Solar Panels Cost
So, exactly what is involved in calculating solar panels cost? When considering solar power very few of us know how the cost of solar panels is measured. Or even, for instance, do we automatically grasp the association between the cost of solar power and the value of solar power. Everybody knows that gasoline costs are in dollars per gallon. We additionally all know about the distance we’ll have the ability to travel after shelling out $40 for a tank of gas. Unlike a tank of gas, the value of which is enjoyed (and used up) more or less immediately, solar panels distribute their value spanning over a period of time.
With that in mind, the objective of this article is to answer a pair of issues: (1) How much do solar panels cost? AND (2) Can the value of solar panels outweigh the cost?
The initial question is closely linked to solar panels cost, so we’ll go over that first. Solar photovoltaic (PV) panels (which transform the sun’s rays into electricity) usually are priced in dollars per watt ($/W). Generally there are several details connected with this step. Chances are you may notice some people look at DC watts compared to AC watts. Also they may talk about another term known as dollars per watt peak ($/Wp). However, the key thing to realize is that, when you actually buy a solar energy system, you are basically paying for the means or “potential” to create electrical power now and into the future. Pretty neat, huh?
Now, how much are you going to be shelling out? What is the out-of-pocket cost of a solar PV system?
Considering the fact that each individual solar home project is a bit different, the result varies to some degree from house to house. And, considering the fact that solar rebates and solar tax credits usually are offered at the local and/or state level, the cost fluctuates to some degree from region to region. Note that all U.S. homeowners with federal income tax liability are able to take full advantage of a federal solar energy tax credit worth 30% of system costs. Listed here are a few helpful resources relating to solar energy costs:
(1) The Open PV Project, a project of the National Renewable Energy Lab, relays pricing information from the solar installation specialists across the nation. The 2010 countrywide average price of solar PV was $7.15 per watt. Not all of the solar installation companies participate in the project, for that reason the figures aren’t quite perfect. Yet the data can provide an idea of how much, for example, the average Arizona homeowner may be paying ($5.64/W) versus the average homeowner in New Jersey paying ($7.64/W).
(2) Some states require solar installers to submit the costs of their solar installations and authorities may withhold solar rebates in the event that numbers aren’t submitted. The end result is rather thorough solar panels cost information. Pennsylvania’s Sunshine Solar Rebate Program, as an example, is reporting a median cost of $5.32/W for domestic solar energy ventures with an average system capacity of 8 kilowatts (kW). Go Solar California, a joint venture of the California Energy Commission and the California Public Utilities Commission, is meanwhile reporting quarterly updates on domestic solar costs that are presently averaging around $7.19 per watt.
(3) If you are not certain, look for a general guideline. Whenever you are figuring out the cost for solar panels use a default cost of $7.00/W for residential solar projects. While this number might not be perfect, it is a reasonable figure to start with. Keep in mind that this pre-incentive figure is going to end up being reduced by any solar rebates as well as tax credits that are available in your region.
(4) Request at least two (ideally three) solar home energy quotes from experienced solar installers. Ultimately, it’s not until you are given a proposal in your hand that you will be able to determine about how much solar panels will cost for your home.
As pointed out above, since every single project is unique, it’s slightly difficult to generalize. But, presuming a pre-incentive cost of $7.00/W, a normal 5-kW system is going to have a gross cost of $35,000 ($7.00/W * 5,000 W = $35,000). Any existing solar rebates will lower the gross cost even more, as would the 30 percent federal solar tax credit.
Can the value presented by solar panels outweigh the cost?
Like the preceding response, this one fluctuates from project to project, and area to area. Within states which are “ideal” for solar, such as New Jersey, Pennsylvania, California, Arizona, Massachusetts Colorado and Hawaii, to name a few, a solar panel system can pay for itself in as little as three to five years and provide dependable, long-term energy savings. When you’re thinking of a domestic solar energy project, I suggest you look at the following factors, each of which plays a role in solar panels’ return on your investment:
(1)The price you have to pay for electricity. All things the same, people that pay a somewhat high per-kilowatt hour (kWh) cost for their electricity definitely will have the biggest monetary payback on their solar home energy system.
(2)The particular solar energy incentives accessible in your area. If you are living in a state where you’ll be able to sell solar renewable energy credits (SRECs), a home solar energy system doesn’t just reduce your electric bill, it is going to yield income beyond just utility savings.
(3)The quantity of sunshine or “insolation” in your area. While nearly all of the U.S. gets plenty of sunlight to make solar power a suitable proposition, solar energy systems do provide more power in sunnier places.
(4)The likely influence solar panels will have on the present worth of your home. In most cases, solar panels help to increase a home’s worth and, accordingly lessen its price of ownership.
A decent estimate will specifically demonstrate the year-over-year savings associated with a certain system. It will also come with a monetary analysis that indicates an estimated payback period of time and return on investment (ROI).
Naturally, it’s your choice, the homeowner, to decide exactly what financial return you desire in a home energy improvement. Many people are comfortable having a ten year repayment and understand the fact that a solar panel system is going to continue to produce inflation-protected savings for around an additional 15 years following that 10 year bench mark. Some other individuals may want a payback of, perhaps, 5 years or less.
On the whole, nearly all new solar power endeavors are drastically cutting homeowners’ electricity bills and providing a favorable ROI. The value of solar panels is more than the upfront solar panels cost. To be honest, in contrast, you will also find instances in states where regional solar incentives are small and/or electrical power is comparatively inexpensive. Examples include Kentucky, Alabama and Nevada. At the moment in these locations, it’s harder to claim whether the value of solar is actually higher than the expenses. Facing a 19-year repayment together with a return on investment in the low single digits, a property owner in Nebraska, as an example, can be understood for their uncertainty.
While solar panels cost is becoming more economical every day, and while a growing number of states are taking steps to promote demand for solar power, you can believe that the value of a home solar energy system improves for all of the property owners across the nation. If you’re lucky enough to be in a state where the value of solar already surpasses its cost, don’t ignore a terrific opportunity!