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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowFarms have a greater chance than homes of saving money with solar, according to a recent study by Purdue University energy economists.
The probability of saving with solar rather than standard grid electricity is 92 percent for Indiana farms and about 50 percent for homes, Wally Tyner and graduate student Jinho Jung found.
“Under current law and policy, whether you lose or make money with solar as an Indiana homeowner is like throwing the dice—you don’t know,” Tyner said.
If homeowners could depreciate the cost of solar like farms can, their chances of saving would rise to about 90 percent.
In Indiana, three policies provide tax-paying homeowners with incentives for using solar energy: net metering, which allows consumers to sell excess solar electricity back to the grid; financing through a home equity loan with tax-deductible interest; and a federal tax credit for 30 percent of the installation costs of solar energy systems.
Farms can depreciate their investment in solar in addition to the three policies.
Tyner and Jung also found that solar won out over coal when the playing field is leveled by removing the federal tax credit from solar energy, since the credit is not available to coal power companies; adding depreciation to home solar energy systems, since coal power companies can depreciate their building costs; and applying a carbon tax to reflect the fact that solar energy does not emit carbon, unlike coal power.
In the scenario, Indiana farms and homes would have about an 84-percent chance of saving money by generating electricity from solar rather than coal power.•
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