With so many state and federal incentives for alternative energy now available, we think it makes sense to take a look at the types of solar systems that are available for residential use. We recently spoke with Jack Bingham, owner of Sea Solar Store in Dover N.H., to find out how to make sense of the solar options currently available.
According to Jack, there are two primary solar energy systems to consider: hot water and electric solar collectors. Of the two, hot water systems are the most “mature” product, meaning that they’ve developed to a point where there aren’t any significant pending innovations. “Solar hot water systems are for the most part 65% efficient,” he said, “and can pay for themselves in energy savings in 5-6 years.”
Solar hot water systems are generally easy to maintain, and can last about 25 years before needing upgrades. Solar collectors work best in climates with the most sunlight hours, but even in the northern climates, can offer significant savings by just introducing pre-heated water into the domestic water system.
Solar Electric Systems
Solar electric systems can be more complicated, depending on which configuration you decide is right. Solar electric systems can be tied into your utility’s electrical grid, so that electricity that is generated is fed back into the system. As a result the meter runs backwards, and your energy consumption and bill is reduced by the amount of energy your collector provides. Some homeowners add battery arrays to the solar collectors to use as back up to the utility or as an emergency source of power.
Another option is to elect to not “tie in” to the utility grid at all and rely on battery storage for all electrical power. This 
option may make sense to home or camp owners who are located in remote areas, where infrastructure costs of connection to a utility line are very high.
Solar collection batteries are about 2-3 times the size of a car battery. Depending on electricity requirements, eight to sixteen batteries are needed to store enough electricity to run an average home for several days. Solar collector batteries require some maintenance and monitoring, as well. “With an off-grid setup, families will need to manage every watt used in the home very closely,” Jack explained.
Calculating power and payback
To help determine annual watts production, you’ll want to check out the National Renewable Energy Laboratory’s PV Watts Calculator. This calculator will help to determine the potential for electrical production based on geographic location, corresponding meteorology data, array size and the orientation and tilt of the panels
To calculate the return on a solar system, first subtract any rebates or tax credits from the initial cost of installation. You can identify additional tax or utility incentives by looking at your state’s programs listed on the Database of State Incentives for Renewables and Efficiency (DSIRE) The PV Watts calculator will estimate total annual kilowatt production and cost of power generated based on your system size and cost of electricity.
Total Cost — Tax credits and rebates
Annual value of kilowatts produced = Years needed to recoup cost
If you assume that electric rates will continue to rise at the 20-year average of 1% per annum, the payoff will be quicker. If you consider the potential cost to utilities of building smart grids and adding production capacity, the rates could rise much faster making the payoff shorter and even more attractive.
“What many people are finding is that a combination of solar hot water and solar electric with a grid tie-in covers both bases,” said Jack, “Because who can predict how much electricity will increase in the coming years?”