There are many benefits to switching to solar, including reducing your carbon footprint and saving on expensive energy bills. However, the initial cost of installing solar panels is still relatively high.
While solar energy costs dropped 80% between 2010 and 2019, experts predict a 25% drop in industry growth in 2022 due to recent supply chain issues and rising material prices.
However, solar energy can still be worth the investment. If you are interested in installing solar panels, you may be wondering how much it will cost. Here are five factors that can affect installation cost. solar panels in your home or business.
5 cost factors for investing in solar energy
Before installing solar panels, you should evaluate some solar energy pricing elements that can vary costs considerably. This article should help you decide if investing in solar energy is right for you.
1. Panel size and quantity
The average American family uses approximately 11,000 kWh per year of electricity. That number equates to needing 26 to 33 solar panels to power the entire house. While a family of four may only need one solar panel to generate enough power for a water heater, the size and number of solar panels is often determined by other considerations as well.
The best way to understand your solar needs is to consult a solar installer. An installer can calculate how many solar panels you need based on the following:
- What you paid for your past utility bills
- The amount of sunlight your home or business receives
- Accurate measurements and satellite imagery of your roof
An installer can use this information to recommend the correct size and number of solar panels to meet your energy needs.
2. Types of Solar Panels and Equipment
There are three types of solar panels: monocrystalline, polycrystalline and thin film. Each of the three types of solar panels has its advantages and disadvantages, but two are the most commonly installed in homes: monocrystalline and polycrystalline.
Monocrystalline panels typically have the highest energy efficiency at 20%, while polycrystalline panels have an energy efficiency of around 15-17%. Due to the energy capacity of monocrystalline panels, they tend to help you save more in the long run and are more expensive to install.
Additional equipment you may need to purchase includes power inverters, electrical wiring, charge controllers, mounts, and solar batteries.
When considering the costs of installing solar panels, it is essential to assess the geographic location of the home or business. Not all regions receive the same solar radiation or the same amount of sunlight.
It’s no surprise that solar power tends to be more profitable in the sunniest parts of the country. For example, California and Arizona probably have more hours of sunshine per year than Connecticut. It is also important to consider that your panels will produce more energy in summer than in winter.
The direction of your home or business and the shade from dense tree cover can also affect the amount of sun exposure your solar panels will have.
The state and federal governments have implemented various incentive programs to encourage homeowners to invest in solar energy. The federal government currently offers a 26% solar tax credit called the Investment Tax Credit (ITC) for solar panels installed between 2020 and 2022. It is expected to decrease to 23% in 2023 and could expire unless renewed in 2024
Even if you live in colder climates like Pennsylvania, solar energy can be a much more reliable source of energy than electricity, particularly in terms of savings. Since solar energy comes from sunlight, things like resource demand, natural disasters, and regulations don’t take into account the unpredictable rise in electricity costs.
Other solar initiatives, such as GRID Alternatives Mid-Atlantic, provide free solar panel installations to low-income families. The GRID aims to help bridge the economic gap and drive the transition to renewable energy resources. The average family spent around $115 a month on electricity bills in 2019, which translates to around $1,380 a year. With the cost of public services rising, programs like GRID offer low-income families an opportunity to save.
5. Installation Fees and Additional Costs
In the United States, the average cost of installing solar panels is about $25,000 before federal tax breaks and incentives. However, installation fees can vary depending on the state you live in, the types of panels you use, and the size of the system you plan to install.
Keep in mind that solar panels are only a fraction of the cost, with equipment, operating costs and labor making up the rest of the price.
Other factors related to solar installation costs include whether solar panels are available where you live, your current utility bill, shipping costs, and supply chain issues.
Solar: a worthwhile investment
While the initial installation costs are high, the long-term savings of installing solar panels are attractive. If you plan on living in your home for a long time and are interested in saving significantly on your energy bills, solar energy could be an investment worth considering.
By Jane Marsh. Article in English