Impacts of the national energy programme on solar economics

The National Energy Plan (NEP) sets as a goal the use of solar energy in two and a half million homes in 1985. A key provision of the NEP (as well as congressional alternatives) provides for the subsidization of solar equipment. The extent to which these subsidies (income tax credits) might offset the impact of continued energy-price control is examined. Regional prices and availability of conventional energy sources (oil, gas, and electricity) were compiled to obtain a current and consistent set of energy prices by state and energy type. These prices are converted into equivalent terms ($/10/sup 6/ Btu) that account for combustion and heat-generation efficiencies. Projections of conventional-fuel price increases (or decreases) are made under both the NEP scenario and a projected scenario where all wellhead price controls are removed on natural gas and crude oil production. The economic feasibility (life-cycle cost basis) of solar energy for residential space heating and domestic hot water is examined on a state-by-state basis. Solar-system costs are developed for each state by fraction of Btu heating load provided. The total number of homes, projected energy savings, and sensitivity to heating loads, alternative energy costs, and prices are included in the analysis.