The economics of installing solar…. good incentives if your rich & take all government hand outs

WSJ…Each location was assumed to be using roughly the same size unit, placed on a south-facing roof, tilted at 30 degrees. Each hypothetical home was assumed to use 11,500 kilowatt-hours of electricity per year, the average in the U.S., according to the Energy Information Administration’s 2010 data. It was also assumed that the systems were being purchased with cash and that each homeowner’s system starts operating on Jan. 1.

While Clean Power Research cautioned that tax situations and effects of credits will differ from person to person, it assumed that the homeowner in each example was filing taxes as a single person and had annual income of $140,000.

But the similarities ended there. Each location featured different electricity rates, tax credits, rebates and weather. A five-kilowatt system in Los Angeles, for example, will generate about 700 kilowatt-hours of electricity per month. In Minneapolis, the same system will produce about 500 kilowatt-hours.

Adding it all up, the location with the best investment return was New York. The solar-energy system for our hypothetical home in Brooklyn paid for itself in just five years, thanks in part to large local incentives. Electricity rates in New York were higher, too, which yielded more savings over the long run.

The chart shows how the costs and advantages compared in our five locations.

What follows is a more detailed explanation of some of the chart’s features and some further analysis of the case study:

System size: All except Portland assumed a five-kilowatt system, the average size for a residential solar installation in most of the U.S. For Portland, which has a mild climate and an incentive system that favors smaller systems, we assumed a system of three kilowatts.

Federal tax credit: The federal government offers a 30% investment tax credit on the cost of the system after rebates. (The credit is higher in Denver, for example, because there is no state or utility rebate.) To claim the full credit, your tax bill must be bigger than the credit.

Read on at: http://online.wsj.com/article/SB10000872396390444506004577615662289766558.html