How Can I Budget For My Electric Bill
The 50/30/20 rule is a standard budgeting approach that guides users to spend 50% of their monthly after-tax income on needs, 30% on wants and 20% on savings and debt payments. An electric bill is considered a “need,” so users of the method would allocate 50% of income to essential utilities, including electricity, and other necessities like food, housing and transportation.
Here’s a hypothetical example of how the breakdown could look for someone with a $2,500 monthly income:
$1,250 for utilities , internet, rent, groceries and other needs.
$750 for new clothes and dinner with friends.
$500 toward savings and paying off your credit card.
Additional Solar Panel System Costs
There are a few things youll want to add to your solar energy systems total cost to get the most accurate price estimate. Here are a few additional factors that will impact how much your solar panels will cost:
- Labor costs Local labor costs for solar installation will change depending on your area and the average costs solar installers charge in your area.
- Installing solar mounts The costs to install the racks that hold your residential solar panels will effect cost as well. There are a few options for solar mounting.
- Installing solar inverters A solar inverter will need to be installed to transform direct current power from the panels into the alternating current you can use in your home
- Other costs: There may also be costs for any local permit fees, inspection fees, and taxes on the solar panels.
With the fall in solar panel prices, these soft solar panel costs now constitute the bulk of what you pay when you install solar for your home.
Fortunately, as more people adopt solar power, soft costs have fallen as a resulta trend thats very likely to continue in the future. An analysis by the federal governments National Renewable Energy Laboratory discovered that installed prices have fallen at an average annual rate of 13% to 18%.
Always make sure to speak with a local solar professional to get a more accurate estimate of what your installation will cost.
Solar Panels Are Generally Low Maintenance
The Energy Saving Trust says little maintenance is required on a properly installed, well-designed solar PV system, though you’ll likely need to replace the inverter a gadget which is a key part of the mechanism within about 25 years .
Of course, though, things can go wrong. If so, check the installer warranty you get it can cover you for up to 20 yeas. If the panels are damaged by something unexpected, like a storm, you may also be covered by buildings insurance check with your insurer before you have them installed.
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Estimated Solar Energy System Costs Per Watt
|10kW||$31,500 – $35,500|
Although the per-watt price of installing solar ranges from $2.50 to $3.50, it varies regionally You’ll see the greatest difference between the Southern and New England regions. This does not necessarily mean that it is less cost-effective in New England as opposed to other regions. Different states, even different counties, will have varying returns on investment dependent on other factors.
These factors include:
- Average electricity bills.
- Amount of sunshine expected per day.
Below you will find the average rates of having your system professionally installed, according to region and wattage. These figures do not include any tax credits or incentives. Consider that the average size is 5kW. Hawaii, included in the Western region, has a high rate per watt at $2.85 on average. Georgia, in the Southern region, has a lower rate at $2.53 on average.
Do I Need To Insure My Solar Panels
Solar panels are an expensive purchase and a major change to your home. Out on the roof, theyre also exposed to weather damage, falling trees and even vandalism. So its prudent to have insurance in place.
Contact your buildings insurance company to check whether your solar panels are covered under your existing policy. If not, most companies will provide cover for no extra charge.
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Solar Panel Costs By State
Solar panel costs in the U.S. typically include equipment and installation services. Visit the Solar Energy Industries Association website to learn about local incentives and tax credits in your area. Its usually in your best interest to take advantage of state clean energy programs when you can it lowers your upfront costs and shortens your payback period.
Competition And Cheap Solar
The solar industry is one of Australias most competitive markets with over 6,000 contractors accredited with the Clean Energy Council to install solar. As a result the margins have been forced to be very slim in the market. Unfortunately this has driven some installers to sacrifice quality of product and service to offer crazy prices and support them with large marketing budgets to drive high volumes. These tactics have provided downward pressure on pricing, but in most cases have not improved the outcome for consumers.
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Avoid Cheap Solar Panels
We cannot stress enough the importance of avoiding buying dirt-cheap solar panels. You risk not receiving your government solar rebate if the Clean Energy Council does not approve your panels and inverter and, if the installer is not accredited by the CEC. If you buy cheap panels, the risk that your system breaks down or underperforms is far greater. You may not have any recourse when it comes fixing a cheap system too, as the solar panel warranties may not cover the issue, or worse still, the company you bought them from may no longer be in business.
What Is The Average Cost To Install Solar Panels
Installing solar panels for your home allows you to get free energy from sunlight. However, that doesnt mean the solar panels and the installation is free. You will still need to pay a significant amount upfront to get the solar panels installed. Costs of solar panels and their installation can vary based on your location, the size of the solar panels and also efficiency.
In this guide, we will briefly talk about the process of installing solar panels and then well look at the average cost of installing solar panels.
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Cost Of Solar Panels For A Small Household
If youre in a one-bedroom or two-bedroom property, a 1-2kWp solar panel system will produce more than enough electricity . This system consists of 4-8 panels, and needs around 10 square metres of roof space.
Want to find out what solar panels we recommend installing? Check out our guide to the best solar panels.
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.
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The Smart Export Guarantee
The Smart Export Guarantee launched on 1st January 2020, which requires all large energy providers to pay households for the renewable electricity they export back to the grid.
The tariffs being offered by most suppliers are very reasonable and similar to the export tariff rates previously being offered by the government. To find out more, check out our detailed guide to the Smart Export Guarantee .
How Much Will Solar Panels Cost To Install On Your Specific Home In 2021
The cost to install solar panels on your specific home in September 2021 will vary depending on your location, your energy usage, the brands of equipment chosen, and whether it is a DIY installation or a job done by a professional solar company.
Since more than 95% of homeowners choose to go with a reputable local solar company, our solar calculator below shows estimates for professionally-installed systems in your area.
*Based on 350-watt panels
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Evaluate Your Sunlight Exposure
More sun means more energy produced and a greater potential to save with solar. Certain states, like Arizona and California, average more sunlight hours per day.
Your home’s orientation toward the sun, the amount of shade and its roof type also affect a solar system’s output. You can estimate the efficiency of panels in your area by using the SolarReviews calculator. Enter your address and the average cost of your monthly energy bill.
What Happens To The Solar Panels If I Move Out
If you get solar panels installed and later decide to move home, you can’t take the panels, smart export guarantee or feed-in tariff payments with you.
Solar payments are paid to the owner of the property where the solar panels are installed, so normally when you move, the new owner will receive the payments.
While you could physically remove the panels from your old home and install them on the new one, you still wouldn’t receive payments, as the panels would be considered ‘second-hand’ and so not eligible for the scheme.
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.
Are Solar Panels Worth The Investment
Thanks to the lower-than-ever cost of solar panels and various solar incentives, solar panels are a cost-effective investment for the majority of homeowners that will provide an excellent return on investment.
Not only do they lower your energy bills, but you also get to power your home with clean renewable energy and reduce your dependence on your local utility company.
Even though spending up to $20,000 is daunting, federal incentives eliminate 26% of solar system costs after 1 year. There are also various ways to finance a solar system – from solar loans and leases to PPAs – so you can pick whichever option that works best for you.
Plus, solar panels provide significant utility bill savings in most areas. An average home solar panel system can save between $1,000 and $1,600 per year on electricity bills depending on the states net metering policy and the homes energy consumption.
Actual solar savings will depend on the system size, the cost of electricity, home energy usage, and what net metering policies are in place, but the average solar homeowner can expect their solar payback period to be between 8 and 11 years. After that, theyll be enjoying completely free solar electricity for at least 15 more years!
If youre still not convinced, you can use our solar panel calculator to find out how much solar costs and can save you for your specific home based on your average electric usage and prices in your area.
Reduce Solar Panel Costs With Seg Payments
In the UK, you can reduce your solar panel costs even more by making use of solar panel grants, like the Smart Export Guarantee . Through the SEG, you can earn money for exporting surplus solar power that your panels have generated back to the national grid.
The tariffs for exported solar energy can vary from supplier to supplier, but a good rate is 4-6p/kWh.
SEG generators that are seeking further guidance, you can read this guide on Ofgem’s website.
If you have a 3kW system installed, you can earn £75 per year through the SEG. With a 4kW system, you can expect annual earnings of £100, and with a 5kW system you can earn £120 per year.
Before the SEG came into play, the Feed in Tariff was the main solar panel grant available. Those that are already registered under the FIT can continue to receive payments, but the FIT ended in 2019, and no new applications are being accepted.
Watch our video below to understand what funding options are currently available for homes looking to install solar panels:
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State Solar Panel Rebates & Deductions
Individual states and cities offer their own policies, incentives and credits, as well. Some utility companies will even offer 10 to 20% rebates on your installation. With these incentives, combined with the ITC, you may be able to save as much as 50%.
- Washington: Utility companies offer rebates up to $2,000
- Massachusetts: Utility companies which offer rebates of $0.50/watt and up to $625/kW.
- New York State: Tax credit of 25% for PV systems.
- Florida: Permanent sales tax exemption for solar energy products. Also several utility companies offering $500 rebates on solar water heating systems, which cost an average of just over $3,500.
Leave Solar Panel Installation to the Pros
What About Solar Panel Costs In The Future
Many people in the solar industry expect the price of solar systems to continue to decline, albeit at a much slower pace. Manufacturers continue to progressively release improvements in cell efficiency and panel designs which are now edging leading Solar Panels towards 1,000W of power. However a lot of the early step change efficiencies of production have already been achieved in robotic-driven factories of enourmous scale. Additionally in Australia the STC rebate reduces each year until it is scheduled to phase out completely in 2030. This upward driver in solar prices has led to pricing level out over the last 12 months which can be seen in the above graph.
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How Many People Are Having Solar Panels Installed
Residential solar panel installations saw a huge peak in the 2015/16 financial year, with 95,122 0-4kW solar systems installed. Installations have dropped off a bit since then but are beginning to rise again with 32,370 installed in 2018/19 compared to 19,708 the year before.
With prices at a much lower level than they were around 10 years ago, its no surprise that the number of installations is beginning to rise again. If youre interested in generating your own renewable solar energy then you can get free quotes from up to 3 solar installers using Solar Guide. All you have to do is complete our simple online form.
Additional Components To The System
If youre looking to install additional components while installing the solar panels, this will increase your cost of equipment but can decrease the installation costs. Whether youre planning to install a solar battery storage system or additional features like pigeon proofing your panels, it is best to club them with installing the panels, so that you can decrease the installation cost.
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How Much Will The Whole Installation Cost Me
While it can be useful to know the price per solar panel, the real price comes from the entire solar power system and the installation. We are not a DIY-focused site, so for this cost analysis we are going to focus solely on installation costs through a certified solar installer.
Beyond just the cost of solar panels, there are many costs that go into a full-scale solar installation on your home. Here is a quick breakdown of all the costs that go into an installation:
- 25% Solar Panels
- 45% Operational Costs
We will do a future post with a full breakdown of these costs, but what is the actual cost of a solar power installation on your home?
Lets start by looking at the average installation. The average installation on an American home is a 5 kilowatt system. For 2020, the average cost per watt of solar systems in the US is $2.96 cents.
So lets do the math! If we multiply 5,000 watts by $2.96, we get $14,800.
But wait, dont forget about the Federal Solar Investment Tax Credit! With this credit , you save 26% of your total solar installation cost through a tax credit. When we take this 30% credit out of $14,800, we arrive at $10,952.
The average cost of the average solar system in the United States is approximately $10,592 after available tax credits.
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How Does The Cost Of Solar Power Compare To The Electricity Rates Charged By A Utility
Levelized cost of power from this typical solar system installed on a home in Oklahoma over 25 years is 6.1 cents/kWh.
Average cost of utility power over 25 years is 20.2 cents/kWh. This shows that solar is a far cheaper way to power your home in Oklahoma over the long term. The way we calculate the average cost of utility power is by assuming the current utility electric rates will grow each year at a compound rate of 3.5%. Actual inflation may be higher or lower than this but either way this analysis shows that solar is a clearly better choice.
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