Right now, the sun contributes only 0.2% of the power on the electric grid. Even if that doubles in the next five years, as expected, it will remain a tiny portion.
Solar has long held great promise. The sun is cranking exactly when power demand is typically highest and electricity is most expensive—during daylight hours. And residential installations can feed power directly into homes and power grids without needing to build giant new transmission lines. Installing panels is hailed as a green job that can’t be outsourced.
In 2009, government support for residential solar systems was about $600 million, according to the Interstate Renewable Energy Council. That is split roughly evenly between federal tax credits and rebates paid for by electricity customers.
In the past three years, the wholesale price of panels has fallen 60% to about $1.70 per watt. As they keep falling, solar power will get more competitive and require fewer subsidies. When they reach $1 per watt, you don’t even need a 30% [federal] tax credit for a project in states with the highest electric rates to be economic.
This makes it incredibly viable for property owners to install a residential solar system. With the possibly of reducing your energy bill significantly or eliminating it altogether, there has never been a better time to go solar.
