I was talking to a friend in the solar power industry a little while back, and she said something interesting:

"We sometimes get people asking us to put panels up where they clearly won't work. Even when we tell them that the conditions are too shady or whatever, they ask us to continue with the project. They just want the solar as a status symbol. It drives me crazy."

With solar power costs coming down dramatically, it's probably not a surprise that environmentally conscious homeowners can sometimes let their enthusiasm get ahead of reality when it comes to installing renewables. But installing solar panels where they don't make sense is really not doing the movement any favors.

So what factors do you need to consider to know if solar really makes sense for you?

Access to sunlight

Solar advocates will often state that photovoltaics (solar electric cells) continue to produce electricity, even when it's overcast. And that's true. But the amount of power they generate will be significantly reduced. (Estimates range from 50-90 percent reduction in electricity on cloudy days.) It should also be noted that a photovoltaic array's output will be significantly reduced, even if only a small section of the panel is shaded, perhaps by an overhanging tree.

So making sure you can site panels where they get at least four full hours of sun should be a major priority. That said, the panels don't have to face South. In fact, a recent study suggests that West-facing solar arrays may hold significant advantages not because they produce more power than South-facing counterparts, but because they generate power at peak hours during the afternoon/early evening when it is most needed.

It's also worth noting that some technology watchers are pinning their hopes on thin-film solar modules like these self-healing solar panels because they have the potential for producing more energy in low-light conditions, but my own contacts within the industry are skeptical that this will ever pan out commercially.

The price of electricity & the availability of subsidies

Alongside the cost of panels and the amount of energy you can produce, another major factor on whether or not solar makes sense for you will be just how much you are paying for retail energy prices. If you live in an area where electricity costs are high, it makes sense that offsetting some of your usage with solar generation will be significantly more attractive than if your utility-supplied electricity is cheap.

Similarly, availability of federal, state and utility incentives — and the price you get for selling electricity back to the grid — will all have an impact on the economic viability of installing solar.

What else could you do with the money?

There's no doubt that solar is sexy, and supporting new clean energy technologies is a valuable service to us all. But it probably makes little sense to spend thousands on solar until you've tackled cheaper, low-hanging fruit first. Efficiency is, as they say, the first fuel. So make sure you've switched out your light bulbs for LEDs, insulated your attic, installed a programmable thermostat and generally honed your household's conservation efforts before you shell out big bucks on installing solar.

It's also worth remembering that you don't have to put solar on your own roof to get behind renewables. If your house is too shaded, or the sun never shines, consider purchasing green power, donating to green charities, and buying from companies that use clean energy.

Think long-term

Solar panels are an extremely viable, important low-carbon technology, and they are getting cheaper and more effective all the time. In many situations, they are increasingly competitive with conventional sources of electricity. So if you've done your homework, and think you have a good location for solar, don't let the concerns outlined above get in the way of taking the plunge. Even if the initial financial outlay seems big (and it will!), remember that you are fixing in energy costs for decades to come — avoiding price uncertainty, reducing greenhouse gas emissions, and lending your support to the emergence of a true, low-carbon economy.

Just don't get so carried away that you want to put solar on a shaded, North-facing roof where it will never make sense.

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