Here’s what you need to know about home solar systems and whether one could save you money…

THE LEASING ALTERNATIVE

Some suppliers now offer the option of leasing photovoltaic systems (also known as solar electric systems). Under these lease agreements, the supplier owns the equipment and collects all solar power tax incentives. The home owner makes a fixed monthly lease payment but, compared with buying the equipment, enjoys a greatly reduced up-front payment. In some cases, there is no up-front payment at all.

Leasing solar to provide your home’s electricity could be a smart move for you if…

You pay less each month to lease the system than you would pay for the electricity that the system replaces.

You don’t want to spend $25,000 to $35,000 or much more up front to buy and install equipment.

Lease terms can vary greatly, so shop extensively before signing a contract. Solar leases often last 15 to 20 years and might contain substantial penalties for early termination, so read contracts very carefully. Make sure that the provider pays maintenance and repair expenses and that you can arrange to remove or relocate the system or transfer the lease if you sell the home.

Helpful: On rooftops in the US, southern exposure is the best position for the solar panels that are used to supply electricity to the home. A solar system is unlikely to be cost effective if tall trees or buildings block your home’s southern exposure.

Among the large solar companies offering leases are SolarCity (888-765-2489, www.SolarCity.com)…SunPower (800-786-7693, http://us.SunPowerCorp.com)…Sunrun (855-478-6786, www.SunrunHome.com)…and Sungevity (866-786-4255, www.Sungevity.com).

SOLAR WATER HEATERS

Unlike whole-house photovoltaic systems, solar water heaters are economically viable across much of the US now. They can cost $4,000 to $10,000 installed, but they qualify for the 30% federal tax credit. State incentives might be available as well—visit the US Department of Energy’s Database of State Incentives for Renewables and Efficiency (www.dsireusa.org) for details. Payback can come in as little as three to five years for households in Sunbelt states that have high electricity rates and use lots of hot water…or five to 10 years elsewhere.

Solar water heaters typically use rooftop solar collectors to heat an antifreeze solution, which is pumped to a heat exchanger where it warms water. Depending on your solar package, this warmed water can feed into a conventional water heater, which also can provide backup. Because the water entering the water heater is already quite warm, the heater doesn’t consume as much electricity, gas or oil to heat the water to the desired temperature. The typical household can reduce water-heating costs by 50% to 80% without any loss of comfort.

SOLAR ATTIC FANS

Standard attic fans reduce your air-conditioning bills by blowing hot air out of the attic in warm weather, reducing the temperature differential between the attic and the living space below. Problem: An electric attic fan can generate annual electricity bills of between $150 and $250.

In contrast, solar-powered attic fans are money savers. They often cost just $500 to $750, plus $150 to $300 for installation. Installation is simple, so many home owners do it themselves—solar attic fans don’t even have to be wired into the home’s electrical system.

The fans qualify for the 30% federal tax credit and occasionally for state incentives, too. They tend to pay for themselves in two or three years in the Sunbelt and in three to six years elsewhere.

Leading makers include SunRise Solar Inc. (219-558-2211, www.SunRiseSolar.net) and Natural Light Energy Systems (800-363-9865, www.SolarAtticFan.com).

SOLAR POOL HEATERS

A solar pool heater is likely to cost $3,000 to $4,000 and raise a pool’s temperature by perhaps 10 to 20 degrees. If you currently use an electric or gas pool heater, switching to solar could pay for itself in about two to seven years, depending on local electricity and gas rates and how frequently the heater is used.

With the typical solar pool heater, pool water is pumped through pipes to black polymer panels mounted on a roof—or some other sunny spot—then back to the pool. It is like leaving a garden hose lying on a driveway on a hot summer day—the water inside soon becomes quite warm. These panels must be drained or brought inside before the first winter freeze. (Higher-end “glazed” solar collectors are more freeze-resistant and can be used year-round.)

Solar pool heaters are not eligible for the 30% federal tax credit. Some states offer tax incentives, and some utility companies may have incentives for their customers.

Leading makers include Heliocol (800-797-6527, www.Heliocol.com) and Fafco Solar Water Heating (800-994-7652, www.Fafco.com).

HOW TO ESTIMATE YOUR SOLAR SAVINGS

The US Department of Energy’s National Renewable Energy Laboratory Web site offers a tool called “PVWatts” (www.nrel.gov/rredc/pvwatts/about.html) to help home owners estimate how much a photovoltaic system will reduce their energy bills based on factors such as local climate, electricity rates and the number of solar panels.

The systems typically cost $25,000 to $35,000 or more installed. A federal tax credit available through the end of 2016 can cover 30% of the cost of both equipment and installation. Some states and utilities offer additional financial incentives as well.

Helpful: To learn what incentives are available in your area, visit the Web site of the US Department of Energy’s Database of State Incentives for Renewables and Efficiency (www.dsireusa.org) or contact local solar installers.

Photovoltaic systems work best in sunny areas, but they tend to make the most financial sense in states that have both relatively high electricity rates and generous tax incentives. In such states, the systems can pay for themselves in as little as a decade and eventually save the home owner tens of thousands of dollars.

Examples: California, New Jersey and New York have especially high electricity rates and attractive incentives. Colorado has strong incentives, too, but relatively low electricity rates.

The typical photovoltaic system may reduce household electricity bills by 50% or so, though this varies widely. Homes with these systems usually remain connected to the power grid and automatically draw power from the grid only when their power needs exceed the power supplied by their solar panels. And their power meters actually run backward when their solar panels provide more power than they need—they’re effectively selling power to the electric company.

With insufficient incentives or the wrong conditions, savings from a solar system providing electricity to your whole home might not pay for the initial cost for at least 20 years.

To find solar installers in your area, use the “Certified Locator” tool on the site of the North American Board of Certified Energy Practitioners, an independent certification organization (www.nabcep.org), or enter your state’s name and the words “solar installer” into an Internet search engine. Contact your state’s contractor licensing division to confirm that the installer you’re considering is properly licensed.

Lean toward installers who have been working with solar systems for at least five years and have completed dozens of installations.

Source: Jason Szumlanski, operations manager for Fafco Solar Energy, based in Cape Coral, Florida, which has been installing solar-powered products since 1974 and deals with every major solar manufacturer. Szumlanski has worked in the solar industry since 1999, previously installing solar systems in the Caribbean.