What is the true cost of solar power?
What is the true cost of solar power? The answer to this question may determine whether or not you decide to install solar panels on your home or business. In fact, in the current economy, everyone is worried about investments, and whether they make sense long term.
How does the cost of solar power factor in?
In order to accurately determine solar energy cost, you’ll need to consider a range of factors. Get your pencil out… you should write these down:
- Current utility bills, averaged on a monthly basis
- Projected future utility bills, over your estimated years of ownership of the property
- Amount you may save annually in electricity bills
- State and federal solar energy tax rebates and other incentives, such as no money down
- Type of solar panel system you want to install: PV Panels or Solar roof shingles?
- Other potential energy savings, through energy efficient bulbs, shutting off lights, adjusting thermostats
- Other potential energy retrofitting measures, including windows, insulation, Energy Star appliances, etc.
Solar energy cost is defrayed in a number of ways
When you consider the fact that solar power is free, once you install the panels, it may be worth it to consider converting now. Case in point:
Let’s say that your solar panel system will cost you $10,000 (after a retail cost of $18,000 and with tax rebates, etc.). Now, consider that your monthly utility bills average $200 a month, which is $2,400 a year. That alone would be about a 4-year return on investment, but wait! What about the increase in value of your home? If you can save the entire $2400 a year, multiply that figure by 20. That’s right: $48,000 in additional property value!
Now, add in the rising electricity rates that you won’t have to worry about. Oh, and the cost of continued global warming – you are doing your part you know… priceless!
You see, it just takes some focused arithmetic to determine the true cost of solar power. Think beyond your initial investment/outlay, and I’ll bet you will soon see that solar energy is the way to go, without requiring you to break the bank.
Tags: solar energy cost, true cost of solar power, what do solar panels cost
September 29th, 2009 at 11:08 pm
Is there a study to back up the increase in home value argument?
September 30th, 2009 at 12:22 am
Yes, there is. From the U.S. Department of Housing and Urban Development: home values rise an average of $20 for every $1 reduction in annual utility bills. (read more at this CNN article: http://www.cnn.com/2008/LIVING/homestyle/03/04/so…
July 20th, 2010 at 8:20 pm
Your $200 a month electric bill would imply 2500 kWh per month consumption. Does your $18k "retail" cost provide 2500 kWh per month of regulated 240 VAC, 60Hz with low distortion operating reactive loads? Does your "retail" cost include free replacement or repair for lightning, hail, wind and fire damage?
November 17th, 2010 at 8:23 am
Your numbers are WAY off. There is nowhere in the US as of Nov 2010 that a $10,000 PV system will produce $200 of power a month. Here in the Southwest (lots of sun), our 2.94kW system ($16K, before rebates, etc) will produce $70 of power in a good summer month and $25 of power in the winter.
I estimate a system that will produce $2400 of power per year (Phoenix, AZ) will have to be 15kW and would cost $68K AFTER rebates and incentives. The high cost is due in part to utility incentives for residential installs limited to 5kW.
Your simple payback period is now 28 years, not 4. A smaller system will tend to have a better payback period based on the way most solar credits and incentives are designed right now.