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Are solar panels right for you? Google's new mapping tool can help you decide.


Solar panels are all the rage these days. But it's a complicated process to figure out whether a rooftop system makes financial sense for your particular home. What kind of roof do you have? How much sun does it get? What kind of financing is available? How much are your electricity bills right now? The answers to these questions can vary from place to place, home to home.

So it's welcome news that Google wants to make this all much, much simpler with its brand new Project Sunroof tool. Plug in your address, and Google uses its aerial imagery capabilities to help you figure out whether solar power might be a worthwhile idea. (The project is still in its early stages; here's Google's announcement from Monday.)

For now, data is only available for selected parts of the country. But let's look at a sample address given in Redwood City, California. The tool first calculates both how big the roof is and how much sun it gets per year:

How much sun hits the roof in Redwood City

Orange represents sunnier spots, purple represents shadier spots (Google Project Sunroof)

This particular roof gets quite a bit of sun. That's promising.

Next, you can fine-tune the estimate to figure out whether solar panels on your roof make financial sense, by plugging in your monthly electric bill, choosing a financing option (leasing versus loans versus buying), and so forth:

(Google Project Sunroof)

At the end, Google gives you a list of installers in your area. It all makes things much, much easier to figure out.

Note that the results differ from state to state, depending on circumstances. California, for instance, has high electricity prices, which means there are bigger potential savings from installing rooftop solar. The tool also factors in various regional policy incentives — like state tax incentives, local rebates, and what kind of net metering rules a state has that allow you to sell solar electricity back into the grid.

Granted, these results could vary over time as policies change. Right now, for instance, the federal government offers a 30 percent tax credit for rooftop systems. But that's set to shrink in 2016 unless Congress extends it, which is still up in the air.

Ultimately, you'll want to consult with a solar provider before making any big decisions. But think of Project Sunroof as a good place to get started.

If rooftop solar doesn't make sense, there's still community solar

As you'll find playing around with Google's Sunroof, not every home is well-suited to solar. Some roofs are too shaded. Plus, of course, there are renters and people who live in basement apartments and whatnot. By some estimates, the US only has about 15.8 million roofs owned by people who can take advantage of solar right now (though that number could change).

But that's not the end of the story. As my colleague David Roberts has explained, there's another option here: community solar. These are programs in which people who don't own suitable roofs can agree to "subscribe" to electricity from a solar PV project elsewhere. They then pay a monthly charge that appears on their utility bill. Community solar is still fairly niche, but it's growing in popularity quite rapidly.

Some of the big innovations in solar have nothing to do with panels

So why is Google's tool a big deal? Well, partly it's handy for prospective solar owners. But it's also part of an interesting solar-related trend.

Rooftop solar keeps getting much, much cheaper. But lately, the biggest reason for that hasn't been the declining price of photovoltaic modules themselves (although that helps). It's that all those other costs — installation, financing, and so on — have been falling rapidly:

(GTM Research)

These other costs are known as "balance of system" costs, and since 2012 they've accounted for the bulk of the price decline. Some of that is due to innovations in financing: Companies like SolarCity have developed leasing schemes that have made it easier for people to install rooftop systems with no upfront costs. Some of it is due to declining installation costs (as modules get more efficient, they take up less space, which makes them easier to install).

Another factor here, though, is what's known as search costs. After all, it takes time and effort for a company like SolarCity to find people who are actually interested in installing solar panels. They typically camp out in places like Home Depot and try to reach customers that way. But as rooftop solar grows in popularity, word of mouth spreads and search costs go down. It helps that solar power is contagious — studies have found that installing a rooftop system makes it more likely your neighbors will be interested, too.

It's quite possible that Google could help bring down those search costs further, by making it easier for people to think seriously about getting a rooftop system. This effect might be modest. But when we're talking about why solar power keeps getting cheaper, it's incremental improvements like this that are playing a big role.

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