Rooftop solar is the #10 most effective strategy for reversing global warming. By reducing the need for installing additional large utility-scale power plants and burning fossil fuels to generate electricity, citizens can be a part of the solution to climate change in a visible and impactful way.

At Alto Sustainability, our rooftop solar photovoltaic energy system (PV) produces electricity that we also use to charge up our electric vehicle. This allows us to simultaneously reduce our dependency on both coal for electricity and petroleum for driving, thereby taking our energy future into our own hands.

Rooftop solar is becoming the standard for many new home developments. In fact, California requires solar to be installed on new homes beginning in 2020.

Rooftop Solar Photovoltaic System at Alto Sustainability’s Office

Here’s a breakdown of the cost of a rooftop solar system using our own system as an example:

Installed Costs

The financial benefits outlined in the Drawdown book assume an installed cost for rooftop solar of $1.883/Watt. For comparison, our office installed a 4.225 kW grid tied solar system in 2017 for a total cost of $15,186 before tax incentives. This equates to an installed cost of $3.59/Watt, or about twice as high as the future costs predicted in the Drawdown book.

Solar PV Canopy at California Academy of Sciences

Tax Incentives

During 2017, our system qualified for two tax incentives: a federal tax credit of 30% of the gross installed cost, and a state (Oregon) tax credit of $5,492 (based on the size of the system, with a cap at $6,000). Our city government also provides a rebate of $0.50/Watt for residential solar systems (worth $2,112 for ours), which our system did not qualify for based on partial shading in one corner (on one of the thirteen panels) from a backyard tree. Based on these incentives, the net cost for our 4.225 kW grid tied solar system comes out to $5,138 after tax credits. This equates to an installed cost of $1.21/Watt after tax credits.

It’s worth noting that the state tax incentive we received expired at the end of 2017, and if we installed the same system today without that benefit, the cost would increase to $2.51/Watt. This is why it’s so important for local, state, and federal governments to maintain these financial incentives for business owners and homeowners to install rooftop solar equipment!

Do the math – solar energy saves you money!

Net Metering

Net metering is the process by which the utility provider pays the solar system owner for excess electricity produced. For example, if our system produces 1,000 kWh in July and we only consumed 800 kWh, we get a refund on our utility bill for 200 kWh at full retail electricity rate. The refund is credited towards the next month’s utility bill (so the high producing sunny summer months can offset the lower producing cloudy winter months), and at the end of December any excess credits are paid to us at 1.25x the highest block for the city’s residential electric rate (i.e. about $0.10/kWh). Many utility providers offer net metering, so be sure to check with your provider before calculating the costs of your own system.

Solar Canopies at the Rogue Valley International-Medford Airport

Expected Payback & Return on Investment

In calculating the expected payback for our system, we can look at the simple payback of the installed cost ($5,138 after tax credits) compared to how much electricity costs we save each year. Based on current data from October 2017 through May 2018, our system generates an average of 430 kWh per month, or $37 per month, for an annual electricity savings of $444 per year. This results in a simple payback period of 11.5 years (less than most mortgages). This means that after 11.5 years, the system will have paid us back what we paid for it, and all the extra electricity produced is just extra savings going forward!

Looking at the ROI (return on investment), our initial investment of $5,138 after tax credits saves us $444/year, for an ROI of 8.64%. This is comparable to a similar investment in a balanced index fund such as the Vanguard Balanced Index Fund (consisting of 60% stocks and 40% bonds, with an average annual return of 8.11%), without the volatility of the stock market. If you’re looking for a stable investment to diversity your portfolio, definitely give rooftop solar a look!

Sunshine = Renewable Power

Financing Alternatives

Many financing options are available for rooftop solar systems (after all, you do have to pay the larger initial installed cost and then wait for the tax credits in most cases). For example, in Florida the First GREEN Bank offers fixed-rate residential solar loans and even has a residential solar energy savings calculator you can use to estimate your cost savings. Other options include traditional loans like home equity line of credit loans and the Fannie Mae HomeStyle Energy program.

Depending on where you live, you may also be eligible to participate in a third party ownership program (through leases and power purchase agreements, think “renting your roof”) like Tesla’s residential solar program (formerly Solar City). Did you know that 44% of US residential solar is owned by third parties?

Charging Up the Chevy Volt with Solar Power

Actions You Can Take Today:

  • Use Google’s Project Sunroof to estimate the potential for solar power at your home
  • Research the financial incentives available for your home using the Database of State Incentives for Renewables & Efficiency (
  • Look at your electricity bills for the last year to see how much you could be saving with rooftop solar!

Related LEED® v4 Credits:

  • LEED BD+C, EAp Minimum Energy Performance (required)
  • LEED BD+C, EAc Optimize Energy Performance (1-18 pts)
  • LEED BD+C, EAc Renewable Energy Production (1-3 pts)