you most certainly will recoup your investment.
- It increases the value of your home. A study conducted by the National Renewable Energy Laboratory (NREL) stated that homes with solar panels were valued17% higher and sold 20% faster than homes without solar panels.
- Help reduce the world’s dependency on fossil fuels. It also helps reduce our dependence on foreign energy. Relying on foreign oil and the prices at which they sell it to us causes our economy to suffer.
Michael Camacho is president and chief executive officer of Personal Finance Center. He has more than 20 years of experience in retail banking and at financial institutions in Guam and Hawaii. If there is a topic you’d like Michael to cover, please email him at email@example.com and read past columns at the Money Matters blog at www.moneymattersguam.wordpress.com.