he world is heading towards an energy crisis. Most of the global energy comes from burning fossil fuels which emit greenhouse gases into the atmosphere, trapping extra heat and warming the earth every day.
Solar energy is the perfect solution to the pollution issue. According to the Solar Energy Industries Association (SEIA), one gigawatt-hour of solar generation can prevent the creation of 690 metric tons of greenhouse gas emissions. Solar energy is sustainable and eco-friendly, and solar panels are a great way to use solar energy to power your home.
This article will cover why you should or shouldn't consider solar panels for your home.
What Are Solar Panels?
Solar panels are devices that convert sunlight into electricity. These panels are covered with photovoltaic (PV) cells, which absorb sunlight. These cells are made of silicon and convert solar energy into Direct Current (DC). Next, the solar inverter converts this DC electricity into Alternating Current (AC), which most of our electrical appliances use.
Pros Of Solar Panels
While the world is heading toward an energy crisis, switching to renewable and green energy is the most viable option. Unlike fossil fuels, which are expected to be exhausted in the coming decades, solar energy is a perpetual resource. It is there until the sun stops shining. Even your grandchildren will be able to use solar energy without compromise.
Solar energy is green as it does not release any carbon emissions when generating electricity. Unlike fossil fuels, the process does not use drilling, blasting, burning, or other procedures that produce harmful emissions to the environment. Thus, solar power is clean and green energy that does not impact the environment.
Saves You Money
Solar panels may help you save money on your electricity bill or eliminate it. Though solar panels have a high upfront cost, owners will break even in six to ten years due to a significant drop in utility bills. It's a one-time investment that pays off in the long run. Apart from this, various subsidies, low taxes, and long-term financing make solar panels cheaper and better long-term investments.
Long-Term Investment Not Expense
Installing solar panels is more of an investment than an expense. The initial setup cost is expensive but will offset long-term utility bills. Apart from this, you can also sell solar energy generated from solar panels to the local electric company, which will pay you for it.
Solar panels are low-maintenance and long-lasting since they don't get a lot of wear and tear. The only maintenance issue with solar panels is the need to clean debris that may be blocking the PV cells from direct sunlight contact.
Cons Of Solar Panels
High Initial Setup Cost
Having a high initial setup cost is the major con of solar panels. The average solar panel system costs $15,000. Also, the solar panel system requires solar panels, installation costs, and a solar battery. The prices generally depend on the models of the solar panel system ranging from $3,500 to $35,000.
Long Payback Period
Solar panels have a high initial setup cost and their payback period is longer. Various factors determine the payback period for solar panels, including the cost of electricity in your area, incentives you receive, how much electricity it generates, and how much your system costs. The average solar payback period is estimated to be eight years.
Location and Weather Dependent
Solar panels are highly dependent on sunlight for energy generation. Thus, production depends on how much sunlight the house receives. Due to solar panels' reliance on direct sunlight, solar may not be a viable option for places that receive less sunlight. Apart from this, there is no assurance that solar panels will be enough to power the entire house, and you may have to rely on electricity partially.
Difficult To Install
Installing a solar panel is difficult as there are a lot of factors to take into consideration. You will need a solar installation specialist or contractor to install the panels. Additionally, you should install panels where your house receives abundant sunlight. You may also be required to get local permits and connect your system with the energy grid to sell off any extra power. It would help if you joined the solar panels to a battery to store the solar energy for later use.
Are Solar Panels Worth The Investment?
Solar panels have high upfront costs and a long payback period which may raise the question of whether solar panels are worth the investment. Solar panels are a worthy investment if you look for environmental needs. Financial worthiness depends on several factors, including location, energy consumption, electricity cost, etc. You can evaluate if the investment is financially worth it based on the payback period and Return On Investment (ROI).
Solar Payback Period
The payback period is the time taken to recover the initial cost of the solar panels. Solar panels installation and setup costs are expensive, but the benefits of installing them are much more extensive. You can calculate the payback period of solar panels using the following formula :
Gross cost - Incentives = Total cost
Total cost ÷ Annual savings = Payback period
Gross cost is the total cost to install the system, including equipment, shipping, permit, installation charge, etc. Incentives can be anything, including tax subsidies or local incentives. For instance, the cost of installing the solar panel system is $30,000, and you get the incentive of $5,000. Your total cost would be $25,000. Now, suppose with the solar panels, you saved $2500 annually on your electricity bills. So, your payback period will be ten years.
Solar Return On Investment (ROI)
The average ROI for solar panels in the US is estimated to be 10%. But, it depends on several factors, including your location, installation costs, make and model. You can use a solar ROI calculator to get a rough estimation of the ROI of solar panels to determine if it is worth the investment.
Factors Affecting Solar ROI
Solar panels have high installation costs and take a significant portion of your project cost. The average installation cost for the solar panel system ranges from $3,500 to $35,000, depending on the type and model. On top of that, the installation charge is high as well. The rates differ according to the local contractors but charge around 75 cents to $1/ watt to install the equipment. You can save money by self-installing the system.
The government is looking to switch to green energy and provides lucrative incentives to install solar panels. The Federal government is offering a 26% tax credit off the entire cost of the system. Additionally, local incentives might be available that further reduce the solar installation cost. These incentives help to reduce the overall cost of the system.
Fees and Permit
You would need specific fees and a permit to install the solar system, and the prices vary by location but typically are less than $1000. You must contact your local Authority Having Jurisdiction (AHJ) to start the permitting process. The AHJ is responsible for providing the permit for installing the solar system. You can visit your city hall or planning department to get started.
Maintenance and Replacement
A solar panel system typically has low maintenance costs, but you would need to clean debris frequently. Apart from this, solar panels are durable and last for 25 years. But, solar inverters typically have a warranty of 10-15 years, so you have to replace the inverters once over the solar panel system's lifetime. Thus, it would be best to consider the replacement cost while factoring in the solar panel ROI calculation.
Leasing and Financing
While it is not recommended to lease the solar panel system as it has high lifetime costs due to the compounding interest built into the structure. It also prevents you from getting the subsidies you would otherwise be eligible for. Thus, it's better to finance solar panels. Banks offer better lending rates, and you can gain incentives.
The cost of electricity varies depending on your location. The average price of electricity cost ranges from 14.77 cents per Kilowatt-hour. If the electricity cost is expensive, your ROI for the solar panels will be higher since you will save the electricity expenses.
Sun exposure also plays a significant role in the ROI of solar panels. The solar system generates more electricity if exposed to full sunlight and for a longer period. The location plays an essential role as the areas have different sun exposure—the higher the sun exposure, the higher the production and, thus, a quicker payback period. Solar panels in Arizona or Southern California have more prolonged sun exposure and enjoy maximum daily production over those built in Michigan or Alaska.
Though the solar panels can last up to 25-30 years, the panels slowly lose performance over time at the rate of 0.5% to 1% per year. However, solar panels are guaranteed to produce at least 80% of their initial output after 25 years. This means if the panel is 200 watts today, it will have 160 watts after 25 years. Panel degradation should be a consideration when calculating the ROI for a solar panel system, as the panel production will be lower as the year goes by.
Best Solar Panel Installation Companies
ADT Solar is one of the largest solar installers in the USA. It offers several solar equipment options, including solar panels, battery backups, and microinverters. Notably, it provides monocrystalline solar panels and Enphase Energy microinverters. It also lets you customize your system with your choice of solar battery. Additionally, ADT Solar offers installation services and guides the homeowner throughout the installation process. It has top-notch customer service and quality service.
Solo is a service-first company that aims to eliminate your electric utility costs with solar and energy storage solutions. It offers the right solar panels tailored to your needs, environment, and budget.
Better Tomorrow Solar
Better Tomorrow provides affordable solar panel installation and solar battery storage solution services. It aims to make solar power accessible to everyone by removing the upfront cost to ensure long-term energy price predictability for the customers. It offers to provide clients with solar panel installations tailor-fitted to each individual's unique lifestyle, schedule, and budget.
Lumio is a full-stack solar energy provider as it handles everything from design and installation to the utility connection, quality control, customer service, and a 25-year warranty. It offers faster installation through the local presence. The installation can be done in a day. Also, it provides a customized design to meet your solar needs.
Sunrun is a comprehensive solar installer best known for solar leases. It provides the design and installation of custom solar solutions, backup battery storage, home energy monitoring, and energy control during outages. Mainly, Sunrun offers solar equipment from SolarEdge, LONGi, and Costco. In addition, it provides several solar financing options to its customers.
Solar panels are the best way to power a house as they are both environmentally and budget-friendly. While the high upfront cost of solar panels is expensive, it pays itself back in the long term by offsetting utility bills. The cost of a new solar panel system has declined since last year due to higher government subsidies and the government's efforts to go green. Thus, solar panels are a budget and eco-friendly way to power a home.