The Real Cost of Solar Panels: Will An Investment in Renewable Energy Pay Off?
There are two common reasons most homeowners and businesses invest in solar panels. One is the altruistic motive of helping the environment. The other is less selfless but more practical. It is a desire to save money. These aren’t the only reasons people install solar systems, but they rank high on the list.
It’s easy to find discussion on the impact we have on the planet and how renewable energy sources can help. What about the financial side of the equation?
How Much Does Solar Panel Installation Cost?
When a homeowner begins to research solar panels, installation cost is one of the first things they will want to know. They will have to pay a lump sum up front to get the benefit of using a system for years to come.
The good news is that the cost of a new system has dropped significantly over the past decade. What once cost tens of thousands of dollars can be done for far less. There is no one-size-fits-all estimate when it comes to installation. Each property will have a different set of needs and obstacles to work around.
One thing to keep in mind is that the bigger the system, the higher the cost. A larger system will generate more power but will be pricier to install. The best approach is to figure out how much energy your household or business consumes and finding a system that can handle it. A professional can provide recommendations, so you keep the initial investment down while still getting maximum benefit over years of use.
The average national solar panel cost in 2019 is around $3.05 per watt. The average system in the U.S. is 6 kilowatts, which puts the cost of installation at approximately $12,810 after applicable tax credits. That’s a 2% drop in price from last year. Per-watt pricing can range from $2.67 to $3.43. Based on average system size, installation usually comes to between $11,214 and $14,406. It is important to speak to a solar panel installer to get an exact quote for your job.
Do Solar Panels Pay Off In the End?
Researchers have been paying attention to the solar panel industry. Studies have been conducted to determine if they produce enough energy to make them worth the financial investment. Previous results found that solar panels produced 9 times the amount of energy invested in them.
A recent study published in the Royal Society of Chemistry’s journal Sustainable Energy & Fuels discussed output from rooftop systems in five diverse U.S. states. The energy payout ranged from as low as 14 in Alaska to 27 in Arizona when the homeowner was able to feed surplus power back to the grid. They also looked at the effects of installing a home battery but found that the solar panels alone provided a better return on investment.
Solar Panels Help Schools Lower Operating Costs
The financial appeal of solar panels has caught on. Many businesses and organizations are adopting the technology. That includes educational institutions like the Sacred Heart School in Missouri. The school’s leadership broke ground on the project on April 5th, 2019. It will include a 100-kilowatt solar panel array canopy with a 30-year warranty. After months of research, the school concluded that the update would save as much as $15,000 each year in utility expenses. They anticipate those savings to increase as utility rates go up annually. The project was funded through private donations and grants.
“This is truly a gift that will pay dividends for generations to come,” said Sacred Heart School administrator Dr. Mark Register, “The fact that a project of this magnitude can become reality completely through grants and private donations is awe inspiring. Sacred Heart works because so many people continue to come together as a community to make it so.”
To maximize available space on the campus, the solar panel array will be installed as a canopy over a portion of the parking lot. The position will maximize sun exposure without taking up valuable space. Construction is expected to continue through May.
Homeowners Are Drawn to Solar Savings and Sustainability
Schools aren’t the only ones who see the value in solar power. Johnson County, Iowa residents have committed to installing over 350 kilowatts of solar panels to their homes. It’s all part of the Solarize Johnson County program. Through this exciting initiative, residents can pool their buying power to purchase solar systems with significant discounts.
The program included four benchmarks set at 50, 150, 250, and 350 kilowatts. Each time one was reached, the bigger the discount would be for those who participate. The community was able to secure the fourth and final discount. They will save between around $1,200 and $1,400 per household solar array.
MOXIE has reached out to the 200 families who will be moving forward with installations. “A lot of people will wait and see how the momentum builds,” explained MOXIE business developer Chris Hoffman. “But I think they’ll be excited to see these results.”
Solar Panels Turn Unusable Space Into A Renewable Energy Source
As has been proven through rooftop installations and those positioned over existing features like parking lots, solar panels are adaptable and can turn almost any space into an energy source. That’s what electric car maker Tesla is doing at a landfill in Frederick County, Maryland. After several years spent obtaining permits from state and county officials, the project is moving forward.
According to special administrative director Mike Marschner, the panels will be used to cap the closed landfill with a total of 7,776 photovoltaic modules producing 3,669,961 kilowatt hours in the first year. That equals enough energy to power approximately 10 county buildings or 20% of the county’s general buildings’ electricity needs. The 20-year agreement will replace other energy sources, like coal and steam.
A virtual net metering system will be routed off the site through FirstEnergy Corp.-owned Potomac Edison. This will allow the county to earn solar credits for any excess power that’s generated.
According to County Executive Jan Gardner (D), placing the solar system on a closed landfill cell is a good idea. She stated that “It’s a good location because that land can’t really be used for anything else. And we have to monitor that closed landfill cell in perpetuity.”
Solar Panel Installations On the Rise
Lower installation costs and government incentives have pushed more people to invest in solar panels. According to the Solar Energy Industries Association, annual solar installation has increased by more than 1,600% since the Investment Tax Credit (ITC) was enacted back in 2006. The ITC provides a 30% tax credit for eligible residential and commercial installations.
Even more people are taking advantage of the savings, which are scheduled to begin to phase-out. This is the final year to receive the full 30% credit. The ITC will drop to 26% starting in 2020 and again to 22% in 2021. It will go away completely in 2022.
If you want to get the most value for the lowest cost, now is the time to install your solar panel system. This is the last year to receive the full value of the ITC. If you have questions about your potential long-term savings, speak to one of our experts at MOXIE. One of our solar professionals can review your energy consumption and determine how much money solar panels can save your household or business.