Friday, April 12, 2024

Why Are Solar Panels Expensive

Solar Panel Cost Breakdown

How solar energy got so cheap, and why it’s not everywhere (yet)

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.

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 Is The Roi On Solar Panels

You can calculate the return on investment for installing solar panels by calculating your total payback. Calculate the amount you spent to install a solar panel system and then figure out the amount you will save on energy bills monthly. These two numbers show how quickly your savings will cover your initial costs. Electricity rates will vary by region, being higher in the Northeast than in the Northwest. Solar tends to be more cost effective where electricity prices are high and sunshine is abundant.

40 percent of homeowners

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Impact On Electricity Network

With the increasing levels of rooftop photovoltaic systems, the energy flow becomes 2-way. When there is more local generation than consumption, electricity is exported to the grid. However, an electricity network traditionally is not designed to deal with the 2- way energy transfer. Therefore, some technical issues may occur. For example, in Queensland Australia, more than 30% of households used rooftop PV by the end of 2017. The famous Californian 2020 duck curve appeared often for a lot of communities from 2015 onwards. An over-voltage issue may result as the electricity flows from PV households back to the network. There are solutions to manage the over voltage issue, such as regulating PV inverter power factor, new voltage and energy control equipment at the electricity distributor level, re-conducting the electricity wires, demand side management, etc. There are often limitations and costs related to these solutions.

When electric networks are down, such as during the October 2019 California power shutoff, solar panels are often insufficient to fully provide power to a house or other structure, because they are designed to supply power to the grid, not directly to homes.

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Why is Shipping for Solar Panels so Expensive?

For example, some scientists are currently tinkering in laboratories with solar cells made from a material called perovskites. These cells have achieved stunning improvements in efficiencies in very short time frames. This technology isn’t yet ready for prime time, but in theory we might one day make ultra-cheap, thin, transparent perovskite cells that could coat our shingles and windows.

That’s not the only tech worth exploring. Sivaram notes that quantum dot solar cells hold the promise of being able to bust through traditional thermodynamic efficiency limits. And organic solar cells might be able to do some of the things perovskites can, only without requiring toxic lead.

The catch is that all of these newfangled ideas are risky, uncertain, and quite far from commercial viability. Perovskites haven’t generated much interest from the private sector to date, since the cells aren’t yet durable enough to withstand real-world use and most companies prefer to focus on existing silicon panels, which are extraordinarily reliable.

Ultimately, Sivaram says, industry investment will be essential if all this advanced technology is ever to escape the lab. Academics tend to be far more interested in testing innovative solar cells under ideal conditions, rather than doing the sort of durability testing that makes sure these devices hold up in the real world.

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The Cost Of Complexity

The cost of solar panels has decreased continuously and drastically in the past 40 years, equaling $76 per watt in 1977 versus roughly $0.65 in 2016. Due to the importance of cost per wattage, there is a distinct chance that the most expensive option may not be the right choice for you. Its important to understand the specifics of the product, from its monocrystalline or polycrystalline solar cells to the type of inverters, racks and mounts, or monitoring technology which impact the suitability of each product to your needs.

  • Complex Roofs: If your roof has multiple levels, an unusual angle, dormers, or tile/slate shingles, the installation of your solar panel may be more complicated than you expect. Your installer will position the panels for optimal energy production, but the added complexity and effort required can increase your costs.
  • Landscaping: Shade is among solar powers greatest enemies, so you may find yourself from time to time needing your trees trimmed to optimize your panels production. This can increase your costs as well, so it is always wise to consider doing these sorts of jobs yourself if possible.
  • Equipment Costs: When determining the cost of installing solar panels onto your home, there are a few factors to consider:

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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Estimate Residential Solar Panel Cost

The brunt of the expense with solar panels is in installation and the purchase of the actual panels.

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Minimal long-term expenses can make up for the upfront costs. Most systems dont require much maintenance and are designed to last for 20 years or more with little change to the amount of electricity produced, Nilsen says.

When calculating the total price, consider how much energy you regularly consume your usage is listed on your monthly utility bill and what size system will generate the amount needed. Some tools, like the SolarReviews calculator, estimate the system size for you.

With installation, an average residential 5kW size system costs between $3 and $5 per watt, according to the CSE, which results in the $15,000 to $25,000 range. That cost is before any tax credits and incentives.

If you know your current energy usage, you can calculate how much youll need to pay for solar panels.

» MORE: Calculate your monthly payments on a solar loan

Then comparison shop for solar panels as you would other big-ticket items, such as a car or TV, says Vikram Aggarwal, CEO of the solar marketplace EnergySage. Some companies lower installation costs through rebates and other programs.

Aggarwal recommends getting quotes from three to five contractors. EnergySage compiles solar companies customer reviews, certifications, Better Business Bureau profiles and other information to help you find reputable providers.

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There are some long-term costs associated with solar panels. We’ll explain everything you need to know.

Solar panel repairs and maintenance can add up over the years, but keeping them in good condition can help.

Many people are aware of the upfront costs of installing solar panels, including the price of the system, permits and contractors. However, something that isn’t discussed as often is the ongoing expense of maintaining a residential solar system.

Fortunately, while there are some extra costs associated with keeping your solar panels running, they are generally low and infrequent. Plus, the benefits of solar energy will almost always outweigh the expenses that you’ll incur in the decades-long lifetime of your solar system.

Regardless, it’s important to understand all of the potential expenses before you buy a solar system. Here’s an overview of additional costs to bear in mind when considering a solar investment.

Read more: Want to know how long your solar panels will last? Find out here

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How To Mitigate Unexpected Expenses

You can’t predict when a storm or freak accident might cause damage to your solar panels. However, there are preventative measures you can take to minimize the risk of expensive repairs in the future.

At a minimum, you should check the condition of your solar system at least once per week. You don’t have to get onto the roof and inspect the panels, but you should walk around your property and make sure that your panels are clean, un-cracked and not completely covered by shade. Any damage should be reported to your solar provider to prevent more serious long-term issues.

Similarly, if you notice any animals around your system, ask your solar installer about adding a critter guard. Otherwise, local wildlife can make their home underneath your panels, potentially resulting in costly repairs for chewed wires and panel damage . Critter guards also reduce fire risks by preventing debris from gathering underneath your panels.

Finally, be sure to monitor how much energy your system is generating each week. If you observe any significant changes, there may be something wrong with your solar panels, inverter or solar battery . Contact your solar provider to troubleshoot and identify solutions.

Labor Installation And Permitting: Added Complexity Can Increase Cost

Warranties: From workmanship to equipment, having warranties on your solar energy installation can ensure that you get the most power from your system. Make sure youre hiring the right installer that offers the right warranty to meet your budgetary requirements.

Complex Roofs: If your roof has multiple levels, an unusual angle, or dormers, installing your system may be more complicated than usual. Your installer should arrange the panels for optimal energy production, but the added effort will increase costs. Distributing solar panels across multiple levels will add complexity, as will installations on certain roof types .

Landscaping: If you need to trim branches or landscape your area for optimal energy production, this may also add to the total cost of your system. To save money, consider doing this work yourself ahead of time or hiring a local tree pruner.

Improving Your Electrical System: Though unlikely, your electrical system could require an upgrade in order to be brought up to code. If needed, this added work would increase the costs of your solar installation. To spread these costs out, consider upgrading your electric system in one month and then going solar in the next.

This post first appeared on Mother Earth News.

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How Does Sunlight Amount Affect Solar Panels

Different areas of the United States receive more or less sunlight compared to other areas. The amount of sunlight you receive directly correlates with how many solar panels you will need.

Typically, southern states get more sun than northern states. But southern states with higher altitudes and less cloud coverthink of Arizona and New Mexicoget more energy from the sun than states such as Florida or Georgia. So, for the same size house, you would generally need more solar panels in Georgia than you would in Arizona.

Remember, the sun may be shining, but if it is behind a cloud, youre not getting the same amount of solar energy absorbed by your solar PV system. This means that a solar panel in San Diego will produce more energy in a year than the same exact solar panel located in Seattle.

The image below will help you determine the solar energy, known as solar insolation, in your area. Exploring your sun number score should also be helpful. If your roof does not get a good amount of sunlight and you live on a good size amount of land, you may have other options for mounting solar panels elsewhere with better sunlight.

Take Out A Loan To Cover The Domestic Solar Panel Uk Cost

Why Is Solar So Expensive? Here
  • If you dont have the capital then the second option is to get a loan to pay for them. This method will allow for a considerably longer term investment but will still offer some reward and offer the comfort of protection from rising energy costs. The loan and cost of the system should break even within the lifetime of the system if worked correctly.
  • unfortunately, there is no longer a way to receive free solar panels, this is due to the end of the FIT on the 30th March 2019. Any schemes that did exist are no longer viable.

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Is It Worth Emulating Australias Solar Industry

Recently, problems with installed solar systems in Australia have begun to surface. According to various articles, consumers who anticipated 20 years of production and savings from their solar panel systems have seen their equipment malfunction, break or reduce production sharply after only 5 years. The original solar energy systems installed in the US are still operating smoothly after 20 years, so why is the same not holding true in Australia?

To a large degree, it appears the lack of regulatory oversight has allowed for the cheap installation of sub-standard solar panel systems, from the solar equipment and components used in the installation to the actual installation of the solar panels. Interestingly, the same policy and market forces that have helped deliver inexpensive solar to Australian residents are also responsible for the issues observed with Australian solar installations. Though these policies have reduced the time to installation, theyve also reduced the opportunity to catch errors in installation or issues with equipment.

While there are new techniques that the American solar industry can explore, such as finding ways to reduce the time required during the permitting process or by hiring dedicated solar installation inspectors, theres a balance to be struck to ensure that US solar panel installations maintain a high quality and continue to produce electricity for decades to come.

Chinese Standard Solar Panels

By one estimation, cheap Chinese solar PV panels have led to an 80% price drop. Chinese workers are paid lower wages, and there are fewer regulations. This has dramatically lowered standard solar costs, but now the United States Congress is planning on leveling a feed-in tariff, which will increase the price.

One solar panel manufacturing technique uses cerium oxide to increase the UV absorbing properties of glass modules. Unfortunately for the solar power industry, cerium oxide is an expensive rare earth mineral, according to Mother Earth News. While China only controls 30% of rare earth minerals, it controls 90% of the market.

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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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