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Nothing stirs envy in the eco-conscious heart quite like a solar panel on your neighbor's roof. But can you possibly afford one? Thanks to new dealer incentives and tax benefits, your answer will more likely be “yes” than ever before.

“Costs have gone down so much, but most people aren't aware of it,” said Ken Oatman of Astralux Power Systems, a company based in Boulder, Colorado, specializing in residential and commercial solar panels.

Dealer and Tax Incentives
Oatman showed me an estimate for a 2.98 kW residential system in Boulder―enough to offset 52% of home energy usage for many consumers. The system itself costs $18,742, including installation, connection to the grid, permits and taxes, but a combination of utility company rebates and the federal tax credit brought the total cost down by a whopping 69% to just $5,831.

Here’s how the discounting works in this case: According to the estimate, regional power company Xcel Energy offers most of the savings as part of an effort to encourage alternative energy usage: $10,412 is discounted by the energy company up front. That brings your cost down to $8,330.

Of course, such incentives vary from region to region and depend on your energy company. To find out if such programs exists in your hometown and state, be sure to check out the Database of State Incentives for Renewables and Efficiency. Just click your state on the map for a summary of all incentive programs―government and commercial―in your area.

An additional $2,499 is taken off by the federal government's 30% Residential Renewable Energy Tax Credit, money you get back come tax time. This credit, according to the IRS, applies to the total cost of the system after any other benefits you might receive—state, municipal or corporate.  Voila, you’ve lowered your cost to $5,831—in Boulder, Colorado, at least.

Calculate Your Needs and Costs
Use the handly calculator at the Find Solar website to get a ballpark idea of your solar panel needs, costs, retailer discounts and tax incentive available in your zip code. Learn more about the practical and technical considerations by reading the EcoHearth article, Shining a Light on Solar Panels: The Basics. Then, armed with this information, contact a solar dealer in your area (find one at the Solar Estimate website) and ask for an estimate specific to your situation. Most would be delighted to receive an email or phone call from a potential customer seeking more information.

There are a few other things to consider as well:

• Your local climate will determine whether you get enough sunshine to make solar panels a worthwhile investment
• You may be able to make money by feeding your excess power back into the grid, although some energy retailers charge fees for this
• Roof orientation matters; in general, solar power works best if your roof faces south without any obstruction
• If you are completely off-grid, you will need batteries to store power for times when the sun isn’t shining—nights, cloudy days and the occasional solar eclipse

With falling solar panel prices, rising dealer incentives and generous government tax breaks, this is a great time to consider the purchase of a solar panel for your home. If it makes sense in your situation and you install one, it can be you who is the envy of your environmentally conscious neighbor, instead of the other way around.

Additional resources:
Shining a Light on Solar Panels: The Basics

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