Solar Power For The Home: Costs
Solar power is capital intensive, and the main cost of owning a system comes upfront when buying the equipment. The solar module will almost certainly represent the largest single component of the overall expense.
Other equipment necessary for installation includes an inverter , metering equipment , and various housing components along with cables and wiring gear.
Some homeowners also consider battery storage. Historically, batteries have been prohibitively expensive and unnecessary if the utility pays for excess electricity that is fed into the grid . The installation labor cost must also be factored in.
In addition to installation costs, there are some further costs associated with operating and maintaining a PV solar array. Aside from cleaning the panels regularly, inverters and batteries generally need replacement after several years of use.
While the above costs are relatively straightforwardoften a solar installation company can quote a price for these for a homeownerdetermining subsidies available from the government and/or your local utility can prove more of a challenge. Government incentives change often, but historically, the U.S. government has allowed a tax credit of up to 30% of the system’s cost.
Solar Panel Cost Breakdown
Are solar panels expensive compared to other high-tech systems? The first photovoltaic solar panels were created in 1839 by French physicist Edmond Becquerel. His solar cells were so ahead of their time that it took years before solar energy systems efficiency and cost were good enough for the market. So solar rooftop solar systems remain a relatively new technology developed within the past century. Because of how recently solar energy was pioneered, the average cost of residential solar panels and solar panel installation is understandably high.
Sure, generating your own energy is a great homeowners concept, but making your dreams come true could take some planning and a little money. The initial up-front costs for solar are comparable to buying a new car.
Here is a Solar Panel Cost Breakdown by factor percentage:
Soft Costs = 49%
Structural Mounting = 11%
Inverter = 7%
Of course, each of these factors will vary dramatically based on the building, solar installer, and homeowner. There are both local and international causes for high prices. At times, these factors are pulling the average solar panel price in opposite directions.
On the one hand, international trade competition makes the hardware solar panels and inverters cheaper. Cheaper solar products have made more home installation projects financially viable.
But if you want to make your solar energy more affordable, then you need to cut costs for each factor. Solar rebates can only go so far.
Type Of Solar Panels And Other Equipment Costs
There are three basic types of solar panels, two of which are commonly used residentially: monocrystalline and polycrystalline panels. Monocrystalline panels tend to be more energy-efficient, which can lead to greater savings in the long run, but theyre also a bit pricier on the front end.
That being said, solar panel efficiency is the name of the game for most homeowners who aim to install a system on their roof, as theyll likely have less space to work with than commercial solar projects or ground-mounted solar panel systems will.
Other components you may need to purchase include inverters, wiring, charge controllers, mounts, solar batteries and more. Consider how much backup power is a priority for your home backup batteries will add some costs on the front end, but additional safety and savings on the back.
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Does The Installation Company Affect The Purchase Price
Solar power companies often provide incentives to lure curious clients.
These deals may have a positive effect on the final cost of residential solar energy systems.
Check with different installation companies to ensure you have the best price available.
Keep in mind that lower prices don’t always mean a better deal.
Take care to read reviews and find an idea of the corporation’s work quality before committing to work together.
How Much Will I Save With Solar Energy
The savings from solar panels come in the form of dramatically lower electric bills. The average savings from a typical 6kW solar panel installation in the United States is about $1,500 annually.
Another way to look at savings is by calculating your solar payback period. The payback period is the length of time it takes you to recoup your initial investment costs. After that time, every watt of energy you make is profit. In most states, the payback period for solar panels is currently 4-9 years.
However, its crucial to note that there are huge differences in annual savings from state to state, and even from house to house. How much a household can actually save depends on many factors:
- The size, direction and pitch of the roof
- The number of panels and their rated energy production
- Hours of sunlight received on the property each day
- Whether or not battery storage is installed
- The cost of electricity in that particular area
Use the solar panel calculator below to understand how soon your new residential solar system will start paying you back.
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Why Are Flexible Solar Panels Expensive
The reason why flexible solar panels are more expensive than regular rigid ones is the advantage for them to fit many types of solar projects.
Lets say for example that due to structural concerns, your roof can not bear the traditional solar panels. The much lighter and flexible panels made out of thin film can be an awesome solution that will not compromise the roofs structural integrity. Flexible panels are meant to be shaped in order to fit nearly any surface they are installed on, and for that reason, they can easily be installed almost anywhere.
Its likely that flexible solar panels will reduce the cost of installing them on your roof. They require less labor during installation because of their flexible and thin-film panels, in addition to that they are much more portable and easier to handle than regular rigid panels which are bulky and they require a heavy roof mounting system.
However, the cost of flexible solar panels will be higher than the standard solar panels.
Factors To Consider When Installing A Solar Energy System
Planning
Just like you plan ahead of any project, planning of solar panel installation is very key before the actual project starts.
Do research about the product
Learn about solar energy, what it all entails, where to find it, accessibility, affordability, and the market price.
Window Shopping
You can start by visiting several website pages that are popular for solar installations within your locality like solar panels and kits for sale, local shops around you, and doing research about solar energy.
Consider the number of solar panels needed for installation because the larger the household the higher the cost of the project will be.
Choose a suitable place
You first have to choose the most suitable place where you would like to install the solar panels.
You can make a great saving by installing the solar panel on the roof of your house.
Understand solar components
The other important step is understanding the components of a solar power system.
Get multiple quotes
Homeowners who get multiple quotes save 10% or more.
Compare as many solar options as possible to avoid paying inflated prices offered by the large solar installers in the solar industry.
Consider hardware choices
When doing a new installation, the hardware part is the most expensive.
Consider the right tools to use and their budgetary implications they will have on your project.
New panels, collectors, and batteries can amount up to 25% of the total cost of a new system.
Carefully choose the right solar panel
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How To Calculate The Payback Period
the payback period of a solar system is simply a way to work out how long it takes to get back your initial investment in the system through the savings you make on your electricity bills.
Heres how we calculate it.
COST OF SOLAR SYSTEM INCENTIVES AND TAX CREDITS = INITIAL COST
REGULAR ELECTRICITY COSTS POST SOLAR ELECTRICITY COSTS = ANNUAL ENERGY SAVINGS
INITIAL COST ÷ ANNUAL ENERGY SAVINGS = PAYBACK PERIOD
the great news here is that the average solar system payback period in the US is around eight years. This means that after eight years, you will have paid off your initial investment, and for the rest of the working life of your solar system , You will enjoy huge savings on your energy costs for free!
Are you really still asking why are solar panels so expensive?
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Start Small To Trim The Cost Of Solar
You dont have to offset 100% of your energy costs if your budget doesnt allow for it. Its always possible to start with a modest system and then expand later.
You can start as small as one solar panel and a single micro-inverter. Solar panels and micro-inverters are a 1-to-1 system, meaning each panel is connected to its own micro-inverter.
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Is It Worth Getting Solar Panels
With SEG earnings, you can break even with solar panels much faster, making solar panels financially worth it in addition to the obvious environmental benefits. In addition, with continuous improvements to technology, solar panels are becoming increasingly affordable.
Keeping in mind the cost, savings, and earnings mentioned earlier, you can break even on your solar panel investment within the systems lifespan.
For example, with a 3kW system, you can break even after 21-25 years. With a 4kW system, you can break even already after 16-22 years. Finally, with the larger 6kW system, you can break even after 19-23 years.
So if youve ever asked yourself if solar panels are worth it, the answer is: yes, they are.
Do Solar Panels Reduce Your Electricity Bills?
Solar panels help to reduce your electricity bill. The amount you can save on your bills depends on where you live. In London, for example, you can save an average of £100-£270 on yearly electricity bills. In other areas like Stirling or Manchester, you can reduce your bills by £90-£230 per year.
Racking For Solar Panels
One extra thing that you might have noticed around solar panels but might have never thought that it is sold separately at a high price point is racking. You must know that solar panels are installed around the house on roofs, walls, etc so that they can be exposed to maximum sunlight. However, installing naked solar panels on roofs and walls would be bizarre as they would fly off with the first blow of wind after their installation and chip off or break into pieces.
To avoid this situation from happening, solar panels sit on racks at roofs and walls, these racks hold the solar panels in one place in every weather condition. And you might be aware of the fact that while these shiny glistening iron racks look gorgeous in sunlight, they do not cost less. So individual racking for each solar panel also adds a fraction of extra cost to the costs of a solar system.
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If You Already Have Solar Panels And Get The Feed
If you already have solar panels and get the feed-in tariff, the closure of the scheme won’t affect you. Depending on when your panels were installed and certified you’re guaranteed to get the payments for at least 20 years:
Is Tesla The Best Choice
As with any major purchase, you should get multiple quotes from multiple companies. Make sure they answer all your questions and provide the information you need. While Tesla doesn’t have a press office, its customer service representatives were easy to get in touch with and seemed knowledgeable. Still, it shouldn’t be your only call.
Tesla’s price match means it will always be competitive in terms of cost. Likewise, the estimates it provides online come in well below the national average. If the look of your panels is really important, Tesla’s do sit closer to the roof and look sharp. Tesla also offers more information up front about its warranty than some of the other players. Still, make sure you can view it in detail before committing.
The Powerwall is widely considered an industry leader in batteries. It sets the Tesla’s equipment apart, but it’s also available from some other installers.
It’s also important to note that I researched this as deeply as was practical and tried to provide the clearest answers, but I didn’t go through the purchasing process, interact with customer service as a buyer or base my assessment of Tesla’s performance on any first-hand experience. This category is a hard one to review in the traditional sense, so if possible, you’ll want to make sure to get multiple estimates from the different providers in your area before you make a purchase decision.
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Review Your Electric Bill
Solar panels generate their own power and can therefore greatly offset your monthly electricity bill, if not eliminate it. The higher your bill, the more likely you’ll benefit from switching. But you should note that electricity rates and usage the main charges on your statement are volatile.
“If a utilitys electricity prices fluctuate, so could the amount of savings,” says Garrett Nilsen, deputy director for the U.S. Department of Energy’s solar energy technologies office. “Similarly, if energy consumption changes, the amount of savings can also vary.”
Visit the EIA website to view the most recent prices per state.
What Factors Affect Solar System Cost
A single solar panel costs between $2.67 and $3.43 to buy and install.4 The price of the whole system is based on its capacity, measured in watts. How big a system you need will be based on how much energy you use, your roofs sunlight exposure and panel efficiency.
The amount you save will rely on several factors, including:18
- Regions sunlight exposure
Source:
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The Bottom Line: Are Solar Panels Worth It
Solar panels can be a beneficial investment for your home by saving you money long-term on the cost of electricity and increasing the value of your property. However, there are factors that you should consider before making the switch, including how much sunlight directly hits your house daily and the layout and direction of your roof. Residential solar systems in states that are, on average, sunnier will typically perform better, and south-, west- or southwest-facing roofs get more sun exposure.
You should also take a close look at your monthly electricity bill and compare it against your states average energy cost. Solar panels may be a good solution if you have consistently high payments or your cost is more expensive than in other areas of your state. On the other hand, you may not see enough cost savings to justify the expense of installing a home solar system if you have relatively low bills or can find ways to cut down electricity usage significantly.
Its also crucial to determine what incentives, if any, your state offers for solar energy, including a net metering program and tax credits. Remember that you can only take advantage of these incentives if you own your panels, either by paying for them outright or through a loan, so you need to consider whether your budget allows for a purchase rather than a lease.
Get Connected With Solar Installers Near You
Install The Solar Panels
Once the frame has been attached, the installation of the solar panels can begin. The panels are clamped to the aluminium frame but not too tightly at first, in order to have some space to adjust them slightly later. Once all panels are set up in their position, they are firmly secured to the frame.
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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.
If You’re Likely To Move Home In The Next Decade It Probably Doesn’t Add Up
As it takes typically more than 10 years to recoup your installation costs, if you’re considering moving it’s probably not worth it .
While you could physically remove the panels from your old home and install them on the new one, this could prove costly. Plus, while you could still use what you generate yourself at your new address, you’d no longer get paid for what you export. To receive payments your panels need to be certified by the Microgeneration Certification Scheme and the organisation told us it wouldn’t certify panels that have been moved.
It’s also worth noting solar panel installations are tailored to each home to fit the roof and be positioned to maximise the level of sunlight they receive so it’s likely they wouldn’t perform as well if you installed them on a different home anyway.
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