Don't be fooled by high-profile solar US companies going out of business. Solar system installations are booming and can still help you save on your heating or cooling costs.
The U.S. solar industry had its second-best quarter in history and is expected to install as much solar power in 2012 as the ten years before 2010, the Solar Energy Industries Association reported Monday.
The industry installed 772 megawatts of solar electric capacity in the second quarter of this year, an increase of 125 percent over the same period last year.
Monique Hanis, spokeswoman for Solar Energy Industries Association, which represents 1,100 companies focused on expanding the U.S. market, said there are about 5,600 U.S. companies, mostly small businesses, in all 50 states that provide solar systems across.
This week, the industry is meeting in Orlando for the Solar Energy Industries Association annual Solar Power International convention.
Solar system costs have come down dramatically over last few years, 30 percent since last year, in part because of the stiff global solar competition, she said.
According to research from the Solar Energy Industries Association, the average price in the second quarter for purchasing solar panels outright was $32,400 for an average-sized system.
Solar water heating systems cost $4,000 to $10,000 depending on the size and technology options.
Third-party financing programs, in major state markets like California, Arizona and Colorado, account for more than 70 percent of total 2012 installations.
Some states offer cash-back programs for installing solar systems on your home or business. The rebates vary on territory, system size and can be based on performance over the course of five years on a fixed dollar per kilowatt-hour basis. For residential properties, this can range from 3 cents to 30 cents per kilowatt-hour.
If you lease a solar system, you are locking in a certain rate that you are paying for your power generated by that solar system for 10 years or more. That rate should be better than what you are currently paying for your electric bill.
"From day one, the savings from your current electric bill is greater than the amount you're paying for the lease system. From a cash flow basis, you are breaking even by paying less than what you would have been when paying electric every month," Hanis said.
Hanis, who is based in Washington, D.C., said solar power can work anywhere, even on cloudy days. She said she often sees the highest solar energy output produced on clear days in February.
In fact, while the sunshine state, California, ranks number one as the state with highest installed capacity overall as of the second quarter of 2012, New Jersey ranks as number two. The remaining three states rounding out the Solar Energy Industries Association's list of the top five installed capacity states are Arizona, Nevada and Colorado.
Here are five tips if you are considering purchasing a solar system:
1. If you get at least five hours of unobstructed sunlight on your roof expanse each day and have high electricity rates you could be a good candidate for going solar, said Hanis.
2. There are two options for consumers: solar PV, or photovoltaic, and solar water heating.
Solar water heating is a popular choice for pool heating and the payback is often in the first couple years, Hanis said.
Consumer Reports tested solar water heaters in October 2010 and found none saved more than 32 percent over standard electric heaters.
3. Hanis said that consumers should request proposals from at least three contractors like for any home improvement project. They should also check references and read contracts.
4. If you lease a solar system instead of paying for permanent installation, Hanis said consumers can often breakeven on the first day if there are fewer upfront costs to the installation. However, consumers are often locked in for 10 years or more in the lease contract.
5. If you think you may sell your home, there may be components in the contract that allow you to transfer the lease to the new owners or to buy out the system that you were previously leasing.