When we consider the true cost of energy, we need to look at the big picture, not just the rate on the utility bill. Conventional fuels have real social, environmental, and economic impacts. There are annual and cumulative costs that stem from all of the pollutants (airborne, solid, and liquid) emitted from mining, processing, and transporting fossil fuels that impact our public health and the environment. Electricity derived from coal and natural gas will never be able to outweigh the energy and continual resources required to produce it. Unlike conventional energy sources, PV systems produce clean electricity for decades after achieving their energy payback in three or fewer years—this is truly the magic of PV technology.

Grid electricity is paid for as you use it, with payments stretching out forever. In contrast, the majority of PV system expenses are paid for at the time the system is installed. After that, the energy is essentially free. In strictly economic terms, the rate of return for your PV system depends on three things—solar resource; electricity prices; and state policies or incentives. While many utilities sell electricity at affordable rates, inflation as well as energy price history and forecasts indicate price increases in our future, which will make RE systems’ payback even quicker. Historical data reported by the Edison Electric Institute shows that from 1929 to 2005, the average annual price increase for electricity has been 2.94% per year. And according to the Energy Information Administration’s June 2008 Short Term Energy Outlook, utility rates are projected to increase by an average of 3.7% in 2008 and by another 3.6% in 2009. Federal tax credits for renewable energy systems are available, reducing a RE system’s cost, and many states, regions, and utilities also offer substantial rebates, performance-based incentives, tax credits, tax exemptions, loans, and other economic incentives for solar-electric systems.

http://www.energywatchng.com/use-solar-electricity/