As the world’s population grows, there is a stronger need for renewable energy sources and clean energy than ever before. One such energy source is solar, or the power we generate from the sun. Solar power is created through a process known as the photovoltaic effect, where the sun’s rays create energy to be converted into electricity to power almost any device we use on a daily basis. To capture this energy, you need a solar power system, which includes panels and other components. This guide will dive into the costs of solar and the benefits on your energy savings.
1. How does solar work?
Solar panels are made up of many smaller units called photovoltaic cells, which when linked together by the hundreds, comprise an entire panel. When the sun hits a solar panel, the light allows in photons, or particles of light, to loosen electrons free from atoms. This then generates a flow of electricity, which flows to the edge of the panel and into a conductive wire. Then, the conductive wire transfers the electricity to the inverter, transforms it from DC electricity to AC, and then is used to power our homes, offices and buildings.
2. How much does solar cost?
So how much does solar cost to install and maintain? Well, it will depend on what kind of system you’re getting, if you have access to your utility grid and what your primary energy savings goals are. Luckily, due to technological advancements in the past decade, solar is far cheaper to implement than it used to be. Depending on the provider you use, the cost of solar panel installation will vary. Or, you can buy equipment from a wholesaler and install it yourself or contract a local worker to help. This may cost you about $6000-7000, versus doubling that amount for a turnkey solution installation.
3. Is it worth it?
Solar is usually a strong investment that will pay off for years to come. There are great financial incentives, like the federal solar tax credit. This federal tax benefit is nonrefundable, so you won’t get the savings in the form of a refund, but you will reduce the amount you owe on your taxes. In addition, the money you save on your energy bill can really compound. With solar, you’re likely to justify the cost of the system by earning more money over the life of the system itself (not to mention, helping the environment). To get a general idea of your solar ROI, run this calculation:
- Start with your estimated system price, given by a contractor or provider.
- Divide that price by the cost of electricity from your local utility company. While the national average is $0.13 per watt, electricity rates for a given location can fluctuate based on a lot of factors.
- Divide the result by your annual electricity usage in kilowatt hours. Then multiply your monthly usage by 12 to get a rough estimate of your yearly usage.
