The Cost Of Solar Panels: Is It Worth The Savings? - My Florida Solar East LLC

The Cost Of Solar Panels: Is It Worth The Savings?

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The solar industry is one of the fastest-growing renewable energy industries. It not only offers an opportunity to save on the cost of electricity but also benefits the environment by decreasing the number of fossil fuels being consumed globally.

Whether you opt to go through one of the reputable solar companies in your area or do a DIY solar installation, you can start seeing solar savings and reducing your electricity bills from day one. There are several payment options for solar systems with upfront payment providing the most substantial return on investment. This initial investment negates the need for a solar lease or long payback periods that could decrease the savings you see by switching to a solar electric system.

When we speak about solar electric systems, we generally refer to photovoltaic panels, or RV solar panels, which turn the sun’s light energy into electrical energy. Here is a detailed description of how solar panels work.

What Is The Average Price For Solar Panels?

The Center for Sustainable Energy estimates that the cost of residential solar panels (not utility-scale solar systems) and their installation is between $15,000 and $25, 000. This is calculated for a 5kW solar system where the solar cost is between $3 and $5 per watt. These amounts are before calculating savings due to tax incentives and credits.

Most solar systems require little maintenance and can last up to 20 years or longer while working at a consistent level of efficiency. This means that most of the expenses of a solar panel lay in upfront costs – that of purchasing and installing the system.

Solar systems require more than just the PV panels to supply solar electricity to your home since solar panels make up about 30% of your solar panel installation cost. There are different types of solar panels, each with their benefits and drawbacks. The type of solar panel that you need to install in your home or business depends significantly on your specific needs and situation. The most expensive and highest quality solar panels are not necessarily the best solution for you. Read more about the different types of solar panels here.

What Are The Different Kinds Of Panels?

Know what type of solar panels would work best for your needs. You also need to consider which kind of solar inverter is best for you and whether you will be making use of a battery bank like many off-grid systems, or if you will be grid-tied.

Most commercially available home solar systems are made from silicon. They can be monocrystalline, polycrystalline, or thin-film solar panels. While monocrystalline panels generally have higher efficiency when it comes to generating electricity, they are also more expensive than polycrystalline panels. Polycrystalline solar cells function slightly better in higher temperatures, but they also need a more substantial amount of space to generate the same electricity rate as monocrystalline solar cells.

Thin-film solar panels are cheaper but also less efficient, which means you need a much larger number of cells to generate the same amount of electricity.

Solar panel manufacturers use different materials, technology, and configurations, which could lead to variations in the solar panel cost, quality, and efficiency of various solar cells. The most expensive solar cells might not give you the best value for your investment, and neither could a less expensive system. The best way to identify which configuration would work best for you is to calculate your energy needs, then work out which configuration would produce that, or more, at the lowest initial investment – with the lowest maintenance requirements.

Solar thermal heating panels. While PV cells convert sunlight into electricity, solar thermal panels use the sun’s heat to heat hot water. By installing solar thermal panels, you can reduce the energy required to heat water, and thus require a smaller PV system for your home.

Solar systems produce Direct Current (DC) electricity while most electronics run off of Alternating Current (AC) electricity. An inverter needs to be installed into a solar system to convert the DC electricity to AC electricity. There are several different inverters available on the market. These include string inverters (where multiple solar panels are connected and converted as a string) and a micro inverter that converts DC electricity to AC electricity for each solar panel. An inverter will make up about 10% of the cost of your solar system.

All the other hardware required for a solar panel system installation is referred to as the Balance of System (BoS). This includes the wires, switches, and electrical components that are needed for the system to function. It also consists of the mounting hardware -the mounting systems that hold the panels onto the roof. These might differ depending on the local weather patterns, size of your solar module, and the pitch of your roof, amongst other things.

There are three main mount types available:

  • Fix-mounts are the least expensive, but the mount is stationary and cannot be moved.
  • Adjustable-mounts can be tilted to maximize the amount of sunlight the panels get exposed to. They can also be laid flat during a storm.
  • Tracking-mounts follow the sun’s arc through the sky. They are the most expensive and could require more maintenance but can increase your energy production by 45%.

BoS components make up about 20% of your total solar system installation costs.

The installation cost for your solar system includes payment for labor and permits. This consists of a permit from your roofers to state that your roof can hold the weight of the solar system. You will also need a permit from your utility company to connect your solar system to the grid. These costs make up around 15% of your solar system amount.

Future maintenance costs of your solar system will be about 20% of your overall costs. This could potentially include regular washing of the solar panels. Other maintenance-related prices could consist of replacement or fixing of a broken or cracked glass panel, fixing loose connections, or replacing the inverter. Some of these might be covered by your warranty and might not be an extra cost to you.

How Many Solar Panels Are Needed To Power A Home?

First, you need to know how much energy you use. Look at how much electricity you have used in the past year. Then work out your average monthly electricity usage in kilowatt hours (kWh). By knowing the average amount of kWh of electricity you use per month, you can decide on the size of the installation you need. You might want only to reduce the amount of energy that you get from the grid (which means you need a smaller system), or you could choose to generate enough electricity for your needs.

You could also opt for an off-grid solar system where you are entirely self-sustained in terms of energy generation. In this case, you will need to invest in a battery bank to store energy for times when your system does not produce energy like during the night. The battery banks required by these systems could be expensive and require a large amount of space.

Do You Really Save Money With Solar Panels?

Solar installation companies can make use of a Solar Pathfinder or similar tools to calculate how much sun your house (and in particular your roof) gets in a year and thus how much energy you might be able to generate. They can also measure how much light and sun a specific area gets and give you a better estimate of how much electricity you can expect a system to generate – and how much you can save.

The following factors need to be taken into consideration when looking at how much you can save by switching to solar power:

Areas, where there are more hours of sunlight on average each day, have a higher potential to see higher savings with solar energy as solar installations these areas are likely to function more efficiently.

The size, angle, and pitch of your roof could all influence how much you can save with a solar panel system. A smaller roof means a smaller solar array (or system). This means that you have a lower upfront solar energy cost, but it also means that your solar system will produce less energy than a more extensive solar system, curbing your long-term savings.

Solar panel installations on roofs that have steep pitches, or that have very shallow pitches could see lower energy production as can roofs that are facing north or east. Roofs that face the south or the west, with more gradual pitches, tend to be exposed to the sun for more extended periods during the day – and for a higher average time per year. This increases the amount of energy that they can produce each day, and on average, each year compared to systems that are the same size but not installed in the optimal conditions.

If part of the solar panel installation is in the shade for part of the day, the system will not work efficiently, reducing the amount of kWh of electricity that your solar system can produce. Tall trees, mountains, or buildings in the surrounding areas will affect how much money you can save by installing a solar panel system.

What Are Some Costs I May Not Have Thought Of Yet?

There are some costs involved with solar panel systems that might not be too obvious. Solar panel systems should be insured, and the cost of this insurance should be calculated into the solar panel price. Similarly, you need to consider the age of your roof. If you might need to redo your roof during your rooftop solar system’s lifetime, you will have to factor uninstalling and reinstalling costs into your total expenses. On the other hand, installing residential solar panels on your roof could lengthen your roof’s lifespan by shading a large part of it.

How Can I Save With Solar Panels?

Remember that you will only be saving on the electricity that you use and not things like taxes and connection fees.

Some grid suppliers have savings calculators on their websites to show you how much you could save based on your energy usage in the past. They automatically factor in the projected rate increases over 20 years. This is the easiest way to roughly determine how much you will save if you install a solar power system.

The savings you get from installing a solar system is not static. Electricity rates increase annually. That means that by installing a solar system, you will save more in the future where you would be paying higher fees per watt. By installing a solar PV system, your energy rates are constant, and you are no longer dependent on the volatility of utility rates.

How Can I Reduce The Cost Of Solar Panels?

Compare the prices for various solar systems, and different solar system installation companies as you would for any other large purchase. Ideally, you would like to get quotes for comparison from three to five different solar panel system contractors. Research a solar company that you are considering using, find out their manufacturing process, and their ratings and panel efficiency.

An indirect way to reduce the size of the solar system that you require is by reducing the amount of electricity that you use. You can do the following to lower your electricity usage:

  • Replace all the light bulbs in your home with LED bulbs.
  • Unplug electronics when they are not in use (some might use small amounts of electricity while in standby mode).
  • Make use of solar thermal systems to heat water.

Financing Options

There are several financing options available if you do not have the cash to invest in a solar system.

Some solar companies have solar panel systems available for leasing. Leasing panels will not increase the value of your home, and you will likely not be eligible for a solar incentive. By leasing solar panels, you might get a few dollars off of your electricity bill, and in some cases, you might even end up paying more.

While some solar installers offer solar loans, you might find better financing options elsewhere. Some banks or credit unions offer loans dedicated to solar energy systems. You could be eligible for a low-interest solar loan or rebates available in your area.

Paying the total solar price beforehand can give you the best returns for your investment and allows you to take advantage of any federal tax credit available.

It could also pay off to get quotes from smaller solar system installers as they might end up being cheaper than larger companies.

Incentives

In a bid to encourage users to move to solar power, many government organizations have started offering incentives to those who are considering installing solar panel systems at their homes or businesses. In the United States, a federal solar tax credit allows taxpayers to claim back 26% of the installation costs for a solar system installed before December 31, 2020. This goes down to 22% at the end of 2020 and is said to expire on December 31, 2022. This residential solar tax credit (also known as an investment tax credit) can reduce the amount of tax a taxpayer will have to pay or could be in the form of a solar rebate.

Some areas offer incentives like cashback, also known as tax rebates, or property tax exemption. Other incentives could include waived fees and expedited permits or the option of selling excess energy to utility companies. In some areas, selling electricity to a utility company is done based on a credit system called net metering.

Net metering works by installing a two-way meter. If solar power generators produce more electricity than they use, the excess electricity will flow into the utility grid, and the producer will accumulate a credit. This credit can then be used when or if the producer needs to make use of grid-energy. Again, different companies could charge different rates for these meters, which needs to be discussed with the solar installer.

The cost of solar systems is decreasing as the demand for them rises. Solar companies are continually researching and developing better and more cost-effective ways to produce solar panel system components. Investing in a solar energy system is a massive decision that could provide significant savings on electricity bills. Purchasing the best solar system components for your area and electricity needs requires you to do some research to get the best return for your investment, but it is well worth it.

 

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