Solar reduces energy costs

Solar energy is clean, reliable, increasingly affordable, and thanks to the popularity of utility-scale, community projects and rooftop installations, a continuously growing part of America’s modernizing electricity mix.

Due to lower costs and government-incentive programs, solar photovoltaic (PV) is also the fastest-growing segment of the U.S. renewable energy market, achieving annual growth rates exceeding 40 percent, a new Consumer Energy Analysis reveals.

This growth has been triggered largely by government and utility-offered consumer incentives, which have reduced residential customers’ net costs for installing solar PV systems to record-low levels.

These reductions are now so significant that total incentives, in many states, are greater than the system’s total costs. The actual cost of residential rooftop solar PV systems nationwide is, on average, roughly twice that of utility-scale solar, with total residential rooftop solar PV system incentives about four times that of utility-scale solar.

In Florida, a single 3,900-watt rooftop system in the state receives $11,707 in taxpayer and net-metering incentives, or $3 in incentives per watt. This represents 86 percent of the actual cost of the system.

These dramatic cost reductions have caused many states — Florida included — to reexamine the scope and methods surrounding these incentives. Many are now considering programs that rely more on a competitive marketplace to provide optimal levels of solar PV adoption.

One of the key drivers in states’ assessments is the cost of energy produced by residential solar PV installations compared with the much lower cost of energy produced by utility-scale solar projects. The more data we have on this, the better — for all energy consumers.

This story was originally published September 21, 2016 at 11:00 PM with the headline "Solar reduces energy costs."