The Advantages of Solar Panels for Your Home
Solar panels are popping up everywhere--from the suburban roofs of my home, Dallas, Texas, to the academic buildings of my Boston-area college campus. Solar panels, which seemed to have found their start on commercial buildings and ultra-sustainable buildings, are now finding their place on the roof of your average American home. And your home could easily be the next!
Solar panels consist of photovoltaic (PV) cells, which absorb photons of light from the sun and then convert those photons into electrons. These electrons create an electric current, which becomes electricity that can be used to power something as small as a hand-held calculator to something as big as your home. This process depends entirely on the sun’s rays, which are both free and plentiful. (Of course, this also depends on where you live. Certain states, like Arizona and California, average more hours of sun per day.1) More people are turning to installing solar panels on their roofs, not only because solar panels reduce your reliance on nonrenewable fossil fuels, but also because, in the long-run, solar panels have the potential to save a notable amount of money for the average American homeowner.
One of the common concerns about installing solar panels on a home is: How much will this cost me? Solar panels are pricey to install, but with the hefty long-term pay-off and federal and local incentives, solar panels are more affordable than many anticipate. The cost of solar panels varies by geographical location and climate, house structure, and local regulations, but they have an average life expectancy of around 20 years.
According to the U.S. Energy Information Administration, in 2016, the average annual electricity consumption for a residential household was 10,776 kilowatt-hours (kWh). If you break that down into months, the average electricity consumption per month is 897 kWh. Since the average cost per kilowatt-hour in the US is approximately 12 cents[1], that means the average monthly electricity bill is $107.64. In a year, that is a total of $1,291.68 spent on your average American homeowner’s electricity bill.
The next cost to calculate is, how much will it cost to retrofit my home with solar panels? The average solar panel equipped household has around 5 kW worth of panels, and the cost for installation is approximately $15,700.[2] However, homeowners can receive a 30% federal tax credit for residential solar panel installation until December 31st, 2019. (This tax credit will drop to 26% in 2020, and 22% in 2021 until it ends on December 31st, 2021.[1]) All in all, this brings down the average price of a 5 kW solar panel system from $15,700 to $10,990. Depending on where you live, you may also be eligible for state or local tax credits for solar panel installation; you can find these incentives at dsireusa.org. Even with a lowered price, this initial payment is still a hefty sum. While it’s more financially beneficial to immediately pay the full sum, there are banks that offer “solar loans”, which can help make your dream solar-paneled home a more financially feasible option. In addition, if you harvest more energy than you use, some cities will buy and use your excess energy, further driving down your total costs.
Now onto the part that most excites those interested in solar panels: How much money can I save in the long-term by installing solar panels? While most consumers want to install as many solar panels as necessary in order to cover the full cost of their electricity bill, that’s not always possible. Factors such as rooftop square footage, the amount of sunlight in your geographic area, the orientation of your roof, and the efficiency of your solar panels, can affect the amount of energy you can harvest. Many consumers are not able to fully offset their electrical bill, but can instead decrease their total monthly costs and invest in appliances that lower their total electricity usage.
Source :Energy Sage, “How Much Do Solar Panels Cost in the U.S. in 2018?”
Going back to the idea that the average residential solar panel system consists of 5 kW worth of panels, this system generates around 7,161 kWh per year.[3] Compared to the average household energy consumption of 10,776 kWh, a 5 kW solar panel system would cover around 66% of your energy needs. This would also lower the average spent on electricity from $1,291.68 a year to $433.32 a year. This pans out to $858.36 worth of savings a year and $71.53 a month. At this rate, you would break even with the initial installation cost in a little less than 13 years, and this is assuming that you’re using standard efficiency solar panels and have a consistent electricity bill each month. If your system lasts for another 7 years, then that’s an additional $6,008.52 of money saved. If you were to invest in a higher efficiency solar panel than the standard 250 watts[3], install enough solar panels to fully cover your electricity usage, or notably decrease your total electricity usage, you would be able to achieve an even higher amount of savings and break even in about 7 years, which is the average time it takes for a US household to recover their expenses on a solar energy system.[2]
Technology continues to improve at a rapid pace, and solar panels are no exclusion. Just four years ago in 2014, the average price per watt of solar panel was $3.86. In 2017, that price dropped to $3.13.2 That’s a 20% price decrease in solar panels in the span of just three years, and this is a trend that promises to continue. In addition, in 2016, the number of US solar installations nearly doubled when compared to the previous year, furthering the fact that residential solar energy is on the rise.[4]
However, even though solar panel installations may be reaching new highs, there is still a major need for awareness. Just having regular solar panels installed on your rooftop is a conversation starter, especially since they are quite noticeable. For those who feel that the obviousness of solar panels is a deal breaker, let them know that solar panel technology is innovated upon each year! “Solar shingles”, which are small, flexible solar panels made to look like normal roof shingles, are coming into market. While they aren’t as efficient or as cheap as standard solar panels, further innovation will allow them to appeal to a larger market.[5] Additionally, some solar panel installation companies will give you a discount if multiple houses in your neighborhood decide to install solar panels at the same time. This is a great chance to chat with your neighbors, explain the financial perks of installing solar panels, and save a little bit more money!
From helping you save on your electricity bill to even increasing the property value of your home6, the installation of residential solar panels is on the rise. In a world where it’s becoming increasingly clear that we have a very finite amount of resources available, solar energy is an innovation that combines both financial and environmental benefits, leading to an efficient product that empowers its consumers. Consider joining the solar panel movement, which promises to be more than just a trend, and simultaneously lower your carbon footprint and increase your long-term savings!