Solar Power Can Help You Control the Price of Electricity

On average, energy costs increase by 2 to 3 percent every year but that’s changing. Some Minnesota utilities are looking to further decommission their coal fired power plants which has them now proposing rate hikes of up to 17 to 20 percent. The price hike wave is coming faster than you think…and solar is a way to attain greater energy independence to gain control of your electricity costs.

Return on Investment for Residential Solar Power in Minnesota

The ideal installed capacity for a residential solar power system depends on the energy consumption and the available rooftop area of the respective property.

If you take the average residential system averaging around 5 kilowatts,  you can look at the following financial scenario:

5-kW Solar Power System in Woodbury, Minnesota:

• Solar power system upfront expense before incentives is around $30,000. Plus, you will not be taxed on the solar power or the installation of solar power panels.
• Federal Tax Credit at 26% equals $7,800 for this project, and the cost is now $22,200. (Note: you have the option to also just stick this cash in your pocket for other uses.)
• Considering you will save around $750 over the first year, your upfront cost drops to $21,450.
• Have Excel Energy as your utility? They have solar power credit program to incentivize you to switch that will also bring down the upfront costs down further. Let’s use $1,500, bringing your net outlay to just around $19,950.
• The payback period you can expect is around 12 years (but this is flexible up to 25 years). When you assume a 25-year project life, this results in 13 years of free energy and over $20,000 in net profits!
• Even better, it has been shown that your home will increase in value by around $15,000, and you will not be taxed for it.

As stated above, Minnesota has relatively cheap electricity compared to other parts of the country, with average prices of around $0.08/kWh, but this is possible thanks to coal-fired and natural gas electrical power plants. But as you probably heard, electrical utilities are looking to switch over to renewable sources, and unfortunately, the utilities want to pass those costs onto the public to fund these “green” grid initiatives. With this as the backdrop, expect electricity prices to start to rise considerably.

But remember this is good news if you switch to solar power because you will simply be saving even more money!