How much is the homeowner willing to pay for energy produced from renewable sources? If utilities are required to increase the percentage of their energy that is produced by renewables, will this take a bigger chunk of your paycheck? Will subsidies, in the form of state, local, utility, and federal tax incentives and rebates provide the fuel for the renewable engine. Is the discount of 40% to 50%, provided by the tax and rebate incentives, a large enough enticement for the typical homeowner to purchase a renewable system? Can the homeowner compete in this market?

The homeowner will most likely have to pay what ever it costs and it will take a bigger chunk of your paycheck. Electricity commercially generated from wind costs 50% more then that produced from coal, and solar costs at least twice as much as the wind energy. Purchasing renewable energy from the utility company now, is simply going to cost you more than that produced from fossil fuels. Even if carbon credits raise the cost of fossil fuel generated electricity above the cost of renewable generated electricity, the consumer is still paying more. The good news is, the homeowner does have some control in this market! By having your own renewable energy system (solar, wind, geothermal, etc.) installed in the home, the homeowner can control the cost of energy they use now and in the future. The homeowner can reduce the uncertainty of the raising cost of energy to a fixed cost over the life of the system.

Giving the homeowner a place in the energy market as a producer as well as the consumer helps achieve the goal of affordable renewables. In the next post I’ll run a simple analysis comparing the cost of the fossil fuel generated electricity used in my home with the theoretical cost of electricity produced by a photovoltaic solar system. This will obviously require a long term investment paid back over a period of years. But as noted above, the tax and rebate incentives now provide an excellent window of opportunity to make this investment more affordable.

How to make renewables more affordable? Do you have any information you’d like to share? Send me a post.