| Solar power is a renewable energy source that | | | | $3,000. In short, the credit is much more |
| is extremely popular, but has a cost problem. | | | | powerful than a mere tax deduction. |
| Net metering is a concept the government is | | | | |
| currently using to offset this problem. | | | | Another area where financial incentives are |
| | | | offered on solar is net metering. Net |
| Solar power works by converting sunlight into | | | | metering is simply the concept of selling |
| electricity. With the abundant amount of | | | | energy back to a utility company at the same |
| sunlight hitting the planet each and every | | | | rate it sells it to you. This concept goes a |
| day, the potential of converting to solar | | | | long way to making solar energy competitive. |
| power is massive. Ah, but there is one | | | | Here's how it works. |
| problem. Solar energy platforms are not very | | | | |
| efficient. Solar cells currently only convert | | | | Assume you buy a solar panel system for your |
| sunlight to energy at roughly 8 to 13 percent | | | | home. Your high energy needs tend to happen |
| depending on the system. This lack of | | | | early in the morning and later in the |
| efficiency means you must buy large, bulky, | | | | afternoon. During the week, you have nominal |
| expensive solar panel systems to meet your | | | | energy needs during the day when you are at |
| energy needs. Much research is being done in | | | | work. So, what happens to the energy being |
| the field of nanotechnology solar cells to | | | | produced by the solar panels during the day? |
| improve this problem, but the answer is a few | | | | Well, you can sell it back to the utility |
| years off. So, what can you do to deal with | | | | company. This is called being "on grid", with |
| the cost issue today? | | | | the grid being the platform the utility uses |
| | | | to deliver energy to communities. With net |
| The government tries to promote certain | | | | metering, the energy produced by your panels |
| conduct in two ways. First it makes things | | | | is fed back into the grid. Your utility meter |
| illegal such as drug use. Second, it creates | | | | literally spins backwards. You are selling |
| financial incentives and penalties to try to | | | | electricity to the utility during the day. At |
| guide our conduct. Taxes on cigarettes, for | | | | night, you draw energy off the grid. The end |
| instance, are high and try to motivate us not | | | | result is you owe little or nothing to the |
| to smoke. Tax credits offered for the | | | | utility company at the end of the month. This |
| purchase of hybrid cars is an example of | | | | will save you a thousand dollars or so each |
| using incentives to promote an activity. | | | | year. |
| | | | |
| When it comes to solar energy, the government | | | | Net metering is currently a state concept. |
| realizes that there is a cost problem. It | | | | While over 40 states have laws on the books |
| tries to resolve this in a number of ways. | | | | requiring utilities to allow net metering, |
| The first is to offer tax credits for buying | | | | there is no federal standard. That may be |
| solar panel systems. Tax credits are a | | | | about to change. Federal law now requires all |
| tremendous financial benefit. They work by | | | | states to consider whether they wish to enact |
| reducing the tax you owe dollar for dollar. | | | | net metering legislation by 2008. Most are |
| For instance, you might figure out your taxes | | | | expected to pass such laws. When this occurs, |
| for this year and find out you owe the IRS | | | | net metering will be a cost cutting solution |
| $5,000. If you can claim a tax credit for | | | | to the solar power energy problem, making it |
| $2,000, you would end up owing the government | | | | a more viable energy source for you and me. |