Calculating Solar Power Costs
Once the above costs and benefits are determined, a solar system can theoretically be evaluated using the discounted cash flow method. Outflows at the beginning of the project would consist of installation costs , and inflows would arrive later in the form of offset electricity costs .
Rather than using DCF, the viability of solar power is usually evaluated by calculating the levelized cost of electricity , then comparing it to the cost of electricity charged by the local utility. The LCOE for household solar will typically be calculated as cost/kilowatt-hour – the same format commonly used on electricity bills. To approximate the LCOE, one can use the following equation:
LCOE = Net Present Value of the Lifetime Cost of Ownership / Lifetime Energy Output
The useful life of a PV solar module is generally assumed to be 25-40 years. The cost of ownership includes the maintenance costs, which must be discounted to find the NPV. The LCOE can then be compared to the cost of electricity from a utility remember, the relevant price is that which occurs during times at or near peak PV solar production.
How Long Does It Take For Solar Panels To Pay For Themselves
The average time it takes to pay off your solar panels is approximately 15 to 25 years. However, there are a lot of factors that need to be considered. The size and type of solar system you have and whether you are selling your excess electricity to the National Grid.
The average time for a 3kW solar panel system to pay for itself is between 21 to 25 years, and a 5kW solar panel system can pay for itself in approximately 15 to 20 years.
How Do I Pay For Solar Panels
If your state doesnt offer solar rebates, you may still be eligible for state-issued Solar Renewable Energy Credits . Some states allow you to earn and sell credits for the electricity your solar system produces through a net metering program. And many states offer a solar investment tax credit or other similar incentives to help offset the total cost of your solar panel system and maximize savings on utility bills.
The federal government also offers a solar tax incentive. Created in 2005, the federal solar tax credit is available in all states, including those with no SRECs or state rebates. The 26% tax credit applies to solar energy systems installed by Dec. 31, 2022. The tax credit value for residential solar will decrease to 22% in 2023 and end the following year.
Although payment options vary, most solar companies offer at least two of the following choices: purchasing the residential solar panels outright, signing a solar lease or power purchase agreement or taking out a solar loan. Keep in mind that a solar lease or PPA will disqualify you from receiving the federal solar tax credit and state incentives since they apply only to the owners of the solar panels.
Don’t Miss: How To Apply For Solar Panel
To Know Your Savings You Will Need
Solar power systems are different from one location to the next. To figure out exactly how much electricity you can save, installation companies need to know the following: – Where do you live? – Each state has different solar policies thus changing the savings from one location to the next. – Is there shade on your roof? – Obviously to go solar, you will need the help of the sun, and the more, the better. – What type of roof do you have? – Some are easier than others to install on. – What direction is your roof facing? A key factor for the system to maximize its potential. – What is your current electric bill? The more you pay, the more you will .
Here is a great video detailing the cost of solar PV system breakdown:
What Is The Right Price For A Solar Panel Installation
The SolarReviews Editorial team believes a fair price for a professionally-installed solar system in 2021 is between $2.60 per watt and $3.20 per watt.
If you are being charged more than that, there are probably better offers available. However, if you are paying less than $2.60 per watt, you may run the risk of getting a low-quality installation or sub-par customer service. Not only that, solar companies that charge such low prices probably wont be able to earn enough money off of their sales to offer you the customer support you need for the 25-year lifespan of your solar panels.
Above all, you want to go with a solar company that has a good reputation and will be around for the long haul.
Recommended Reading: Where Can I Buy Solar Batteries
Check Out Your Options
As you may imagine, there are plenty of , all having different standards of the efficiency of the panels they produce, with different costs as well.
A 4 kW solar panel system will cost you between $10,000 and $11,500 to install. If you want to up the juice a little bit, a 5 kW system will cost between $12,500 and $14,000 to install. Don’t forget, it’s not just the panels you are buying there’s the wiring into your home electricity system as well, plus the cost of the installation itself.
You can find out more about the cost of a solar panel systemhere. You can also choose to finance the residential energy system, and via solar leasing or Power Purchase Agreement , which is another great way to start save without having to pay for the system in full upfront.
Typically, as soon as you have your system up and running, you will receive tax breaks in line with about 30 percent of the cost of your installation. Most solar panel systems pay for themselves within 8 to 10 years of installation via lower utility bills and tax breaks.
Don’t forget, it’s not just the financial cost you have to take into consideration there’s the continual cost in terms of damage to the environment if you continue to rely heavily on fossil fuels.
Negative Tesla Solar Reviews
Negative Tesla Solar reviews typically mention Teslas spotty customer service and failure to follow up if something goes wrong after installation . Here are a few examples:
If I could give less than 1 star I would. Tesla solar has the worst customer service of any company I have ever dealt with. If you are reading these reviews because you are considering using Tesla: run, dont walk, in the other direction. What is amazing is that they are still in business. Diane via Yelp
Once you pay them, they leave you stranded. Panels do not work because National Grid needs paperwork from Tesla and Tesla keeps saying it is complete. It has been months with useless panels, no customer service support, not even a phone number. This is an extremely difficult process spending so much money and not having the ability to utilize the product. Michael via Consumer Affairs
Recommended Reading: Is Solar Worth It In Maryland
Cost Of Solar Panels For A 4
The cost range for installing solar panels for a 4-bedroom home averages $15,000 to $50,000. 4-bedroom homes in the U.S. have a wider range of sizes. The average falls between 2,000 and 2,400 sq.ft. Assuming occupancy of 2 to 5 people, this puts your total energy costs between homes of 2,000 and 2,500 sq.ft. Your costs can be higher or lower, depending on your total energy usage. The more occupants and the more energy you use, the higher your total costs.
Scenario : You Love The Solar Roof Aesthetics Want Solar And Have Money To Spend
There are certainly homeowners out there who simply love the aesthetics of the Tesla Solar Roof and want it installed, regardless of the price tag. For shoppers in this category who are considering solar or even a new roof, the Tesla Solar Roof could be a good fit! In fact, we believe that the majority of buyers for Teslas Solar Roof come from this fourth category. At EnergySage, we think that more solar on rooftops is always better than less, and are glad that this group has an option that best fits their needs.
Recommended Reading: How Efficient Is Solar Power
Cost Of Diy Solar Panels
The cost of DIY solar panels runs $2,000 to $20,000 for a kit ranging from 2kW to 10kW. These kits include everything you need to install your own solar array. However, you may even look to building your own panels.
The costs to make your own system and build it from scratch is going to vary quite a lot depending on you level of skill. Its a highly technical and specialized field. If you have a high level of electrical skills, you may be toying with the idea of building your own solar panels. The cost of solar cells and the silicon wafers used to create them are available to purchase individually. To build your own, you would typically put 60 of these wafers onto a backing and wire each of them. You would then need to connect this to an inverter.
Consider, however, that there are several risks associated with building your own, including:
- You can’t be sure of the quality of solar cells purchased.
- Homemade panels are often a fire hazard.
- Many tax credits and incentives will not apply when systems are constructed outside of approved facilities.
Who Are The Best Solar Panel Installation Companies Near Me
As the largest consumer reviews site for the residential solar industry, we have reviews of most solar panel installation companies.
We also have rankings for solar energy companies so that you can refine your search for the best local solar company to only those companies that service your local area.
Compare the prices of the best-rated solar providers near you online
Recommended Reading: What Type Of Business Is Sole Proprietorship
Don’t Miss: How To Install Solar On Rv
Positive Tesla Solar Reviews
Many Tesla Solar customers have raved about their great experiences with their solar installers on customer review sites. A few reviews we saw even mentioned that they switched to Tesla Solar after having consultations with other solar companies and were so grateful they chose Tesla instead.
I couldnt not be happier with the system and install treated my home as if it were theirs. It was a two-day install because the size of the system. They ran 1 conduit with the trim of my house from basement to attic. You cant even tell there! They built a wall in my basement for the inverters, gateway, Powerwalls, and two electric panels. Everything was aligned and no wires showing at all! Sarin via Consumer Affairs
We installed Tesla panels two years ago: a 12-panel 3.8 kW system. The installation went seamlessly and the panels save us around 30% of our bills. We havent had any problems since installing the panels. Highly recommended Vladimir via Yelp
Commercial Solar Panel Cost Per Square Foot
The size and the type of your commercial solar system will determine the cost of solar panel cost per square foot. The larger the solar system, in kW or MW, the higher the cost.
For example, a commercial solar system between 10 kW and 2 MW will cost around $1.83 per watt. Larger systems beyond 2 MW costs a bit lower around $1.06 per watt.
If you want to install a solar system for your small or mid-sized business, it will cost you around $43,000 to $175,000 for systems between 25kW and 100 kW.
With commercial solar systems, you will likely recover up to 45% of your solar panel costs in one year from rebates and tax credits.
Don’t Miss: How To Build A Solar Cell At Home
Solar Inverter Cost By Type
Solar panels are only one component of your new system. In addition to the panels, you also need inverters to convert the energy from the panels into usable energy. Several types of inverters are on the market, and you need roughly one per panel, so in most cases, you need around 20 inverters if your system uses 20 panels.
The most common inverter types include string inverters, power optimizers, and micro inverters. String inverters interconnect in a string. You need one inverter per panel. The downside of this system is that the entire system goes out if one string goes out.
Power optimizers are a newer type. They do not connect, and they help regulate the amount of power your system creates and uses to help maximize your efficiency.
Micro inverters are another newer type that does not interconnect like the string inverters. They are slightly more costly than the other types but are easier to install, so your labor costs are lower.
If you have batteries in your system, you need specific battery inverters. These help convert the energy into a type that can be stored by the batteries for later use.
The inverters make up roughly $0.25 to $0.40 per watt of your total wattage cost to install solar panels, depending on the type. Total costs vary depending on the type and how many you need. Below are the average costs you can expect for the various inverter types.
|$2,000 – $3,000|
Is The Tesla Solar Roof Worth It
The Tesla solar roof isnt that much more expensive than a conventional roof replacement and solar panel installation. Depending on the scenario, the solar roof could actually end up being cheaper! If the slight cost difference doesnt matter to you and you need to replace your roof, then maybe its worthwhile to get the solar roof.
But were not so sure the Tesla solar roof is the right way to go solar, even if the price is competitive. For one thing, Tesla is notorious for having subpar customer service for their energy division, which is reflected on SolarReviews. People have reported waiting weeks to hear back from their Tesla advisors if there is an issue with their system.
Tesla is also extremely unreliable. Despite being introduced in 2016, Tesla didnt start installing solar roofs until 2018, and its still unknown how many have actually been installed. Then in mid-2020, Tesla started canceling solar roof preorders after homeowners had paid their deposits – claiming the sites werent within their service territory. Were also not huge fans of how vague they are about literally everything around the solar roof – whats the actual pricing? What are the complexity requirements? Why doesnt Tesla supply official operating specifications for the active shingles?
Reputable local solar installers will be able to provide you with a more personalized installation experience, and will be there to support you for the 25-year lifespan of your system.
Don’t Miss: Can Solar Panels Power Your Whole House
How Much Do Solar Panels Cost For A 1000 Square Foot House
One of the first questions anyone has when theyre considering installing solar panels is how much theyll cost. But solar is not a one-size-fits-all option, and that can make finding an answer to that question difficult.
Its easy to assume that houses of similar sizes would need similarly sized solar systems. However, residential solar systems arent based on the sizes of homes. Theyre based on how much electricity these homes use .
So giving an accurate estimate for the cost of a solar system based solely on the size of the home would be very difficult, as there are several factors that impact the cost of a solar system.
Well share what those factors are, but we wont leave you high and dry as to how much solar will cost for your home. For general estimates on solar pricing, scroll down to the bottom of this blog.
What Exactly Are The Gaf Solar Shingles
Leading roofing manufacturer GAFs nailable solar shingles are designed with roofers top-of-mind in order to make installation a breeze. Image source: News Atlas
GAFs solar shingle design combines the conventional asphalt roof shingle material theyre known for with the monocrystalline solar cells of a solar panel.
The top portion of the shingle is made of asphalt, which means it can be nailed right to the roof like regular shingles – no racking or extra mounting equipment necessary. This makes it incredibly easy for roofing contractors to install them.
The bottom portion of the solar shingle is what will generate the electricity. When installed, that portion will overlap the asphalt material of the solar shingle before it. The shingles lay flush against your roof, staying right in line with the regular asphalt shingles covering the remainder of the surface of the roof.
All of the wiring is located on the side of the shingle, where they can be easily connected together to create a functioning solar electric system.
You May Like: How Much To Rent Solar Panels
What Is The Average Payback Period For Residential Solar Panels In 2021
The solar payback period refers to the amount of time it takes for the electric bill savings from your solar panels to equal the amount you paid for the system. The average payback period for a residential solar system in 2021 is about seven years.
A payback period of seven years equates to a return on investment of approximately 14%. However, this varies greatly by state and even by regions within states.
Calculate the solar panel payback period for your home based on your location, electric use and current local solar system prices
Once you have generated an accurate payback period, you can compare this to the returns you see on other types of investments:
- Long-term government bonds currently have returns between 0.1% and 2%
- Zillow estimates that home prices increase between 3% and 5% annually
- The stock market has risen around 9.5% historically
As you can see, residential solar panels stack up favorably against all of these other investment options and this is even before we consider the increase in a homes value caused by the solar panel installation.
Dont Miss: How Much Money Can You Make Off Solar Panels