Solar Power - A Maryland Guide to Saving Money With Solar Power

A Maryland Guide to Saving Money with Solar Power

Contents:

Part 1: Solar Power Basics

The Benefits of Solar Power ........................................................................ 1

Types of Solar Panels .................................................................................. 3

Selecting Solar Panels for your Home ......................................................... 4

How Photovoltaic Systems Work ................................................................ 4

Part 2: Is Solar Right for You?

Site Requirements ........................................................................................ 6

Installation & Maintenance ........................................................................... 7

Part 3: Costs & Incentives in Maryland

Federal & State Incentives ........................................................................... 8

Financing Considerations ............................................................................ 11

About Solar Gaines

Who We Are .................................................................................................. 13

1


On the surface, harnessing the power of solar energy seems overwhelming, and costly. However, when a

consumer weighs all of the benefits, the initiative seems to make more sense. No matter which side of the

environmental/political divide you fall on, the benefits of solar power cannot be denied. The next time you learn of

a neighbor or a business in your area ‘going solar’, there is a bigger picture involved. They may have weighed any

combination of these benefits to invest not only in their future, but in the future of safe, earth-friendly resources.

The Benefits of Solar Power

Residential solar energy offers a number of benefits beyond more traditional heating and

electrical systems. It boosts the value of your home and reduces utility bills. In addition to

saving money each month, there are also local, state and federal government tax incentives

and rebates for homeowners who make the switch to solar energy. Using solar power

also means that your home’s carbon footprint is reduced, which is a big benefit for the

environment. Your switch to solar energy might also encourage neighbors to start using

residential solar energy as well, making an even bigger beneficial impact on the environment.

Common Sense Energy

The Sun is the world’s most abundant energy resource, producing 10,000 times the world’s total energy usage.

Why not use it?

Investment in the Future

The United States is on track to be the 4th largest solar market. Businesses and homeowners are working

together to make solar energy become a reality, investing in the future of our earth’s natural resources. Traditional

energy sources (oil, coal) will not last forever. Solar energy, in contrast, is non-polluting, emitting zero carcinogens

into the air keeps water supplies clean, and is not in danger of running out anytime soon.

boost your home value &

reduce utility bills

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Economic Development

According to Energy.gov, clean energy announcements could

lead to as many as 37,409 new jobs with clean energy job

projects. This information was projected for 2012, and do not

include clean energy initiatives and statistics for 2013.

Tax Incentives

Local & Federal governments are offering tax incentives to

residential and business solar initiatives. A local solar energy

provider should be educated on these incentives, and can guide

consumers to realize the most tax savings.

Easy Solar

Harnessing the power of solar energy is easier than ever before.

New construction projects can utilize “passive solar energy” to

maximize the power of solar for heating and cooling a home. The

days of solar panels as the only means to improve solar power

usage are over, and construction professionals can incorporate

solar initiatives into design and build projects. Visit Energy.gov

Passive Solar Heating & Cooling article for more information.

Utility Savings

According to the U.S. Energy Information Administration,

the Northeast is expected to experience a 3% reduction in

temperature for 2013. Homes and businesses heated with natural

gas, propane, & electricity will experience higher costs this year.

Incorporating long term solar initiatives into heating systems

would help residential and commercial customers create a long

term utility savings plan.

Geo-Political Benefits

Relying on countries who are unstable or dangerous to the world

for fuel is an unfavorable position for the United States to remain

in. Solar technology and initiatives have the potential to eliminate

dependence on foreign countries who possess the fossil fuels we

currently use.

Solar energy provides an efficient and eco-friendly way to heat

your home and power lights, electrical appliances and electronic

items. Solar panels reduce energy usage significantly, yet still

provide for a fully powered and comfortably heated home.

Solar Energy and Higher Property ValuesBecause solar energy helps you save on

your electricity bill, it’s an investment that

pays for itself many times over the 25+

year lifetime of your installation.

Solar energy can also fetch you a

much higher asking price when it

comes time to sell your home. An average

sized installation on a $500,000 property

can add $20,000 or more to the retail value

of your home – an amount that exceeds

the average cost of most residential solar

installations, meaning you could not only

be reducing or eliminating your electricity

bill but also getting 100% of your money

back when and if you sell the home. By

contrast, most kitchen remodeling

projects only deliver returns of 60%.


3

Types of Solar Panels

Solar technology is improving in power and efficiency. New

financing opportunities and government incentives have also

contributed to lower costs.

Significant price reductions have made solar a good choice for

home owners. With the cost of electricity rising throughout the

Mid-Atlantic, solar panels reduce your energy expenses, while

providing safe green electrical power for your home.

Since 2010, solar use has increased at a rate of 200% per-year in

the Mid-Atlantic, exceeding one gigawatt, enough to power more

than one million homes on sunny days.

Major types of solar panels are:

Monocrystalline solar panels (MSPs): With the highest energy efficiency rating (15%-25%), MSPs are also the most space-efficient, requiring the least amount of roof-space to provide the highest level of electric power. However, their high cost can limit their value for residential use.

Polycrystalline silicon solar panels (PSSPs): With an efficiency of 14%-17%. PSSPs demonstrate a marginally lower heat-tolerance than MSPs, which effects their residential performance only minimally. Lower cost is a real advantage for some home owners.

Thin film solar panels (TFSPs): Cheap and easily mass-produced, TFSPs have efficiencies of 8%-14%, but are of limited residential use because they require more roof-space than other models to produce equal quantities of electricity; they also degrade faster than other panel types.

Building-Integrated Photovoltaics (BIPVs): Solar energy built as integral components of walls, windows, facades of homes, as well as the roof. BIPVs efficiency is offset by its expense, excessive for most home owners.

Amorphous silicon cells (a-Si): With a low power output and efficiency rating (6%-8%), a-SI cells are seldom used in solar panels or for residential purposes, although these applications exist. Their function is generally confined to smaller uses, like calculators.

Copper indium gallium selenide (CIGs): Less toxic and more efficient than most panel types, CIGs have only recently (2011) begun commercial production. CIGs are suitable for residential use, but remain expensive, a condition that will diminish with wider-scale production in the future.

Organic photovoltaic panels (OPCs): Like CIGs, OPCs have only recently become practically viable for large-scale use.

Calcium telluride panels (CdTe): Although they have a peak efficiency of 15%, lower-cost CdTe panels average 8%-12%; their thin-film version has many residential uses.

Since 2010, solar use has increased at a rate of 200% per-year in the Mid-Atlantic


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Selecting Solar Panels for Your Home

Critical judgment needs to be exercised when choosing the best type of solar panels for your home. Among the

most important considerations are:

Product capabilities:

The standard solar panel measures 5 1/2-feet high by 3 1/3-feet across.

Power output varies between 250-345 watts per panel. Lower wattage

is less expensive to purchase but also generates less power; higher

wattage is more costly, but provides more energy for home use. They

cost about the same to install and maintain.

Local energy rates:

You’ll pay less for electricity with solar. Homes using more electricity

experience a higher return on investment (ROI), with solar, as their bills

decrease proportionally to their non-solar bills.

Impact on your home:

Panels have long-term effect on your roof’s durability. Properly installed,

they actually protect the areas underneath them from potential

damages caused by bad weather and the elements. They also provide

an additional level of insulation for rooms directly beneath them.

Panel maintenance:

Post-installation maintenance of your home solar array tends to

be minimal, since panels have no moving parts requiring repair or

replacement. Cleaning panels periodically prevents build-up of residue

that can interfere with their efficiency and performance. Panels lose

as much as 0.5% of their function each year; in 30 years, they’ll be

only 15% less efficient than they were when new, another indication of

favorable long-term ROI.

Warranties, insurance, taxes:

Panel warranties run between 20-25 years. Home insurance for panels ranges between $10.00-$15.00/month.

Panel installation does not add to residential taxes.

Crystalline MSPs and PSSPs remain the optimal choice for most homeowners. More efficient MSPs are also

significantly more costly to install and use; PSSPs work better for many. TFSPs are efficient, but their spacial

requirements limit their residential application. CdTe panels may be plausible if your home can support their use.

BIPVs, CIGs, and OPCs should expand market share in the future, but MSPs and PSSPs are the best current

choices for most homes.

How Photovoltaic systems work

If you have ever wondered how photovoltaic systems work, it can be a potentially confusing process to

understand. For most people who are not familiar with how photovoltaics work, the idea can almost seem too

good to be true. Once you understand the basics, the choice to install solar panels becomes a balance of the

short-term costs versus the long-term savings you can reap from it.


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Solar PV Systems Versus Solar Thermal Systems

One important factor when it comes to how photovoltaics work is to differentiate them from solar thermal systems.

Simply put, solar PV is different from solar thermal because the former is an electrical operation and the other is

a plumbing operation. The work of building a solar PV system is completely different from that of a solar thermal

system - so it is only really important to understand that these two types of systems are not directly related.

Power From the Sun

The basic understanding of how photovoltaic cells work comes down to understanding that the entire process is

about the conversion of energy. When the sunlight strikes a solar PV system’s panels, this energy is transferred from

being light to being direct current or DC, which is the same kind of energy that powers your car’s batteries or the

batteries of electronic devices.

Steps to Solar Collection

The first step in how photovoltaics works is to receive the

sunlight on the panels. This is typically done through having

as direct of an angle of sunlight on the panels as possible.

Sunlight is composed of particles that make up light and are

known as photon, and these photons strike the solar panels

whenever the sun comes out. Generally a solar panel is made

out of a semiconducting material like silicon. These materials

will react with the photons from the sunlight and this is how a

photovoltaic cell such as those in solar panels produce power

that you can use in your home.

The second step of how photovoltaics work involves another type of subatomic particle known as an electron.

Electrons are in almost every kind of matter orbiting around the nucleus of atoms, and the unique makeup of solar

panels allows the photons that strike the panel’s surface to excite the electrons from their normal orbit within the

atoms of the panels. From this point, the electrons move through the cell until they reach an electrode that allow

them to be transferred outward through wires that are attached to the panels. After this, the panels are connected to

inverters that change the direct current into alternating current or charge a battery with power that can be used later

on and allow your home to be powered through sunlight.

Solar Panel Efficiency

From the point when the panels receive photons from the sun, the DC current that they produce comes as a result

of certain types of efficiency that the individual panels carry. There are four different types of efficiency: reflective,

thermodynamic, charge carrier separation and conductive efficiency. Taken in aggregate, these four types of

efficiency work together to determine how efficient a given panel is at producing functional power from a certain

amount of sunlight that finds the panel.

More Than Just Light

Solar panels do not necessarily just absorb light that you can see. In some cases, they also have a material known

as lanthanide incorporated into them. This kind of additional material allows harmless heat or infrared radiation to

also be converted into usable light that the panels can use to produce the kind of energy that your home needs.

There are several different types of solar panels that you can look into having installed.


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You might be surprised to find out that Maryland offers some of the best conditions for solar panels and photo-

voltaic energy production. Ranked among the top 10 states to install home solar power systems for 2013, the

Chesapeake Bay state is pursuing alternative energy in a big way. The local economic, political and financial

conditions make now an attractive time to investigate home solar.

Take some time to do your homework before taking the plunge into home solar. Knowing the best conditions to

work efficiently requires understanding how the equipment works, where to put it and how to get the most out of

home solar power systems. You need to look at your site, your finances and local conditions before installation.

Site Requirements

Your property will dictate a lot of what you can do when installing solar panels. Optimal

conditions include good positioning with attention paid to pitch and shade. Your roof

must be free of shading from tall trees, other buildings and face towards the south.

Most of Maryland receives nearly 5 kilowatt/hours of productive sunlight. To get the

most from them, the optimal position for your panels is 180 degrees true south.

The next consideration is tilt. Tilt is the angle at which the panels are positioned to get

optimum results. Your installer technician can advise you as the best conditions for

solar panels in your area. The median best tilt for solar panels in Maryland is around 39

degrees but you can fine tune it in your local area to get optimum results.

Your roof may not be facing near enough to true south, has a poor pitch for placement or may be blocked by

heavy shade. The good news is that you still have options for installing a home solar power system. Ground

mounted systems can offer the best conditions for solar panels to work efficiently and do not cost a great deal

more than roof mounted systems.

Remember, the best conditions for solar panels at your place are not going to be exactly the same as your neighbors.

Marylandis a top 10

ranked state to install solar power

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Installation & Maintenance

Having a solar energy system installed might seem complicated,

but it’s actually a straightforward process. A contractor

determines the best positioning for the solar panels and creates

the best design for your new system. After reviewing and

accepting the proposal, construction is scheduled. The contractor

also helps file the necessary paperwork with the utility company

and county. The actual construction part of the process takes

from a few days to a few weeks, depending on the size of the

project. Once it’s completed, the contractor helps fill out the

paperwork for any incentives and rebates for which you qualify.

You’ll also learn more about how your new solar panels work and

how to keep them in good condition.

Inspecting panels prior to installation

As a general rule, panels either work efficiently right out of the

box, or they don’t. So as a first step, a trained installer will always

thoroughly check the condition and voltage of each panel once

removed from the box. If a panel is not perfoming at 100%

efficiency, it will be replaced by one that is. Moreover, once a

solar array has been successfully installed, problems are unlikely.

Ongoing maintenance

So why so much debate about maintenance?

Solar panel maintenance has become a bit of a hot topic thanks

to the industry itself. Specifically, many companies that lease

solar panel systems will use maintenance as a selling point.

After all, if you don’t own the system outright, you don’t have to

maintain it, right?

These entities promise to provide ongoing maintenance services

at no additional cost. This makes their products and plans all the

more appealing to homeowners who are looking to sidestep the

costs of any necessary upkeep. Recognizing that the required

maintenance for these systems is minimal is therefore, vital for

making an informed purchase decision.

The facts about solar panel maintenanceMuch of a solar array functions a lot like

the electrical wiring in your home. These

systems do not have moving parts, they

are simply used for carrying current. Absent

of movable components, the likelihood of

issues is minimal.

As for ongoing maintenance, the

requirements are nominal. While the

homeowner can use a standard garden

hose to gently rinse off debris such

as pollen on a yearly basis, this is not

a required step. A properly installed,

fully functional solar array will continue

producing efficiently, with only periodic

maintenance from either the homeowners

or the installers.


8


Electricity prices are on the rise… again. Over the entire U.S., every geographic region and consumption

sector (e.g., residential, commercial, etc.) is experiencing rising prices. In all, U.S. residential electricity prices

increased this year by 3.1%. That is the highest growth rate since 2008 and is mainly due to higher fuel costs

for power generation. Residential prices are projected to increase by 2.4% during 2015.

Maryland electric rates are 13th highest in the entire country. And, state prices are increasingly more rapidly.

Over the last four years, rate hikes have moved prices higher. Over the eight years, prices have increased 43%

in Maryland, compared to 24% nationwide.

Utility companies like BGE, Maryland’s largest utility provider, are seeking approval for new rate hikes. These

rate hikes will move prices higher, upwards of $15 a month for customers that use both electricity and natural

gas. Counting the new proposal to increase prices, rate hikes over the last 3-4 years have added $25 per month

to the average residential monthly bill. When will the price increases end?

BGE also projects another rate hike (five rate hikes in five years) in 2015 to cover the

cost of replacing older analog meters to smart meters. This cost will be passed onto

consumers. Future infrastructure improvements are used as rationale to raise prices

now – but many opponents argue that this logic isn’t valid. Prices should only increase

when infrastructure improvements and upgrades are actually being made, not planned.

But avoiding the negative impacts of long-term increases in energy prices isn’t as

hard as you think. Residential customers that invest in a solar power system receive

incentives to reduce the total cost of ownership: net metering (utility credits you for

power production), feed-in tariffs, solar tax credits, rebates, and solar renewable energy

credits.

Federal & State Incentives

Maryland-Solar-Ground-InstallationSwitching to solar energy not only makes your home or business more

environmentally-friendly, but can help fill your pockets with a little more green thanks to numerous federal, state

and local incentive programs.

Over the last 8 years, the price of electricity

in Maryland has

increased 43%

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Federal Incentives for Solar Power

The U.S. government offers a broad array of incentives for

residential and commercial renewable energy users. Depending

on the type of property owned or solar product installed, you

could be eligible for tax deductions or exemptions, tax credits

or federal grants or loans. A complete list of available federal

incentives and policies for renewable is available at the U.S.

Department of Energy | Energy Efficient and Renewable Energy

website.

Maryland State Incentives for Solar Power

In addition to enjoying state tax-exempt status on the sale and

use of solar energy equipment, Maryland residents are eligible

for a variety of state and local incentives when switching from

traditional energy systems to renewable energy systems.

The state incentives include:

Grants and rebates – Homeowners, businesses, local

governments and nonprofits choosing to install renewable energy

systems may qualify for financial incentives from the Maryland

Energy Administration (MEA).

The Maryland Energy Administration (MEA) administers a Solar

Energy Grant Program providing a maximum rebate of $10,000

to homeowners, businesses, local governments and non-profit

organizations that install solar water-heating systems or solar-

electric (PV) systems up to 20 kW. Both grid-connected and off-grid

PV systems are eligible for support.

The MEA also offers a Mid-Size Solar Energy Grant Program for mid-

sized photovoltaic (PV) systems sized between 20 kW and 200 kW and

solar water heating systems (SWH) with an area of at least 100 square

feet installed by businesses and non-profits.

In addition to renewable energy grants, the state administers the

EmPOWER Energy Efficiency and Conservation Block Grants

funded through the American Recovery and Reinvestment Act (ARRA).

The State of Maryland has been allocated approximately $52 million

in funding for the U.S. Department of Energy (DOE) Energy Efficiency

and Conservation Block Grant (EECBG) program. The ten largest

Maryland counties and the ten largest Maryland municipalities, based

on population, are eligible to receive EECBG grants directly from DOE.


Average energy

savings in Maryland is $56 a month!

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SREC (Solar Renewable Energy Credits) – SRECS can be

sold to electric companies or other buyers in order to increase

the economic value of installing a solar panel system. By law in

Maryland, electric utilities companies must use renewable energy

sources to provide electricity. A portion of this requirement often

comes from the purchase of SRECs. 1 SREC is equivalent of 1

megawatt-hour (MWh).

Clean Energy Production Tax Credit – The state of Maryland

offers a Clean Energy Production Tax Credit for electricity

generated by wind, geothermal energy, solar energy, hydropower,

hydrokinetic, municipal solid waste and biomass resources.

Available only as a corporate tax credit.

Loans – Local governments, non-profits, businesses and

homeowners who install energy efficiency improvements may

also qualify for low interest rate loans offered through various

state programs.

Local Incentives

According to the Maryland tax code, local jurisdictions can offer

property tax credits for the installation of solar and geothermal

devices that improve energy efficiencies as well as for buildings

that meet certain high performance building standards outlined

by the U.S. Green Building Council (USGBC).

Current local tax credits include:

Arundel County offers a one-time Solar Property Tax Credits

for residential dwellings that use solar for water heating and

electricity generation and a High Performance Dwelling Property

Tax Credit for buildings built on or after July 1, 2010 that meet or exceed USGBC LEED Silver standards.

Baltimore County also offers a one-time Solar and Geothermal Equipment Property Tax Credits Property Tax

Credit for High Performance Buildings and Homes for new and existing residential and commercial buildings

that meet certain high performance building standards or provisions for energy efficiency improvements.

Carroll County offers a Green Building Property Tax Credit for buildings used for business, commercial or

industrial purposes that meet certain green building standards.

Harford County offers a Property Tax Credit for Solar and Geothermal Devices used to heat, cool or generate

electricity for on-site consumption for both residential and nonresidential buildings.

Howard County offers a Residential Solar and Geothermal Property Tax Credit for county property owners

who install certain renewable energy devices and a High Performance Building Property Tax Credit on new

and existing multi-family residential and commercial buildings that meet certain high performance building

standards.


You can take advantage of

Federal, State & County tax credits together to save $1,000’s on solar.

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Prince George’s County offers a Solar and Geothermal

Residential Property Tax Credit on residential structures equipped

with solar and geothermal systems.

Montgomery County offers property Residential and

Commercial Solar and Geothermal Tax Credits on owner-

occupied, modified multi-family and commercial buildings that

meet high performance building standards.

You can find a comprehensive list of available Maryland

incentives at the U.S. Department of Energy’s Database of State

Incentives for Renewables & Efficiency website.

Financing ConsiderationsOwning versus Leasing

Advancements and falling prices of home solar power have

recently led many consumers to consider adding solar panels to

their homes. Whereas prices have been falling dramatically over

the past decade, residential systems are still costly. But while

many homeowners opt for leasing solar panels, installing solar

power in your home is much easier and cheaper regardless of

whether you are leasing or buying today.

Over the past one decade or so, the average cost of a solar

system has dropped by a margin of 50%. New financing models

are allowing many people from all over the globe to access solar

power systems and install them in their homes.

What does leasing a solar power system entail?

Many liken the process of leasing a solar to that of leasing a

car or getting a cable service. In most instances, you will not be

required to make a down payment. However, as the homeowner

you will be locked into payments for a period spanning as long as 20 years.

The rate for the lease contract might be fixed over the period of the contract or

may rise on an annual basis. The solar panel company is then responsible for

all maintenance and repairs done once the solar panel is in place.

Purchasing the solar outright

For those who choose to buy the solar outright, the options are quite different.

They can purchase the solar panels either through a home equity loan or a

secured loan. In this arrangement, you will be required to pay rates in the range

of 6% whereas those who use unsecured loans will pay about 10% per annum.

If you are a homeowner and you are interested in maximizing savings and other


Homeowners can save up to $2,000 a year by Owning vs LeasingBenefits of Ownership

• $0-Down Loan

• Immediate monthly savings

• Tax benefits (federal, state & local)

• No lien on Customers’ homes

• No prepayment penalties

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financial benefits such as rebates, tax credits and other sorts of

incentives such as SRECs, it is important to buy the solar panel

system outright. This option will be much cheaper than the lease

option. However, this does not mean that leasing does not offer

any benefits.

The drawbacks of leasing solar panels

Since you are leasing, the leasing company own the solar

installation and as such, the company and not you will get the

30% federal tax credit. You therefore don’t get the much desired

benefits.

The solar leasing companies also own the power that you will

be generating with the panels. Therefore, much as you will see a

reduction in your bills, you will be obligated to pay the 90% utility

payments to the leasing company.

Unlike buying, leasing makes you buy energy from the solar

service provider. In case, the panels don’t generate the much

energy that you need, you will have to make use of traditional

utilities.

Solar leasing companies set price escalators and therefore you

might end up paying lots of money in the process.

The process of transferring property ownership with the lease

agreement can be quite problematic.

Benefits of owning your solar panels

You harvest the required credits for renewable solar energy

You pay less or no money for electricity bills unless the weather is

cloudy and you cannot generate enough energy

You own the system. Therefore, you can legally sell them off when

you decide to sell your home. You can also get a higher premium.

Many consumers across the globe today consider solar power as

a justifiable source of power. In this case you can make your own

decisions without any sort of impediments.

The bottom line

When you consider the pros and cons of leasing vs financing,

leasing is not the best option for you as a homeowner or building

owner. The combination of cheaper equipment costs along with better financing options tips the scales in favor

of ownership.

Did you know?

HOAs in Maryland cannot stop

homeowners from installing solar

panels.Home Owner Associations are barred

from restricting a homeowner’s right to

install solar panels. Maryland is one of

15 states which have laws that override

any HOA contracts seeking to deny the

right to install solar PV systems. Having

solar panels on your roof announces to

your neighbors and friends that you care

about your planet and the world future

generations will live in.


About Solar GainesSolarGaines, a division of Hencken & Gaines, has been watching the

growth of solar energy since the 1980’s, and is a proud Responsible

Energy Company. SolarGaines is both a residential and commercial panel

installer, helping consumers navigate the path to determine solar panel

cost, energy savings, and solar panel installation.

For more information or a free site analysis, call 410-785-1760.

Columbia, MD Cockeysville, MD Reisterstown, MD

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Solar Power - A Maryland Guide to Saving Money With Solar Power