NCPA - National Center for Policy Analysis

Solar Panels Not Economical

March 9, 1998

Many homeowners have become disenchanted with the solar thermal panels they had installed on their roofs in the aftermath of the 1970s energy crises. Some have had them disconnected and hauled away.

Yet President Clinton wants to offer a 15 percent tax credit to encourage their installation. There would be a $1,000 cap for solar thermal panels, which heat water or antifreeze for space heating or making tap water hot. There would be a $2,000 cap for photovoltaic panels, which convert sunlight directly into electricity. Clinton envisions installation of another one million panels by 2010.

  • But experts estimate some 30 percent of panels have been junked by disillusioned homeowners.
  • In 1979, Congress passed a 40 percent tax credit for solar thermal panels and about one-half million systems were installed.
  • The market dried up, however, when the credits were withdrawn in 1985.

Experts say photovoltaic systems make sense for isolated areas where running electric transmission lines would be prohibitively expensive -- but not for suburban homes, where even with the $2,000 subsidy, a $4,000 system wouldn't achieve payback for 50 years. Homeowners' objections to solar thermal panels range from lack of savings on energy bills to plumbing problems and their unsightliness.

Source: Kelly Barron, "I'm Greener than You," Forbes, March 9, 1998.


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