Solar Economics

By combining the power of volume purchasing with the solar incentives the 1BOG program makes solar energy comparable or cheaper than traditional electricity. Here’s how:

Cost of Solar

Typically solar installations cost approximately $9-10/watt of installed solar panels. This figure includes all costs (panels, installation, fees). The number of panels and total rated output are the primary cost drivers. The total number of panels you need for your home will depend on many factors including current electricity usage, shading, roof orientation, and economic objectives. Most residences typically require between 1 and 5 KW of solar. The total cost for an average 2.5 KW system would be roughly $25,000 before rebates.

Solar Incentives

Federal: For 2008 there is a $2,000 Federal tax rebate. This rebate is a reduction of your tax obligation when you file 2008 taxes in April 2009. This is not a deduction, it’s a rebate. So you get the full value of the $2,000. This rebate is set to expire at the end of 2008.

California: California offers significant rebates on solar installations under the $3.3 billion California Solar Initiative (CSI) program. The rebates are based on total KW of solar installed, adjusted for factors such as shading and orientation. The rebate is currently $1.90/watt and will decrease by 30 cents/watt as certain thresholds are hit. For an average 2.5 KW system the California rebate is $4,750. Note, this rebate is offered at the time of purchase - no waiting. For full details on the program, visit the California Solar Initiative website.

San Francisco: In June 2008 San Francisco passed an additional $3,000-6,000 residential solar rebate.

Other cities/states: Please check each 1BOG City’s page on this site for information about specific local rebates and government incentives, we’ll update these pages as news get in!

Volume Pricing

By aggregating residents together and negotiating volume purchase discounts on top of the Federal, State and City rebates we can reduce the cost of solar from $9-10/watt by $1-$2/watt. For a typical 3KW system, volume pricing can reduce your total cost by up to $6,000. On an after-rebate basis, this can reduce your net cost by up to 50%!

Financing Solar

Even after the rebates and discounts solar power is still a substantial investment for many households. 1BOG is working with financing partners to offer alternative payment options to participants. By leveraging rebates and group purchasing power, we can get the cost of solar on monthly basis lower than the existing average electricity bill. For example:

If your average monthly bill is $100-$150, you’ll probably need about 3 KW of solar panels. With new financing options you can ‘go solar’ and pay roughly the same amount (or even less) for solar, instead of paying your utility company. Plus the monthly finance amount is set in stone and will never increase. And after the loan is paid off the electricity is free!

Couple that with the fact that electricity rates have increased an average of 5.5%/year for the past 30 years and this investment gets better and better.

For detailed information on understanding solar, please visit our partner site Solar4SF.org.