There is a lot of pressure these days to be environmentally friendly and to save money. With rising energy prices and a recent economic stimulus plan from the federal government, solar panels are becoming more and more popular. For instance, the installation of solar panels in Long Island has almost quadrupled from last year to this year, and other areas of the country are experiencing the same kind of growth.

Those who use of solar energy have received tax credits before, but the federal government stimulus plan, effective at the beginning of this year, lifted the maximums on solar energy tax credits. The current solar tax credit is a 30 percent tax credit on the installed price of solar panels and solar water heaters. In 2008, there was a $2,000 maximum, but the tax credit cap has been removed and has vastly increased potential savings.

But the financial incentives to using solar energy don't stop there. People with home businesses that utilize solar energy can qualify for accelerated depreciation and a 50 percent bonus depreciation for the portion of the home that is devoted to the home office.

And several states offer additional tax benefits if you use solar energy, including cash back rewards programs; property tax exemptions with which states with exempt solar energy systems from property taxes, a nice benefit if you live in a high property tax area; electric company incentives which could include tier rates and time of use metering; and the option to sell excess energy, which allows you to sell any excess energy from your solar system to the electric company.

In states where conservation of energy is especially important, more tax benefits are being offered. To return to an earlier example, the reason the installation of solar panels in Long Island and other areas of New York is increasing is largely because, aside from the federal government's tax credit, the state also offers corporate and personal tax credits, property tax exemptions, sales tax exemptions, as well as an assortment of grants, loans, and rebate programs. All of these incentives are successfully encouraging residents to use solar energy in their homes.

But what exactly is solar energy and what is so beneficial about the use of solar energy that would cause governments to supply so many financial benefits?

For those who don't know, solar panels are devices, usually placed on the roof of a house, that convert the light of the sun into energy that can be used in your home. The two most common uses of solar panels in the home are heating water (which devices are also known as thermal solar systems) and producing electricity (devices known as photovoltaic systems).

The benefits of solar panels are many, especially in today's economic climate. Solar panels can first of all save you money. It's impossible for me calculate the average cost of solar panels because it varies from state to state and depends on an assortment of financial incentives. But many people buying solar panels now are saving up to 75 percent of the original cost.

But solar panels can help save money through more than just government financial incentives. Although there is large upfront cost, after you install the solar panels, you may never have to pay an electric and/or heating bill again. And in this economic decline, the use of solar panels can prove to be a worthwhile investment as you no longer are a slave to the ever-changing supply and demand of regular fuel. In years past, when the cost of traditional types of energy was lower, solar panels may not have been a good investment, but now with the rise of energy prices, solar panels can save quite a bit of money in the long term.

Of course, if you are considering purchasing solar panels, it is important to think about how long you plan to live in your house. If you plan on moving in just a few years, solar panels may not be a good investment because they may need more time to pay for themselves. But if you plan on staying in your home for about ten years or longer, solar panels could save you a good chunk of money.

Solar panels are also healthier for you and the environment. Solar energy is free and is a renewable energy that produces zero air emissions, which is healthier for you and your family and extremely beneficial for the environment as you won't be using as many non-renewable resources. As opposed to traditional electricity generation, solar energy will not pollute the indoor or outdoor environment. There are few completely renewable sources of energy that are as clean and that can be used in the home like solar energy can.

Using solar energy can also contribute to a peace of mind, as not only are you saving money and helping the environment, but solar panels also make the country less dependent on foreign oil. In times of sky-rocketing energy prices, or even energy crises and panics, you can rest assured that your solar energy will still be available. After all, no one has ownership over the light of the sun.

Another small benefit of solar energy is a lack of wiring. Once you install your solar panels, you're good to go without having to deal with unsightly and potentially dangerous wiring. Solar panels are also easy to install and can be done with basic household tools. Further, if you utilize solar energy in your home, you no longer have to worry about power outages.

Because of the many financial incentives and benefits of solar panels, it's no wonder that the use of solar energy is on the rise all over the country.