The Cost of Solar
The price of solar really comes down to the performance of the system. How do you know what the system will produce? Most companies under promise and over deliver, but that is hard to do in a competitive market when you are trying to stand out. There are a couple of performance variables to understand when buying a system. Panels, inverters, direction and pitch of the design and install, connection of wiring, size of wiring, racking or mounting and conditions of surroundings are all real variables that will affect the performance of the system. It will also affect the value of the system based on performance against electrical cost that it offsets. Are all panels created equally? NO! Although most panels performance per cell isn’t extremely different, how each manufacture rates and sells their panels are different. That means the consumer is buying how the panel is sold.
Photovoltaic solar panels produce power through generation of watts of energy. Panels come in different “strengths” or wattage levels. Solar panel sizes vary from very low wattage levels up to 280 watts worth of power. Solar systems are sold as complete installs by watt. This includes the cost of all supporting parts of the system in conjunction with the panels. The total cost of a solar energy system is made up of multiple factors. The panels themselves are one portion and the balance-of-system (BOS) is another part of the cost of a solar energy system. The BOS is essentially everything other than the solar panels – the electrical wiring components, the racking and mounting hardware, the inverter or microinverters, and the labor cost to install.
The national average cost per watt is somewhere between $6 dollars and $3 dollars per watt. Generally, the cost per watt of a solar energy system decreases due to economies of scale when more solar panels in a system (and a higher overall wattage level) are purchased. With affordable solar solutions from Solar Wise USA, a small 4 solar panel system that has a total power output of 1,120 watts (1.12kW) costs $7.20 per watt while a larger 24 panel system that has a total output of 6,720 watts (6.72kW) costs $4.75 dollars per watt. A large megawatt (MW) array can be priced as low as $3 dollars per watt.
When you purchase a solar energy system for your home or business you are purchasing a system that will produce power for your needs today and make you less dependent on power from your power company. We can all agree that the cost of power has increased over time and will continue to increase in the future. When you produce your own power, you protect yourself from these coming power rate increases. It may be easier to think about the cost of producing your own power with an automotive fuel cost analogy – if someone offered you a prepaid gas card that locked you into a $2 dollars per gallon rate of gasoline for the rest of your life would you take it? Definitely, because we all know that the cost of gas has increased over time and will continue to increase in the future.
The cost of a solar energy system can be looked at in the same light – you are locking yourself into a lower power rate today by producing your own energy and protecting yourself from the coming power rate increases. The more power you produce on your own is the same as requiring less power from your utility company. And when the cost of power goes up, the value of the power that your solar energy system generates increases as well.
Incentives – In Simplified Terms
To understand the solar incentives, tax credits, rebates, and grants available to you in your area please visit the web site www.dsireusa.org. This site highlights solar incentives for all states where we have Solar Wise USA solar installers and more.
Certain states, like North Carolina, give a 35% tax credit against the total cost of the system. The Federal government gives a 30% tax credit to the total cost of a system. Local utility companies are mandated to buy back the production created by the solar system through net metering. This happens through a Distributed Generation Service Agreement. A typical payback period for a residential solar energy system is around 7 years but could be less depending on the cost you pay for power and whether or not your power company offers a solar rebate for installing solar panels on your home. In a commercial solar purchase scenario you have the same 30% federal tax credit, the same 35% state tax credit in North Carolina, and you also have an added depreciation incentive which brings the total solar energy cost savings from incentives to 90% or more. A typical payback period for a commercial solar energy system is 4 years or less. Most power companies have additional incentives to help reclaim some of the systems initial cost.
Most solar energy systems are warranted for 10 to 15 years, sometimes 25 years when they are purchased from a high quality solar company, with an expected lifetime of 40 to 50 years. So the overall cost of a solar energy system is very minimal when you figure the system will quickly pay for itself and continue to save you more and more money in the future as the cost of power continues to increase.
The Cost Of Not Using Solar
For example, if your average home power bill is $150 dollars per month, you’ll spend $1,800 dollars each year on power, and a whopping $18,000 dollars for power over the next 10 years! Wowzers! These figures do not include any annual power rate hikes, so you’ll actually pay more than that over time.
Solar Powered Cars
We also encourage anyone researching a solar energy purchase to look into electric vehicles (EVs). Solar and EVs have a harmonious relationship – In addition to powering your home, solar panels can provide ‘solar fuel’ to an electric car. Imagine how much money you could save by replacing your home energy costs and your transportation costs with FREE solar power?! For more on this topic please visit our Solar & Electric Vehicles page.
We can help explain how all of this would apply to your purchase. To request an online solar estimate or to request a free in-home solar consultation, please contact us using the form at the top right and specify the type solar interaction you would like. Please have 12 months worth of power bill data handy so that we can get a holistic picture of your yearly energy usage.