COST OF SOLAR PANELS

So what exactly is involved in calculating the cost of solar panels? When it comes to solar energy, few people know how the cost of solar panel systems is actually measured. Or do we even automatically record the connection between the cost of solar power and the value of solar power. We all know that gas prices are quoted in dollars per gallon. Likewise, we all know roughly how far we can go if we spend $40 on a tank of gas. Unlike a tank of gas, whose value can be used up fairly instantly, solar panels deliver their value over a period of time.

With that in mind, this article aims to answer two questions: (1) How much do solar panels cost? AND (2) Can the value of solar panels outweigh the cost?

The initial question is directly related to the cost of solar panels, so we’ll address that first. Solar photovoltaic (PV) modules (which convert the sun’s rays into electrical energy) are usually priced in dollars per watt ($/W). In general, there are several facts associated with this step. It’s possible that you hear some people talking about DC watts vs AC watts. Additionally, they might mention something called dollars per watt peak ($/Wp). But the most important aspect to remember is the fact that when you decide to purchase a solar power system, you are actually acquiring the ability or “potential” to generate electricity now and in the future. Pretty neat, right?

That being said, how much money are you going to pay? How high are the own costs of a solar PV system?

Considering that every single solar home installation is a little different, the result will differ a little from house to house. And considering that solar rebates and solar tax credits are typically provided at the state and/or local level, the price varies somewhat from region to region. panneau solaire Note that all US homeowners who are subject to state income tax are eligible to claim a federal solar energy tax credit equal to 30% of the cost of the system. Here are some useful solar energy cost resources:

(1) The Open PV Project, a project of the National Renewable Energy Lab, includes pricing data from solar installers across the country. The nationwide median price for solar PV in 2010 was $7.15 per watt. Not all solar installers participate in this program, so the numbers aren’t entirely perfect. Still, the information provides an idea of how much, for example, a typical homeowner in Arizona ($5.64/w) might spend compared to the average homeowner in New Jersey ($7.64/w).

(2) Certain states require solar installers to report the prices of their solar systems, and authorities may withhold solar rebates if figures are not provided. The end result is fairly accurate solar panel cost data. For example, Pennsylvania’s Sunshine Solar Rebate Program reports an average rate of $5.32/W for residential solar power projects with an average system capacity of 8 kilowatts (kW). Go Solar California, a joint venture between the California Energy Commission and the California Public Utilities Commission, currently releases quarterly updates on domestic solar costs, which average about $7.19 per watt.

(3) If you are not completely sure, choose a rule of thumb. Any time you calculate the cost of solar panels, use a standard value of $7.00/W for residential solar projects. While this character might not be perfect, it’s a good character to start with. Keep in mind that this premium number can ultimately be reduced by the solar rebates offered in your area along with tax credits.

(4) Try to get at least two (ideally three) quotes for solar energy for your home from accredited solar installers. Ultimately, you can only know how much the solar system for your home will cost after you have received a concrete offer.

As mentioned above, due to the fact that each project is unique, it is quite difficult to make generalizations. Nonetheless, assuming a pre-incentive cost of $7.00/W, an average 5kW system would likely have a gross cost of $35,000 ($7.00/W * 5,000W = $35,000). Any sort of solar rebate will lower that gross cost even further, as will the federal 30 percent solar tax credit.

Does the value of solar panels outweigh the price?

Like the previous answer, this one varies from project to project and location to location. In states that happen to be “ideal” for solar, such as New Jersey, Pennsylvania, California, Arizona, Massachusetts, Colorado, and Hawaii, among others, a solar system pays for itself in as little as three to five years, delivering reliable, long-term energy savings. When considering a residential solar energy project, you should consider the following factors, all of which play a role in the return on your investment from solar panels:

(1) The actual price you have to pay for electric power. Despite this, individuals who pay a relatively high price per kilowatt hour (kWh) for their electricity can get the greatest monetary payback for their solar home energy system.

(2) The solar energy incentives available in your region. If you live in a state where you can sell Renewable Solar Energy Credits (SRECs), having a solar power system for your home will not only reduce your electric bills, but it will generate revenue in excess of the utility savings.

(3) The amount of sunshine or “insolation” at your location. While much of the US receives ample sunshine to make solar power an effective proposition, solar power systems in sunnier locations provide more electricity.

(4) The likely impact solar panels should have on the value of your home. Typically, solar panels improve the value of a home and correspondingly lower the property price.

A solid offer will accurately illustrate the annual cost benefits associated with a particular system. It will also include a cash flow assessment providing an estimated time frame for investment recovery and return on investment (ROI).

Of course, as a homeowner, it is your decision to determine what kind of financial payback you want from an energy renovation of your home. Many people are satisfied with a 10 year payback and understand that after this 10 year period a solar panel system will continue to provide inflation-protected financial savings for up to 15 more years. Other types of homeowners may want an investment return of perhaps 5 years or less.

In general, countless new solar energy projects significantly reduce homeowners’ electricity bills and offer a positive ROI. The value of solar panels is much higher than the initial cost of solar panels. To be honest, you can find cases in states where local solar incentives are weak and/or power is pretty cheap. Examples are Kentucky, Alabama and Nevada. Currently in these locations it is difficult to say whether the value of solar energy is greater than the cost. With a 19-year investment recovery coupled with a low single-digit return on investment, one person in Nebraska, for example, can be forgiven for his concerns.

As the cost of solar panels becomes a little more affordable every day, and as an increasing number of states implement policies to stimulate demand for solar energy, you can expect the value of a home solar energy system to improve for almost every homeowner across the country. In case you are lucky enough to find yourself in a state where the value of solar energy already exceeds its cost, don’t miss out on this incredible opportunity!

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