Darrel Mills never planned to line the roof of his 4-year-old Pequea Township garage with solar panels.

But with utility costs rising, component costs falling and new financial incentives from Washington and Harrisburg, Mills said, it now makes perfect sense.

J.K. Mechanical Inc., of Willow Street, finished up the solar-electric project for Mills and his wife, Elizabeth, Dec. 4.

On a sunny morning a week later, Darrel and Elizabeth were thrilled to watch their electric meter's wheel spin backward –– pumping surplus power into the grid.

Even on cloudy or rainy days, Darrel said, "We're still generating power."

The 44 unobtrusive, ebony-colored panels will meet about half the couple's electricity needs, he said.

A 30-percent federal tax credit and a new state rebate program that reimburses homeowners for up to 35 percent of the cost of a new solar-energy system will ultimately cut Darrel and Elizabeth's $59,000 expenditure 65 percent, to about $21,000.

The couple says they expect to recover their investment, which is twice the size and cost of the average residential installation, in five years.

It would take an average homeowner about 14 years to recoup the cost of a solar setup without incentives, said Chris Leaman, who coordinated the Mills' project.

Meanwhile, Elizabeth said, according to an automatic calculator built into the system, the panels kept 198 pounds of fossil-fuel carbon out of the atmosphere during the first week of operation.

Environment- and budget-conscious families like the Millses aren't the only ones doing the math. The commercial solar market is also undergoing a renaissance.

Unlike homeowners, who must lay out installation money up front, businesses can opt to convert the federal tax credit into a grant.

Also, the feds are allowing businesses to claim accelerated five-year depreciation allowances –– that is, they can write off the depreciation cost of solar equipment faster than it actually wears out.

All of which induced Glenn Weber to recently install 280 solar panels on the roof of the Bowmansville building that houses his snackmaking business, Kings Quality Foods, and his wife's business, All Seasons Kitchen.

The $360,000 solar-energy system will pay for itself in five to six years, he estimates, and it will replace 30 to 35 percent of the electricity he would otherwise buy from PPL.

"I didn't know how long they would keep the incentives on," Weber said, explaining his decision to go ahead with the project instead of waiting for prices to come down further.

The Dec. 31 expiration of PPL rate caps –– and impending 30 percent-plus price jump in electricity –– helped him to quickly become a solar convert, he added.

He said he's now championing sun energy to the many callers who've inquired about the project. "We're moving toward solar and I think that's good."

Flipping the switch
Of course, the vast majority of south-facing roofs out there aren't covered with arrays.

About 12.5 million people live in the state. Since the Pennsylvania Sunshine Program rebates started in May, said spokesman John Repetz, the Department of Environmental Protection has received about 1,000 applications from homeowners seeking to install solar panels or solar hot water systems.

Terry C. Kile, chairman of the county Center of Excellence for Renewable Energy, predicts that the market incentives will help ignite a solar chain reaction.

As the cost of installing solar-energy edges below $7 a kilowatt-hour, Kile said, more people will buy it, driving the price lower yet.

"I think that wave is coming," Kile said.

The state has more than 300 certified solar-energy installers, including eight in the county.

And business is booming in southeast and southcentral Pennsylvania, said to be the hottest regional solar market.

"We've hired five employees within the past three months to support our solar business," Leaman reported.

Mike Newman, a renewable energy specialist with Manheim-based Worley & Obetz, said his company's installers are booked a month or more ahead. "We've been very busy since the [state] program came out, he said.

All this is attracting outside investment.

Borrego Solar Systems Inc., a 29-year-old California company that expanded to New England in 2007, is now eying projects in the mid-Atlantic, including "a handful" in Lancaster County, said regional business development director Alex Sarly.

The company is partnering with Reading Electric on commercial and public-sector solar jobs, Sarly added.

"We're building up their pipeline of work to be executed in the next six to 12 months."

Ironically, the volatile economy has created something of a solar bubble here.

When global recession dimmed investor enthusiasm for massive renewable energy projects right after solar capacity had been ramped up, polysilicon, the raw material of the industry, plummeted in price.

Reading Electric is buying panels at half the cost of a year ago, said General Manager Jim Kurtz.

Also promising to help bring solar to the masses is the furious pace of technological advance.

This fall alone, for example, California gave the nod to a power-purchase agreement involving satellite-based solar arrays; a Cambridge, Mass. company has proposed to leverage solar panels to mimic photosynthesis; and a California startup is developing a revolutionary way to store solar-generated power in molten salt in Spain.

The result, observers say, is that solar will soon stand on its own financially.

"As technology gets cheaper, these incentives will go away," said Tom Tuffey of PennFuture, an environmental advocacy group in Harrisburg.

The current incentives are going fast.

The state fielded a flood of applications for help with solar projects this fall when it announced that the four-tier commercial component of the Sunshine Program would transition from tier two ($1.75 rebate per watt) to tier three ($1.25).

More funding remains on the residential side, where the rebates are still in the first tier, $2.25 a watt up to 10 kilowatts.

According to Newman, people are speculating about whether the cash-strapped state will renew the program when it runs out in about a year.

But solar advocates predict that the industry will surge in the short term no matter what.

The prospect of receiving valuable renewable energy credits for generating your own clean-source power is one pot sweetener.

And the specter of soaring utility rates is a "great motivator" for commercial clients, Sarly said. Similarly, he noted, any climate change legislation is likely to bump up the cost of "brown-power generation."

Mandates are already in place to make utilities buy increasing quantities of clean renewable energy.

Solar components, meanwhile are durable and dependable, said Jerry A. Long, of Long's Construction in Bowmansville, which entered the solar market last spring.

Panels last for decades and typically remain at 90 percent efficiency after 30 years, Long said. "They just sit up there and chase the protons down the wire."