Thursday, August 13, 2009

Going Green For Green

I attended an Architect's convention last week and one of the sessions was on Solar Energy. Unlike most sessions of this type it actually provided practical, usable information. Like all similar information this should be taken with a grain of salt and tested against actual information on your particular situation.

The first and most astounding part is that the government will pay 80% of the cost of a solar installation, with a few caveats. The 80% is a combination of a 50% Louisiana Tax Credit and a 30% Federal Tax Credit. I am not a tax expert please check this out for yourself.

Louisiana Solar Tax credit is a 50% refundable tax credit it is limited to $25,000 per system but the number of systems is unlimited and you can apply for it every year. Since it's a Refundable Tax Credit you get a check for the difference between the tax you owe and the credit. I understand any check you get is taxable on your Federal Income Tax.

Federal Solar Tax Credit is a 30% one time tax credit for qualifying solar system. The Credit is not refundable but may be carried forward for up to 3 years.

Do the math.

Solar Water Heating. According to the information I got a passive solar water heater capable of supplying the average New Orleans home costs about $5,000 installed and would essentially eliminate the cost of heating water, except for occasional very cold very cloudy days. According to standard energy rating a typical gas water heater costs around $300/year to operate. With an 80% tax credit the out of pocket cost is $1,000. That would pay back in less than 5 years.

Photovoltaic Power Systems. It was estimated that a photo voltaic system would generate 1 watt per square foot and cost about $ 8.50 per square foot. Based on a $25,000 limit per system, a 3,000 KW system would fit under the limit (remember there is no limit to the number of systems). In our area system there are approximately 150 hours a month the system would operate at near peak efficiency, generating 450 KWh (KiloWatt hours) /per month. Louisiana also has a net metering law, meaning that if you have a grid tie in any electricity you generate in excess of you needs runs the meter backwards. That's an oversimplification but is more or less accurate. A 3,000 watt system will cost in the neighborhood of $25,000 and max out the system credit. With an 80% tax credit the out of pocket cost is $5,000.

The estimate is that such a system will pay itself off in 5 years or less, although that might be optimistic. If I understand it correctly Entergy New Orleans charges residential customers $0.06 /KWh, plus a fuel adjustment charge which is running around $0.045/KWh. That amounts to a total cost of $0.105/KWh. 450 KWhs equal a savings of $47.25/month or $567.00 per year. That amounts to about a nine year payback.

Check it out. You can pull out your own Entergy bill and see how much power you actually use, subtract 450 KWh from it and see what it would be.

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