Why solar electric?
Good question! For me, it was part serendipity (see choice of REC Solar) and part economics.


Solar Electric versus Solar Hot Water

My house uses natural gas for domestic hot water, cooking, and heating. We use electricity for everything else. I think that my electricity comes from a mix of coal (base load) and natural gas (peak loads) fueled power generating stations. Our annual bills for electricity and natural gas are similar. A solar electric power system will reduce our electric bill. A solar hot water system would reduce our natural gas bill (and potentially slightly reduce our electrib bill).

I have read that current silicon photovoltaic panels are less efficient at converting sunlight to usable energy than hot water solar collectors. Hot water solar systems typically provide heat for domestic hot water usage. My houshold spends much more money on electricity than on natural gas for domestic hot water. Now, if I could use solar hot water to help heat my house in the winter (via radiant floor heat), that would cut into the (expensive) gas for heating bills and starts to sound much more appealing. Unfortunately, in Colorado if you have enough collector area to help heat your house in the winter, you will have too much heat in the summertime and that causes ‘operational issues’ (which I think means that you can boil all of the water in the storage tanks and damage the system). One solution is to dump the extra heat in the summer time. This is all do-able, but leads to a more complex and expensive system. With solar electric power, there are no moving parts (except for the cooling fan in the inverter) and I think that solar electric power systems require less maintenance and repair than hot water solar systems.

Rebates and Tax Credits

XCEL Energy Solar Rewards Rebate Program. XCEL energy currently offers a rebate of $4.50 per DC Watt for qualifying photovoltaic solar power systems. That ends up covering approximately half the cost of the installed system. If you exclude environmental and geopolitical benefits of the purchase and analyze the investment based soley on its current cost and estimated future cost savings, the case is not compelling for electric solar power. I created a spreadsheet for a net present value calculation and found the discount rate to be a little over 5%. (In other words, if I took the money that I spent on the solar electric power system and invested it, earning a little over 5% annually after taxes, then after 25 years I would have the same amount of money as had I not purchased the solar system. If the investment earns more than that discount rate, then I would have been better off investing instead of buying solar.) Now, take away the XCEL rebates, effectively doubling the cost of my system, and THERE IS NO WAY solar electric makes financial sense for me.

A solar hot water system and a solar electric power system are both eligible for a federal tax credit of $2,000


Purchasing a solar electric power system is akin to locking in your cost of electricity for the life of the system (assuming no major repair costs). With the current XCEL Energy rebate regime, my system will produce power that costs the same (within 0.1 cents per kW hour) as what XCEL energy is currently charging me. Taken in this light, the solar electric power system provides some immunity to inflation and/or geopolitical driven increases in future energy prices.