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There is currently enough solar power being utilized in America to power more than twelve million homes. While solar energy used to be reserved for the wealthy and environmental extremists, it’s not uncommon any longer to see solar panels installed on homes across the country.
One of the main reasons why solar panels are so popular is because of how much money they’re able to save the consumer. Sure, solar panels might come with some unattractive upfront costs. However, by understanding the true cost of solar energy, you’ll be able to make a more educated decision about your home’s energy costs.
Are you wondering if you can save big with solar energy? Keep on reading and we’ll take you through everything you need to know about solar energy costs and savings!
The Most Efficient Solar Panel
Over the last ten years or so, solar panel technology has advanced greatly. Solar panels can be divided into three primary technologies: thin-film, polycrystalline, and monocrystalline. Each kind of panel makes use of different technology to harness the sun’s energy and has a different set of applications.
Monocrystalline solar panels are the most effective kind of solar panel in terms of power output relative to the size of the panel. These panels have the best efficiency rating on the market and take up the least amount of space.
These panels also last for the longest amount of time. In fact, monocrystalline solar panels can last you more than 25 years.
This is thanks to the high-purity silicon that’s used during the manufacturing process. These solar panels also have the most expensive upfront costs out of all of the solar technologies.
Polycrystalline solar panels are made with multiple silicon crystals. These panels are moderately efficient.
Polycrystalline solar panels need more space in order to match the amount of power output that monocrystalline panels can create because they have lower silicon purity. These panels can last for around 25 years and are usually seen as the most cost-effective option.
Finally, there is thin-film technology. This is a newer technology that is made possible by depositing a photovoltaic material onto a surface. The photovoltaic materials that are used aren’t as energy efficient as crystalline silicon.
These panels also need a lot more space to create a significant amount of energy, which limits their ability to be installed on residential buildings. They are also not as durable as the other kinds of panels listed.
With that said, these panels are significantly cheaper to make and can even be flexible, making them a good option for certain areas where other kinds of panels can’t be installed.
Location, Location, Location
It should be noted that you can’t simply look at general prices of solar panels to see how much you can generate in both savings and energy output. Solar panels installed on a home in Texas are going to generate a different amount of electricity than an identical one in Maine or Georgia.
This is because of a factor known as the solar resource. The solar resource is how much sun is available each day to a solar panel.
To find the solar resource in your area, you should visit the solar maps that are made by the National Renewable Energy Lab. By knowing the solar resource in your neighborhood and how much power you want to output, you will be able to get a better idea of what size system you’re going to need.
For example, the average annual electricity consumption of an American residential customer, according to the U.S. Energy Information Administration, is 10,908 kilowatt-hours (kWh). To make that much electricity, a home in New England would need a system of around 7 kW to 10.5 kW at a cost between $26,000 to $39,000.
Most solar cost estimators are available on the internet to help you get an idea of what your specific solar costs might be.
New leasing and financing options now make it possible to install solar panels with no money down. For example, the New England home in the earlier example would be able to receive financial incentives that would reduce a $33,000 system’s upfront cost down to around $12,000-$16,000 — or $0.
Many people turn to reputable solar companies like Blue Raven Solar Company because they want to lower their energy bills. How much a solar installation can lower an electricity bill will have to do with the state and local laws.
For example, in Rhode Island, that $33,000 system could be lowered thanks to a combination of:
- the federal tax credit
- a statewide renewable energy tax credit
- a statewide renewable energy program that pays the homeowner for generating electricity
This will bring the upfront cost to around $14,000. The homeowner’s utility bill savings will be more than $60,000 over the course of 25 years.
Financing and leasing options could bring the upfront costs down to zero dollars. And the savings on the electricity bill every month would more than cover the financing costs, meaning that the resident could easily come out ahead.
In most states, there are two main incentive paths that a resident can take. Each path will bring a different return on investment. You can go with feed-in tariff or net metering options.
When you go with net metering, the solar panels will be offsetting the energy use of the home on which they’re installed. The state will then pay the full retail value per watt to the resident.
The system works by using one meter that can count down or up as electricity is made and used.
With a feed-in tariff system, the resident gets a second meter on the house that measures the outflow of the power from a home. This is independent of how much the home actually uses. This means that the electricity generation and electricity consumption will be priced separately.
Part of the production value will be used to pay the resident’s own electricity bill. The excess value will then be given to the resident in the form of a check.
Estimate Residential Solar Panel Cost
Most of the money that spend on solar panels will be on the installation as well as the purchasing of the actual materials.
The upfront costs can be made up of minimal long-term expenses. Most systems don’t need a lot of maintenance. And they’re built to last for decades with little change to how much power they produce.
When you’re figuring out the total price, you need to consider how much electricity you consume regularly. Your usage will be listed on your monthly electricity bill. You’ll then need to figure out what size system you will need to create that amount of electricity.
When it comes to installation costs, you can expect a 5kW size system to cost you around $4 per watt. This means that you can expect to pay around $20,000.
This is before any incentives and tax credits, of course.
Once you know how much you expect to pay for solar panels, you need to shop around, just like you would for something like a television or car. Some companies will offer lower installation costs via rebates or other offers.
You want to get quotes from multiple contractors. Make sure to check out reviews and the company’s page on the Better Business Bureau site to get a sense of how reputable they are.
Solar Panels Can Increase the Value of Your Home
Another cost you might not be taking into account is the effect on your home’s resale value. Buyers tend to take monthly electric bills into consideration when buying a house. When, when they are going over the long-term financial value, they are open to the premium of a solar-ready house.
Installing solar panels is often seen as an upgrade. Similar to a renovated kitchen, a buyer will likely be willing to pay a premium for the environmental and economic benefits of a house with solar energy.
Thanks to tax incentives for new installations and lower monthly electricity costs, residents can realistically expect to not just recover their original investment but also gain a nice return on their investment.
If you buy a solar panel system you can expect to add a good amount to your home’s value. This a sustainable and smart solution that can help get your home off the market quicker.
The Importance of Knowing the True Cost of Solar Energy
Hopefully, after reading the above article, you now have a better understanding of the true cost of solar energy. As we can see, you can realize real gains when you go with solar energy.
Of course, you can’t just jump into it without doing your research. You’re first going to need to know your local and state laws and see what kind of incentives you qualify for. But once you do that, you’ll be able to make smarter decisions when it comes to your finances and power consumption.
Make sure to check out the rest of our site for more helpful articles like this one!