Solar Panel Installation Cost Guide
We put together a comprehensive solar installation cost guide that discusses all the costs related to installing solar panels.
The sun has been around for more than 4.5 billion years, but we humans have only learnt to harness its PV power for the last 200 years or so (SolarPowerAuthority.com). In fact, solar PV has only been used practically since 1956. Solar power is very clean as it produces zero emissions. It is also renewable, unlimited, reliable, and sustainable without causing any adverse effect on the environment, apart from the manufacturing process and disposal of used components. When using solar, there is no risk of oil spills, smoke and carbon emission, toxic fumes, and so forth. Imagine a world in which you harness free energy without limitations or possibility of misusing it!
The sunniest states in America are Arizona and California, and California leads is adoption of solar PV energy in America, while Las Vegas runs completely on renewable energy. A household contributes nearly 500 tons of carbon in the atmosphere each year, and solar PV could reduce this by at least 100 tons. Solar PV panels are absolutely quiet, and they are mostly mounted on an otherwise unused rooftop. No floor or ground footprint is sacrificed for the installation. The solar industry employs a quarter million people in America. However, despite being the world greatest per capita consumer of energy, the U.S. trails China, Germany, France, Australia, and India in solar adoption.
How Much Do Solar Panels Cost?
Most estimates use cost per watt to determine the cost of installing a solar panel. To install one watt of solar power costs anywhere from $2.90 to $8.90 according to different estimates. Panels come in different capacities but you can combine several panels to give more wattage. The average American home requires about 5 kW, which costs between $15,000 and $35,000. However, the Federal and State governments give incentives like rebates and tax credits to encourage going solar. Some utility companies also give incentives like subsidies and net metering at retail rates. All incentives benefit homeowners and make solar energy installation more affordable. Solar power also reduces pressure on overloaded grid systems.
Quick Cost Guide of a 5 kW Solar Installation
| MATERIAL | COST |
|---|---|
| 5 kW Solar PV Panels | $4,200- $7,200 |
| Deep Cycle Battery | $750 - $5,500 |
| Charge Controller | $465 - $980 |
| Inverter | $1,000- $7,500 |
| PV Meter (analogue) | $55 |
| Battery Monitor | $165- $575 |
| Solar Rack Mount | $15 - $110 |
| Certification | $120 |
| Installation | $5,000 |
| Incentives | 30 percent |
| Tax Credit | 30 percent |
Cost of Solar Panel
On average the net price of a 5 kW solar PV system starts from $12,000 after deducting the incentives. The 5 kW capacity is the trendiest system in American homes. Others popular systems are the 6 kW system costing $13,300 net, 8 kW system costing $17,700 net, and the 10 kW system costing $22,100 net (EnergySage.com). The comparative cost between states is sampled below;
| STATE | PRICE 6 KW | PRICE 10 KW |
|---|---|---|
| Florida | $10,800 – $15,200 | $18,100 – $25,300 |
| Arizona | $10,900- $16,300 | $18,100- $27,100 |
| Texas | $11,800 – $15,300 | $19,700 – $25,600 |
| Ohio | $11,900 – $16,000 | $19,900 – $26,600 |
| Pennsylvania | $12,400 – $16,600 | $20,600 – $27,700 |
| Maryland | $12,600 – $15,500 | $21,000 – $25,800 |
| New Jersey | $12,700 – $13,400 | $21,200 – $27,300 |
| Colorado | $12,800- $16,500 | $21,400- $27,500 |
| North Carolina | $12,900 – $16,300 | $21,400 – $27,100 |
| Virginia | $13,100 – $17,400 | $21,900 – $29,000 |
| Oregon | $13,200 – $17,000 | $22,000 – $28,300 |
| Illinois | $13,200 – $17,200 | $21,900 – $28,700 |
| South Carolina | $13,300 – $16,200 | $22,100 – $27,000 |
| New York | $13,500 – $19,200 | $22,400 – $32,000 |
| California | $13,700- $17,500 | $22,800- $28,200 |
| Connecticut | $14,100 – $18,400 | $23,500 – $30,700 |
| New Hampshire | $14,500 – $17,500 | $24,200 – $29,200 |
| Massachusetts | $14,500 – $18,600 | $24,200 – $31,000 |
| Rhode Island | $14,500 – $18,100 | $24,200 – $30,200 |
| Washington | $15,100 – $19,700 | $25,100 – $32,800 |
Solar panels come in different physical sizes, capacities, durability, and efficiency – factors which affect the final price of each panel. It is also cheaper by around 7 to 10 percent to buy in bulk according to solar-estimate.org.
| Solar Panel Model | Watts per Panel | Number of Panels | Watts | Price Per Panel | Total Price | Price per Watt |
|---|---|---|---|---|---|---|
| Astronergy ASM6610P | 260?W | General | 5,720 W | $210 | $4,180 | $0.81 |
| Astronergy CHSM6612P | 325?W | General | 8,775 W | $263 | $6,600 | $0.75 |
| Solarland SLP190S | 190?W | General | 6,080 W | $250 | $7,200 | $1.18 |
The latest solar PV panel pricing of 2017 indicates a downward price trend even though prices vary significantly between states, as sampled below.
Cost of Inverter
A solar PV system needs an inverter to change the solar output into the household power, that is, from the solar 48 VDC to the grid 120 / 240 VAC.
| Inverter Model | AC Output Voltage | Max. Output | Price |
|---|---|---|---|
| Magnum Energy | 120V / 240V | 4.4 kW | $2,255 |
| SMA Sunny TriPower CORE1 | 480V | 5 kW | $7,475 |
| Schneider Conext | 120V / 240V | 5.5 kW | $3,850 |
| SolarEdge HD-Wave | 240V | 5 kW | $1,295 |
| SolarEdge US-U | 240V | 6 kW | $1,295 |
| SolarEdge | 240V | 3 kW | $1,115 |
Cost of Battery Bank
The battery bank is a power store that is connected when there is a grid outage. It is often portable.
| Battery Backup/Bank Model | Number of Batteries | DC Input Voltage | AC Output | Price |
|---|---|---|---|---|
| Four Star Solar Rolling Thunder RT-2000 Backup | General | 24V | 6 kW | $4,550 |
| Four Star Solar Backup Power | General | 24V | 5.3 kW | $5,512 |
| Crown AGM 220 Ah 24 VDC | General | 24V | 5.3 kW | $1,022 |
| Crown AGM 440 Ah 12 VDC | General | 12V | 5.3 kW | $1,056 |
| Fullriver AGM 415 Ah 12 VDC | General | 12V | 5.0 kW | $1,004 |
| Crown 430 AH 12VDC | General | 12V | 5.2 kW | $744 |
Cost of Charge Controller
This is a transistor gadget that protects the solar and grid power systems from overload or over charge.
| Charge Controller Model | Output Range | Price |
|---|---|---|
| MidNite Solar Classic 250 with MPPT | 55A/48V to 60A/12V | $735 |
| MidNite Solar Classic 150 with MPPT | 86A/48V to 96A/12V | $575 |
| MidNite Solar Classic 200 with MPPT | 72A/72V to 79A/12V | $590 |
| Magnum Energy PT-100 | 100A | $980 |
| Outback Power FlexMax FM80 with MPPT | 80A | $530 |
| Outback Power FlexMax FM60 | 60A | $465 |
Cost of Meter
This is a measuring instrument for power usage or production. It can measure solar energy output, back-up battery output and so forth.
| Meter Model | Type | Description | Voltage | Price |
|---|---|---|---|---|
| General Electric AC Watt Hour Meter | analogue | EZ-Read Cyclometer | 240 VAC | $55 |
Cost of Solar Rack
The solar rack is used to fix the panels on the roof. They can lie paralle t the roof, or be designed at a tangent from the roof.
| Rack Model | Mount/ Application | Price |
|---|---|---|
| Solarland SLB-0112 | Side of pole/Flat mount | $29 |
| Solarland SLB-0113 | Side of pole/Flat mount | $65 |
| Solarland SLB-0114 | Side of pole or Flat mount, Quick Mount | $110 |
| Solarland RV Mount | RV mount | $14.29 |
| Solarland SLBRKT-13 | Marine Mount Kit | $86.64 |
| Solarland SLBRKT-08 | Marine Mount Kit | $47.13 |
Cost of Battery Monitoring Kit
This is a gadget and app that measure and report the status and level of electricity between the solar PV and the grid power. Magnum Energy is a popular supplier of battery monitoring kits.
| Battery monitoring Kit Model | Description | Price |
|---|---|---|
| Magnum Energy ME-BMK | Shunt | $175 |
| Magnum Energy ME-BMK Kit | No shunt | $170 |
| Magnum Energy ME-MW-W MagWeb | Wireless monitoring | $560 |
National Cost of Solar Panels
In 2017 most homeowners paid between $2.87 and $3.85 per watt for a 5 kWh solar PV system, which was almost 10 percent lower than in 2016. The cost after tax incentives and rebates came down from a total of $16,800 to $10,000 according to EnergySage Market Place. These are the latest figures (August 2017) of the cost of 5 kW solar PV panels by state, as compiled by Solar-Estimate.org. They compare the total cost of acquiring and installing the solar PV system through self-financing, alternative financing, and PPA/leasing.
Solar Companies
SolarAmerica.com lists more than 1500 solar panel manufacturers across the United States, but most of the companies have only a local presence or are found in a few states. According to Solar Power Authority, the five largest solar companies take a market share of 54 percent. SolarCity is the dominant solar company with a presence in 21 states and a market share of 34 percent. Vivint Solar comes second with a share of 13 percent, Sungevity a distant third with a share of 3 percent, Sunrun fourth with a share of 2 and found in 15 states, percent, and Verengo Solar with a share of 2 percent. Other significant players are Xoom Solar, SunPower, and NRG. Some the benefits from solar PV companies are as tabled below:
| Company | Started | Features | Footprint |
|---|---|---|---|
| Sunrun | General | Pro Installation, Solar PPA, Financing, Lease- Purchase, 0% Down Payment, 20% Saving on Bills | 15 States |
| NRG | Pro Installation, Lease-Purchase, Engineering, Remote System Monitoring, Maintenance, Permits | 17 States | |
| Vivint Solar | General | Pro Installation, Solar PPA, Financing, Automation, Leasing, 10-30% Saving on Bills | 12 States |
| XOOM | Pro Installation, Solar PPA, Financing, Lease-Purchase | 12 States | |
| SunPower | General | Pro Installation, Financing, Lease-Purchase, Monitoring App, 55% more energy output |
Components of a Solar PV System
A solar PV system requires four components, namely, the solar PV panels to capture the sunlight, a charge controller to protect or regulate the flow of electricity, an inverter to convert from a low-voltage DC to 120 VAC, and outlets to tap the solar power from (if different from the grid power). Additionally you could have a battery to store power, a monitoring system to track energy usage, and a net meter to reverse the meter reading when you feed power into the grid.
Solar Panels
The solar panels harness the sun’s UV energy and convert it to electricity. Basically, solar panels are rectangular shaped, with a positive and negative wire outlet for connecting to the next panel or inverter. The solar panel is a larger unit formed by joining photovoltaic (PV) modules. The joining involves physically attaching modules to each other and by connecting the wiring. On its part, a module is made up of photovoltaic cells, each cell being a collector with a positive and negative pole. The PV cell is a semiconducting monocrystalline silicon coated with cadmium oxide on the bottom side and made of glass at the top. A crystalline silicon is more conductive and expensive than a monocrystalline silicon, which in turn is more conductive and expensive than a polycrystalline silicon.
The basic units of the solar panel are the solar cells which are made of silicon and photo sensitive material that reacts with chemical reaction between photons and electrons. The reaction produces electricity. The cells are made of silicon. Since the U.S. and Europe are in the northern hemisphere, solar panels have to face south in order to capture maximum sunlight. Although they do not require direct radiation, the PV cells work best in direct sunlight. Most panels have a capacity of 200 watts or 250 watts. Solar energy is eco-friendly or green and can run all household electrical appliances. A backup battery can be installed to save electricity for nighttime use, but most households prefer net-metering where they can feed their excess capacity back into the grid. A 0.3 percent solar panel cover could supply the entire world with all the energy it needs, considering that on average every square meter of the earth receives 1.37 kW of solar energy (SolarPowerAuthority.com).
Inverter
The inverter is used to convert the direct current or DC generated by the solar panel to alternating current or AC that is used in the house and the grid. DC flows in one direction all the time while AC flows back and forth (alternating). You have a choice of inverters from among micro, central, and string. When linked to the grid, the solar panel system will use a back-and-forth ammeter. The back-and-forth meter or net metering system, moves forward when you use the grid electricity, and in reverse when the solar electricity is fed into the grid system, therefore the utility company credits you with excess generation capacity.
Solar Rack
Mounting the solar PV panels is an easy job when you have the correct size of racks, a hacksaw, a power drill, and a power screw driver. Because you need skills in orienting the panels, it is better that you leave this job to the experts. An installer will likely charge you $0.5 to $1.2 per watt. Find out also if it is legal or illegal to mount your owner solar panels in your state. The rack are specially designed for different installation situations, for example, a steep roof, a flat roof, on RV, and on marine vehicle. Racks can be obtained cheaply at $29 from Solarland, but there are more expensive types going for between $65 and $110. Marine grade racks are made of sturdy and rust-proof steel.
Charge Controller
The charge controller regulates the flow of electricity and protects the circuitry from overcharge and reverse current (Wholesale Solar). Without the charge controller, the lead acid battery will degrade quickly. The controller contains a transistor shunt with a pre-set maximum charge and allow recharge levels. They use either the maximum power point tracking or MPPT technology, or pulse width modulation or PWM. A battery charges quickly up to 80 percent but requires a lot more charging to reach the 100 percent peak. Examples of charge control manufacturers are Outback Power, Midnite Solar, MorningStar, Schneider, and Blue Sky Energy. Most charge controller accept a DC input voltage of 12V, 24V, and 48V.
Solar Inverters
An inverter will change the low-voltage direct current from solar panels into higher voltage alternating current. NewTownBuilders.com advices that it is better to use many micro-inverters at each panel than a single common inverter for the whole system. This is because at some point in the day, some panels are in the shade and therefore a drain on the power being output.
Inverters are designed for different types of solar usage, such as, off-grid, on-grid, grid tie, mobile, and marine grade inverters. There are even refurbished inverters for those who cannot afford new ones. At Wholesale Solar, they also pre-assemble and pre-wire inverters for ease of installation. There are a number of popular brands of inverters in the market including Magnum Energy, SolarEdge, and SMA. Solar edge inverters are simple, durable, come with a 12 year warranty, and are affordable at $1,300. Magnum inverters are mobile and easy to use and moderately priced at around $2,250. The SMA flagship inverter is powerful, off-grid, and equipped with a built-in monitor, but it is also expensive at $7,500.
Battery Back-up and Bank Systems
The battery back-up system needs to be installed carefully as it is linked to the grid system. Utility companies usually insist on either they do it themselves or you use a certified electrician to connect the back-up. Usually a back-up will have a separate sub-panel for charging it and is connected to the inverter and main panel. The sub panel ensures that there is no back flow of power to the mains and to the main panels. When there is a power outage, the system will automatically switch to the back-up battery unit. In order to boost the capacity of the back-up system you connect more sub-panel and inverter units in parallel. The bank system is similar to the back-up system, except that it is a separate system that is flipped on to connect to the house system. Battery units usually come in twos or fours.
PV and Battery Meter
Meters and monitors track the production of solar energy. The PV meter monitors solar production and efficiency, while the battery charge meter monitors the charge in the back-up battery. Another type of meter is the kill-a-watt meter, such as the Neurio Home Energy monitor, that checks the consumption of power by each appliance.
Evolution of Solar Power Technology
For all times people have used solar energy to warm their bodies, dry their grains, and warm there bath water. Solar water heaters on the rooftop have been used for hundreds of years, but solar PV electricity has only been around for a few decades. The advent of space technology was spurred by solar PV technology which powered the space ships and satellites, and in turn the space technology inspired solar PV refinement – which is still ongoing. Solar PV panels are still bulky, only 12 to 22 percent efficient, and expensive. Practical solar power production started some 60 years back, but the technology is much older than that.
Photovoltaic Cells
The photovoltaic effect, where materials absorb light energy and convert it to electricity, was discovered in 1839 by the Frenchman Edmond Becquerel. In 1873-76, the Englishman Willoughby demonstrated the conductivity of selenium and used it to produce electricity without using heat. In 1883 the first solar cell was created by the American Charles Frits using selenium and a thin layer of gold. The cell solar was less than 2% efficient – compared to modern cells which are 12-22% efficient. In 1887 the German physicist Heinrich Hertz observed the photoelectric effect and showed that it was UV light rather than light intensity that produced the PV effect. In 1953 to 1956, the first and practical silicon solar cells with an efficiency rate of 6% were made at Bells Laboratories to replace selenium. The PV technologies was marketed commercially by Western Electric from 1956, but the cost of $300 per watt was prohibitive and only used in space technology to power the satellites and onboard equipment.
By 1970, refinements had improved the solar cell to a 10 percent efficiency, and panels were sold at $100 per watt. The oil shock of 1972 created a new urgency for alternative and renewable energy. Through Exxon Corporation’s research efforts, the price of solar power dropped further to less than $40 per watt in 1975, the year when the National Renewable Energy Laboratory or NREL was established by the national government to promote green and renewable energy, including solar energy. The NREL developed a solar cell with a 32 percent conversion rate using gallium indium phosphide and gallium arsenide. In 1982 and 1984, Arco Solar established the first solar parks in Hesperia, CA, and Carrizo Plains, CA respectively, which produced 6.3 MW of solar power. Since 1995, solar cells have been used to power recreational vehicles (RV), and by 2005, DIY solar panel kits using the thin film technology had emerged.
Trends between Solar PV Cost and Utility Costs
In 1977 solar energy installation cost less at $77 per watt, but since 2008, the cost has dropped to just over $1.9 per watt. At the same time the cost of grid electricity has risen from 8.0 per kW in 2001 to 12.5c per kW in 2015. The cost of solar energy based on installation payback is just 5c per kW, although the energy supply itself is absolutely free. Many states have been encouraging their citizens to go solar, and they offer incentives like rebates, tax credits, coupons, buying off the excess production, and arranging financing options. The payback period for solar installation is between 6 and 18 years. The average home spends about $1,300 on electricity each year, and the rate increases by 3 percent. A solar installation at $15,000 and lasting 25 years will work out to $510 per year. Many states waive the property tax on solar installation besides other tax incentives.
Emerging Solar PV Technologies
Solar panels using thin and flexible plastic strips are 20 percent efficient and produce 50 watts per square meter per day. Apart from on-grid home installation, solar panels are used in RV, off-grid locations, camp gear, remote sites in Africa and Asia, and other areas. As of 2010, there were 150,000 PV installation in the US generating just 0.03 percent of US electricity compared to 70 percent by fossil fuels, according to data available at the Database of State Incentives for Renewables & Efficiency or DSIRE.
The energy used in the manufacture of a solar panel is significant. According to NREL, the energy payback is just 6 months to 2 years for amorphous silicon panels, and 5 to 10 years for monocrystalline silicon panels. Recent designs have come up with panels that are more durable or UV-resistant, thinner, stable, and non-discoloring plastic face. Nanotechnology is being developed to tap into the infrared spectrum and dramatically increase the efficiency of the panels to 80 or 90 percent. Other developments are the discovery of sunless, thermo-PV cells that convert heat into electricity.
High voltage panels with 65 V are being developed to reduce the number of panels required to generate power. Currently a panel produces 12 to 14 volts and therefore you need a series of four panels to achieve 48 V, which is the normal input voltage in PV systems. The maximum power point tracking or MPPT controllers are a new development that enables auto-switching between input voltages depending on the intensity of sunlight, and they can take in as much as 135 V. solar shingles have added flair to roof design because they blend well with the roof and overall house design.
Innovators like Fraunhofer Center for Sustainable Energy Systems or CSE are developing an integrated and pre-configured system that can be simply plugged into the main house system without worrying about permits, connecting inverters, controllers, and the likes, which account for half the cost of the solar equipment. The innovation will reduce installation cost from $4 to $1.50 and installation time from five days to one hour. The solar system will be more of an appliance than a remodel.
How the Solar PV Panel Works
The solar panel absorbs sunshine or solar insolation and converts it to a 12 V direct current electricity. An inverter convert the direct current to a 120 V alternating current which is the normal voltage on the grid. A battery may be used to store the electricity produced, although the efficiency of batteries is still expensive, inefficient, and bulky. A meter provided by the power company monitors the production level and rate, and how much power is fed back into the area grid. This is credited to the homeowner as a sale or deducted to arrive at the net power usage.
Solar Energy Effectiveness
According to the National Renewable Energy Laboratory or NREL a PV irradiation map shows the average solar insolation in the entire country. Generally, insolation is less intense further north and the cloudy and rainy mountains. Irradiation is measured in kW/m2/day. The insolation in the south east to south belt receives the most irradiation of 5.0 and 7.0 kW/m2/day, in the mid belt they receive between 2.5 and 4.0 kW/m2/day, and across the entire the northern belt from coast to coast, they receive less than 2.2 kW/m2/day. You need to also factor in the seasonality of solar radiation, as it is most during summer and least during winter. Furthermore the local geography of your home may militate against the solar potential of your area, for example clouds, frequent rains and snow, or you are surrounded by mountains to the south.
Direct vs. Indirect Solar Energy
On the one hand, direct solar energy is converted to its final use by the use of appropriate equipment. Panels are used to generate electricity directly while solar heaters absorb solar radiation to heat water directly. Skylights allow light and heat to penetrate into the heart of the house directly. On the other hand, indirect solar energy is converted from one form to another before it can be used. For example a solar generator will use a low-voltage solar output to run a generator that will produce a higher voltage electricity. A solar heater can be used to generate steam that will drive a generator turbine to produce electricity.in nature, plants use solar energy to synthesize there nutrients which enable a plant to grow.
Active vs. Passive Solar Energy
The water heating systems use solar energy either actively or passively. Both active and passive systems have a solar collector, a power backup or alternative source of power, and a hot water reservoir. An active or forced circulation solar energy system is one that uses mechanical devices to drive circulation of water and air, for example a water pump, an HVAC, and so forth. A further modification is active direct system where the water flows through the solar collector and gets heated. The heat exchanger is part of the solar collector and a pump ensures circulation. This system is only suitable in warmer climates. The active indirect solar water system is one that has two stages of heating in which solar radiation heats a fluid in the collector, a pump circulates the fluid in turn heats the water through a heat exchanger.
A passive system is one that relies on natural circulation such as air flowing through vents or a heat exchange. In a passive integrated collector storage or ICS, aka batch water heater, the solar collector acts as both the heater and reservoir. The system is suitable in warm climates. A passive thermo-siphon is a modified version of the ICS in which the reservoir is separate and located below the collector. Water circulates between the collector and the reservoir by convection current. The system is suitable in all climates as the reservoir can also be insulated.
Note that active and passive technologies are also applied to solar PV systems for example self-tilting panels that ensure the panels maximize their exposure throughout the day and water circulation or pumping systems. Passive solar technologies are achieved by exposing the water to the sun, painting the roof dark or white according to the desired heating effects, creating air circulation vents in the walls, thermo-insulating the walls, windows, and doors.
On-Grid vs. Off-Grid
Traditionally most homes are connected to the grid, except for very remote homes that may be too expensive to connect because of distribution line cost. Being on-grid allows you to remain connected to the utility company’s grid and continue to be billed by them. It is useful if you have no battery backup for nighttime supply, overcast days, and winters. If you make more electricity than you use, you can sell it back to the utility company through an arrangement such as net metering. You also do not accumulate costs of installation of the grid line to the house. You therefore expect to generally reduce your power bills rather than eliminate them under the on-grid arrangement. For modern homes, there is an alternative to being on the grid. By going off the grid system you are independent of controls and bills by a utility company. The off-grid system also operates in remote areas where the grid has not reached. The off-grid system requires that you have an alternative source of power for nighttime, overcast, and winter days. This could be in form of a gas driven generator, wind power, or, more practically, a battery backup system. The battery is recharged by the solar PV system during the day. The federal and state energy and housing agencies provide incentives for home owners who choose to go off the grid. The new home owners on their part build with materials that are well-insulated and therefore reduce the need for energy.
If you live off-grid, you have no option but to adopt a solar PV solution. Remote homesteads, campers, and other survivors look for affordable power solutions and often have to build their own systems. Pre-configured arrays and kits, and “plug and play” systems enable a DIY to save on time, effort, and cost of installing the solar PV system.
Grid-Tie
If you choose to go solar you have to consider whether your system will be tied to the grid system or not. When on-grid you have to have such components as solar panels, inverter, clamps, racks, and module grounding, cabling, and optimizer. Other components include the roof flashing, surge suppressors, emergency battery backup, and wireless monitors. At ballpark costs, a 10-panel grid-tied system producing 350 kWh per month costs about $5,400, while an 80-panel unit producing 3,090 kWh per month costs about $43,000 before government incentives. a simple system to power lights and low-power appliances in the homestead could cost between $7,000 and $10,000. A 43 kWh kit using 2 to four panels for a cabin goes for $1,000, while a ranch kit producing 2,100 kWh and using 45 to 54 panels goes for $37,000 before financial incentives.
Solar Panel Types
Photovoltaic or PV panels are the most efficient although also the most expensive of the solar panel systems. They are solid-state technology, meaning they have no mechanical or moving parts, therefore you do not expect a breakdown. At 20 percent efficiency rate, solar PV are the most efficient of all solar energy trapping technologies. They can work in overcast weather.
Choosing to Install Solar PV Energy
Solar Smart Homeowners
The average American home uses one kW of electricity per hour, which costs between $0.09 and $0.15 per unit from the utility company. Compare your solar investment with the utility bills and decide if solar is worthwhile the cost; in most cases it is.
Solar power is expensive and if you are not careful, you might end up increasing your energy costs instead of reducing them in the long term. Find out what tax incentives are offered by your state, the federal government, and the utility company, advices DSIRE. Assess your energy situation and needs before embarking on a solar energy project. You need to be in a sunny location, have a south-facing roof, and have enough space on the rooftop for installation. Solar project is easily expandable, therefore you need not go full scale at the onset. Instead do partial projects in stages, incorporating new uses as you expand. Your utility company net meters at retail rate, but when you start selling a surplus, the cost is at wholesale price, therefore it might not be worthwhile to go beyond your home needs. Do not strain yourself with financing if you have a financing option. Both the government and utility companies offer incentives that could reduce your net cost of installation by as much as 40 percent. Negotiate an amicable insurance coverage and premium for the solar installation. Insure the installation work in case of a loss occasioned by accident or damage. Watch out for shady contractors or installers who even charge for tilting the panels in order to gain a meagre 2 or3 percent increase in solar output.
Solar Saves on Your Utility Bill
Electricity bills have been rising by about 3 percent annually since 2001, as illustrated in the table below.
| YEAR | RATE PER KW | YEAR | RATE PER KW |
|---|---|---|---|
| General | 8.6c | General | 11.5c |
| General | 8.4c | General | 11.6c |
| General | 8.8c | General | 11.7c |
| General | 8.9c | General | 11.9c |
| General | 9.4c | General | 12.2c |
| General | 10.4c | General | 12.5c |
| General | 10.7c | General | 12.7c |
| General | 11.3c | General | 13.0c |
For a home that paid a total of $1,200 in 2001, they would pay $1,926 in 2017, and $3,582 in 2037 for the same electricity. If they go off-grid in 2017 they will spend about $25,000 for the solar installation and for the next 25 years they will have saved some $26,400 in accumulated utility bills. Even if you went for a power purchase agreement or PPA, solar loan, or solar lease your annual utility payments will be only $1,200, and it will be non-fluctuating and predictable.
If you live off-grid, then you have little choice but to install solar panels and have a battery backup to boot. The total number of panels will directly impact on the investment, normally at the rate of $3.50 per watt.
Many solar companies hesitate to make specific quotes for their solar PV system installation because of the many factors that distort the installation cost, instead they give general information. Insolation varies with season; high in summer and low in winter.
Consult a solar company for an expert opinion on the suitability of your home for solar installation. You will provide them with such information as the roof footprint, pitch and direction it faces, your daily power consumption, any surrounding obstructions such as trees and mountains. The consultant already knows the average sunlight, sun hours, and insolation that you receive in your locality. For example in Arizona and California you get more than 7 sun hours daily, while in Seattle and Chicago you get about 3 sun hours daily. When working out your solar system size, they factor in an extra 71 percent to cater for inefficiencies in the system. If you decide to work as a DIY without a consultant’s help, you can make use of online tools to help you along. A solar estimator app will calculate your needs solar PV system and the budget.
Finally, you need to decide on the merits of outright purchase versus financed or leased ownership. In a PPA, leasing, and loan financing you do not tie your investment down because you pay little or no upfront costs, they monitor the power remotely for you, you get a guaranteed company warranty, and they can boost the solar footprint to help you achieve the targeted output. On the flipside, you lose certain important privileges like rebates and tax credits, ownership, ROI in case you sell the house, and there is the extra cost of financing the loan or lease. The ROI of solar is as high as 97 percent. Estimates are that solar PV adds $5,000 per kW to the house resale value, therefore an average 5 kW system could boost your house’s resale value by as much as $25,000.
Cost of Installing Residential Solar Energy
Solarpowerauthority.com notes that in general, the US household consumes an average of 1 kW per hour or 730 kW per month. Given the rate of electricity ranges between $0.07 and $0.13, the total monthly bill will be between $51 and $95. In Hawaii the bill would almost double to $175. If the household has extra utilities like extra electrical appliances in the kitchen, hot tub, heated swimming pool, HVAC system, and so on, then the bill is certain to be much higher.
A solar panel typically has an energy conversion efficiency of 12 percent and will generate about 10 watts per square foot. You therefore need a 100 square foot footprint on the roof to generate 1 kW of power. The sun will shine for less than 12 hours a day, especially on a cloudy day. It will get less insolation if the sky is overcast or when it is raining. The US solar radiation map shows the details of the average daily sunshine per region. Other resources help you find out the precise insolation of your locality and calculate your expected solar power output per square foot. Seattle and Chicago get an average of 3 hours of sunshine per day, California gets 6 hours, while Arizona gets 7 hours. This means that you will need a larger area to produce the daily requirements in a location like Seattle and less in a location like Arizona. If your local utility company has provision for net metering then you will have incentive to install a higher capacity solar panel, which will enable you to feed more power into the grid during summer and consume more during winter, therefore have a zero balance. If you are located off-grid then you will need to store your own power in a battery, which costs a significant amount, between $2,500 and $5,000, depending on the capacity you require.
Talk to an Expert
There are many experts in the solar installation business. Moreover many panel suppliers also offer installation services. If you need to find and compare many quotes, go to either the website Findsolar.com or energy.sourceguides.com. Some utility companies encourage home owners to go solar and they have their teams of qualifies installers to do your installation at a competitive rate.
Saving on Energy bills
Americans waste a lot of energy either wittingly or unwittingly. Family members forget to turn off the lights when not in use or after lights-out. People still use incandescent light bulbs instead of low-power yet bright LED and compact fluorescent bulbs. For the same wattage, the compact light is eight times more efficient than incandescent lights, and LED is four times more efficient than the compact light. Some people still retain their old AC, fridges, and other non-energy star electrical items that consume a lot of electricity. Such wastage can be mitigated by installing a solar unit. Utility companies and the state do give energy credits and other incentives when you convert from the grid to solar. When doing renovation projects, you can include the solar PV system as a worthy project which, unlike most other house remodels, does give you a return in form of saved bills and net meter credits while you still live in that house. The project has another advantage of having low-maintenance costs. With an 8.5 kW solar PV installed, you can save up to $300 per month in electricity bills. You add value to the home and help to improve the environment by going solar because you reduce carbon release by several tons each year. If you have a sizeable homestead you can hang clothes to dry in the sun instead of using the drier. You can wash dishes by hand if they are not greasy instead of using the dish washer. You can easily achieve a 50 percent saving on electricity bills by carrying out the above mentioned measures. Then you will consider the solar option as a way of bring down the electricity costs further – down to zero or even to income earning. Take advantage of incentives like tax rebates, financing, and so forth to reduce your cost of installing a solar PV system. Once you’ve installed the solar PV system, you need to ensure maximum exposure by trimming down tall trees or hedges.
Audit Your Energy Efficiency
Do an audit of your energy efficiency. Identify appliances that are not energy starred and consider replacing them with energy star compliant ones. Light bulbs are easily and affordably changeable to LED or fluorescent lighting. You can insulate your house walls, windows and entryways in order to retain the heat indoors.
Calculate Your Needs
Decide what your needs are. You can estimate you kW hours using your average monthly bills over a period like six to twelve months. Then you will decide if you want to generate enough solar electricity to match the consumption, exceed it and by how much, or select the energy needs that you want connected to the solar PV system. On average the American home uses 10,000 kW of electricity per year. The installed solar PV capacity in the residential system ranges from 3 kW hours to 10 kW hours, where a 3 kW hour unit will produce between 3,600 kW hours and 4,800 kW hours per year, which is half the electricity needs. A 5 kW hour system produces between 6,000 kW hours and 8,000 kW hours per years, which is just short of the average home needs. A 10 kW solar panel system will produce between 12,000 kW hours and 16,000 kW hours of energy per year.
The PV Watt Calculator
This is an app from NREL and other app developers that helps you to quickly work out the expected or optimum energy output from your solar PV system. It runs a simulator with several adjustable variables to help you maximize the efficiency of the system. It even incorporates google maps to pinpoint your location and avails more specific data about that area.
The Affordable Solar Wholesale Distribution have come up with their own residential solar calculator called the Grid-Tie Estimator (affordable-solar.com). You submit your current monthly kW power consumption, monthly bill, sun hours, percentage coverage you desire, and click on calculate. It will tell you the ideal system, cost estimate, and give you statistics of the savings you will make. Google has also embarked on its own solar calculator called Project Sunroof, although currently it is only partially implemented in 42 states. When you pinpoint a location, it gives information such as the total sun hours per year, available area for solar installation, and the annual savings on electricity bills that you are likely to make.
The peak sun-hour is the time when the intensity of the sunlight is 1,000 watts for every square meter. Solar power harnesses sunshine energy, and therefore the amount of energy you get depends, ultimately, on the amount of sunlight available in your area. The panels need to face the sun as directly as possible for maximum effect. If the panels are fixed, this would mean the most direct position towards the midday sun in mid-summer, and which is south-facing. The sunlight is 25 percent to 40 percent less effective on a cloudy day than on a sunny day. You can use a solar pathfinder or plot a sun chart to determine the amount of sunshine received on an ordinary day. Some panels are adjustable to face the direct sun all the time, but this option may not be cost effective as yet. Solar radiation changes with the time of day and season of the year, and is higher towards the equator. In the sunny California, the average period of sunlight is 7 hours although the peak sun hours are about 3 or 4 hours.
Cost of PV Panels
The full kit and installation of a 5 kW solar panel system costs in the range of $25,000 to $35,000 according to soalrpowerauthority.com. The majority of residential owners prefer the more reliable, efficient, but expensive monocrystalline silicon panels. These panels are up to 20 percent efficient, lose just 0.36 percent of their efficiency per year and they will last for between 20 and 30 years. A standard panel measures 3’3” by 5’6” in size, but size may vary slightly with an individual company’s mounting system. The national average cost of solar PV panels in 2017 is $3.16 per watt, and most states are within $0.5 per watt range of the national average as noted by EnergySage. Solar energy installation is generally cheaper in the sunnier climates like in Florida, where you need fewer panels, compared to the cooler north such as Massachusetts and Oregon, where you need more panels. When you consider the high cost of power in states like California and Hawaii, going solar makes a lot of sense. The cost of installation is divided among solar panels, equipment, and installation. Panels will cost $1.20 per watt, therefore a total of $6,000, the installer will charge $0.80 to $1.2 per watt or between $4,000 and $6,000, and the rest of the materials like inverter, charge controller, meter, and wiring will cost between $3,500 and $5,000.
An outright purchase from your own resources guarantees that you get free energy, get rebates and tax credits, and you can net meter on the grid, but you have to maintain or upgrade the system yourself. You still can get a solar panel system without your own ready resources, by opting for other forms of financing.
It Matters Where You Live
The ultimate price is dependent upon the available roof footprint, its orientation, distance to the grid connection point, and your location in the irradiation map. Remember if you live in the far north you need more panels per kilowatt than a person living in the far south. If you opt to DIY then you can cut your cost by about one third – since most contractors will charge around $1.0 per watt. You can also reduce costs further by negotiating a discount with bulk suppliers or by dealing with the factories directly. Factories sell to their wholesalers at as low as $0.75 per watt, so you too can get at a price below $0.9 per watt. The bigger the installation the lower the cost per unit because the cost of the components does not increase in proposition to the number of panels or capacity of the system. For example, a 250 watt panel costs around $250 on the retail market, but you can acquire it for just $187 in a discount store. You also need to look for discounts on the inverter, battery, brackets, clamps, and all those other components, which might be a little more difficult because you will be buying just a single item unless you source everything from the same dealer. Sometimes you would be better off work through an installer and negotiate a discount with them instead.
Financing
The overall cost of solar installation is greatly influenced by government and utility company incentives. In order to finance the purchase, you might opt for a power purchase agreement or PPA with the utility company, a bank loan, or a lease agreement with a solar PV company. While it is the most affordable option, the loan option may not be the best idea when you factor in the interest rate which ranges between 1 percent and 6 percent, thus likely to wipe out any cost advantages of going solar. The option however gives you immediate ownership, access to all benefits like tax credits, rebates, and net metering. In PPA the solar panel system company owns and maintains the equipment and you pay for the power you consume, much like you do with the grid utility company, but at a lower cost. In a lease agreement, you will be paying some amount of money to the solar PV system owner without owning it, much like paying rent on the facility. The company will maintain the system and do any necessary upgrades as they become necessary at no cost to you. Any credits and rebates are given to the company rather than you the homeowner. But at least, this option allows you to renew terms over the years and because costs of solar PV system keep going down, you expect to pay less each time. Some companies like Sunrun allow you to lease-purchase their kit and installation. You do realize that the cost of electricity keeps rising, while the cost of solar panels keeps falling, which would mitigate your investment in the solar PV system. In fact, according to energysage.com, you can still save between 10 percent and 30 percent on power bills by going lease or PPA, compared to outright purchase where you save anywhere between 70 percent and 100 percent, and even may earn from net metering.
The US government and some organizations like Fannie Mae do sponsor energy efficient mortgage or EEM. The mortgage can be given to a new homeowner who meets eco-friendly standards or as refinancing for a homeowner who wants to upgrade to an energy efficient level.
The overall benefits of going green through solar are not limited to electricity bills only. You have freedom to use electricity in many ways, you reduce carbon emission, reduce pressure on the grid thus allowing the grid power to be used where solar does not suffice, and gain on the ROI of your home.
Factors That Impact the Cost of Solar Panel Installation
The cost of the solar power system includes the panels, inverter, junction box, and connectivity. It may optionally include a battery for storage, but such storage is usually low-capacity for home needs. The effectiveness of the solar PV system is influenced by sunshine, which is most intense on the south facing roof.
Suitability of Roof for Solar PV Installation
Most roofs slope in more than one directions and some have a flat rooftop. The shape of the roof itself may further complicated the design of the solar PV system. In order to produce one kW of solar electricity you need 100 to 150 square feet of roof footprint, depending on your geographical location.
Solar panels can be installed on most roofs as long as there is access to sunshine. However there are several other factors that determine if and how you will install the solar panel system. a south-sloping roof has more solar insolation than an east-west sloping roof. If your roof faces the east-west direction then you will need to install higher capacity or a larger number of panels to compensate for the inadequate insolation. In some cases you can tilt the panels in a way to capture more sunlight, but that would usually be an expensive option because it involves more labor, technicalities, and would still result in a less elegant roof, which would impact negatively on the resale value of the house. The pitch angle of the roof that is suited to solar panels in the southern states is between 10 and 35 degrees and in the northern states is between 15 and 45 degrees. With a flat roof, you need to mount the panels at an acceptable tilt. The size of the roof determines how much area is available for installing the panels. It takes about 100 square feet of space to generate 1 kW of solar electricity, therefore a typical home which needs 5 kW will need about 500 square feet of roof area.
When there is plenty of surface you are able to have more panels, or use lower capacity panels spread over the entire roof. You are also able to adopt a more appealing arrangement of panels in order to blend in with the roof design. The shape of the roof will impact on the availability or efficiency of using the roof area. Some roofs have an interrupted slope that will face a different direction or have other features such as a skylight, chimney, or dormer that will both interrupt the shape of the roof and be unusable for the solar installation. Some roofs experience external shading that reduces their reception of solar insolation, for example, the house may be surrounded by tall structures like trees and taller buildings. If the trees are in your compound then you can trim them, but it might be more challenging to deal with the situation if the trees are in the neighboring compound. The roofing material has little effect on the solar installation. Materials like wood, composite, metal, tar and gravel, iron or aluminum sheets, cement, or slate will not cause any problem with solar installation. You need to note however that some roofing materials are more fragile and prone to breakage during installation, for example, cedar, slate, and clay tiles. Furthermore, wooden materials need to be specially treated against humidity, mites, mildew, mold, and rot, considering that it will be hard to access the roof after solar installation is completed. The age of the roof may also have an impact on the installation decision. An old roof may need replacement before the expiry of the solar panels, therefore you have to decide whether to replace or recondition the roof first, install in spite of the roof’s condition, or install on a different roof, such as the garage or gazebo.
Inspect the Surroundings
Some homes are not ideal for solar installation. These include a condo, an apartment, and a house that is sandwiched between tall structures, a rental house, and oddly shaped roof. The option for going solar may be to join a community solar garden, where several homes share a common location for their solar panels. A condo or apartment block for example can have a solar garden on the rooftop.
The home surrounds determine the level of exposure to sunlight, for example trees, tall building, and mountains may limit your exposure to sunlight. In the U.S. the north-facing roofs do not receive sunshine most of the year, the east- west facing roofs receive less radiation, but the south facing roofs get the maximum radiation. For maximum effectiveness, ensure your rooftop faces the south direction or that the individual modules are pitched towards the mid-summer noon sun. According to SolarPowerRocks.com, you can either increase the collecting footprint or install high capacity panels. You can consult the national solar maps by the National Renewable Energy Laboratory to learn more about the correct orientation of your solar PV system.
Benefits of Going Solar
According to Solar Energy Industries Association, the U.S. has an installed capacity of solar PV energy to the tune of 32 million kW, which is enough to power 6.2 million homes. As a solar PV owner, you expect to save some $10,000 over 20 years of use. You will also have decreased the carbon footprint by 20 tons per year. Solar power does not suffer constant breakdowns and surges. The absent of utility bills gives you the peace of mind, and an excess capacity can actually earn you an income.
The average home receives an electricity bill of between $50 and $100. If you consume 5 kW of power daily at the flat rate of 15 cents per unit, then you will accumulate a total monthly bill of about $112.50, which translates to $1350 per year. In the 20 to 25 year lifespan of the solar panel system you will have paid out $27,000 to $33,750, or more when you factor in the increases in electricity cost. A 5 kW PV system cost you about $18,500 before tax credit and $13,500 after tax credit. This means that you will save at least $8,000 over a 20-year period. By going solar you will eliminate the electricity bill, take out the hassle of budgeting for electricity, help clean the environment, and reduced the pressure on utility providers. You will be insulated against rising cost of electricity as yours will come absolutely free. If you produce more solar energy than you use then you can sell it to the utility company. With the falling prices of solar energy panels and installation, it might soon make a lot more sense to go completely solar, but currently, you will more likely opt to stay connected to the main grid because of nighttime usage or extended bad weather conditions, but you will have a much reduced bill. You can be further independent if you install a battery power store than will provide nighttime electricity. You can also use solar lighting and equipment which are more energy efficient. The ROI of a solar panel installation is between 10 and 30 percent according to EnergySage Solar Marketplace. The solar panel will pay off in seven or eight years. States offer incentives to homeowners to go solar. These include tax rebates, assistance to acquire and install solar panels, and providing attractive loan facilities for solar installation. The national energy program also encourages research in cheaper methods of manufacturing panels, while the government waives taxes on solar panels, equipment, and even appliances.
Affordability of Solar Power
On a purely commercial, non-assistance basis, solar power is not viable because the cost is not offset by the output, as observed by HGTV. However it is affordable in situations where there is assistance by state in form of incentives like tax rebates, financing, net metering, utility financed connectivity, and so on. But at the end of the day, the major determinant of affordability and practicality of having the solar installation is the amount of sunshine that will have fallen on the rooftop.
The increased uptake of solar panel installation among the citizenry will be the main driver to lowering the prices, increasing competition, and eventually going green. And Americans have taken to the free sunshine in great numbers. The Solar Energy Industries Association or SEIA noted that the uptake of solar PV energy increased by 51 percent in 2014 over 2013 and that the current hype is mostly about environmentalism by individuals, corporations, state, and non-profit organizations. Demand is being driven by shortage of power and states’ lack of capacity to address the issue fully. The entry of EV has further increased pressure on the grid. Since 2010 the price of solar PV panels has dropped by at least 45 percent.
Free Energy
Installed solar power is free and largely maintenance-free. Using solar by day costs almost free, and storing electricity in a battery costs a paltry $0.12 per kW compared to grid power that costs $0.89 on average. The actual average savings vary from state to state according to EnergySage Solar Marketplace. The annual savings for homeowners over a 20 year lifespan of the solar panel system is $35,000 in Texas, $90,000 in LA, $36,000 in Seattle, $63,000 in Boston, $56,000 in New York, and $41,000 in Chicago. It takes about six or seven years for the homeowner to break even on the cost of installation.
Solar Installers
Nationwide, there are more than 1500 solar companies, therefore you are literally surrounded by solar installers. By doing research in your local city and on the internet you will get multiple free quotes, which could translate in a 5 to 10 percent saving. The big solar companies may have more technical support, wider options, better distribution networks, and safer warranties, but they charge between $2,000 and $5,000 more for these privileges. NREL advises that shopping among the smaller installers saves you a significant amount of money and they respond faster to requests and maintenance calls.
Eqipument Cost
The solar PV system does not come cheap and its payback period is quite long, up to 20 years – which is the limit of the system in terms of productivity. A 12 volt, 1 amp solar panel receiving 5 to 6 hours of sunshine in a day can generate 15 W at no cost at all. For a full energy coverage of 5 kW, you will need between 11 and 20 panels, but according to Solar-Estimate.org, it is recommended that you factor in another 70 percent above the rated capacity in order to compensate for inadequate sunshine, therefore you need between 25 and 35 panels. By comparison, the utility company will charge you at the rate of $0.13 per kW. According to HGTV, the average 5 kW costs around $36,000, but after federal and state incentives are factored in the cost comes down to around $16,000. The 2011 proposed bill “Ten Million Solar Roofs Act (2011) aims to bring the figure down to just $7,900. If you still feel you cannot afford the solar installation, you can go into a financial arrangement that will see you pay only a small fee monthly.
Technology
The quality and efficiency of solar equipment, especially the panels, inverters, and battery back-up differ from manufacturers to manufacturer, hence the variation in pricing. Knockoffs may be cheap to buy but they are unreliable and fail altogether in a few years.
The technology, pricing, and aesthetics of solar PV have improved greatly and the efficiency rate has reached 20 percent to 32 percent according to solarpowerauthority.com. The solar panels have gone beyond water heating to producing electricity. In a typical setting, a roof print of 2000 or so square feet provides enough space for as many as 40 PV panels that will generate some 7 kW to 12 kW of power, which can be sold back to the utility company by a net metering process. The cost of such an investment will be around $39,000.
Aesthetics
A solar panel system is also installed for its aesthetic value. New home hunters are impressed by the presence of solar PV on the roof. The home’s resale value improves by approximately $6,000 per kW in California.
Incentives
The high cost has been made more affordable by financing facilities that reduce the upfront payment by an average of 60 percent and in some cases even by 100 percent. In some states they also offer solar PV grants, a renewable energy program that pays homeowners to generate electricity, a state renewable energy tax credit, and a 30 percent federal renewable energy tax credit. These incentives help to reduce a would-be $70,000 investment to a paltry $12,000 to $16,000. Where a leasing program is put in place, the utility bills are offset by the savings in the monthly bill. Some states also have a net metering or feed-in tariff, in which the homeowner is paid the full cost of kW fed into the grid. The feed-in program uses a separate meter for solar electricity fed out of the system, so the homeowner pays their consumption bill but gets paid for power fed into the grid. In all, solar financing enables more homeowners to adopt the solar energy program. Net metering makes economic sense when you finance your own project because otherwise the benefit goes to the financier, especially the system installer (HGTV). But still, many homeowners prefer the financing option because it is easy on the pocket.
Solar Leasing
The major barrier to going solar green is the initial cost of purchasing and installing the system. But homeowners now have a solar PV system leasing option from SolarCity, in which they get a 5 kW solar PV system for a monthly fee of just $100. 90 percent of Americans are in favor of solar energy if only the cost were affordable. The federal government aims to install 10 million solar roofs by the year 2020. The federal bill of 10 million Solar Roofs Act (2011) also aims to reduce the cost of a 5 kWh solar PV system from the 2011 average of $35,000 to just $7,900 in 2020. The development of solar shingles for building integrated PV or BIPV has further made electricity more attractive to new home builders because it blends in well with the design and reduces the overall cost of roofing and solar PV paneling. Examples of solar roof shingle makers are Powershingle by Uni-Solar, and PowerHouse by Dow.
Payback Time
Contrary to common belief, a solar panel system takes a significant amount of time to pay back. For example, it is common to spend between $7 and $9 per watt of power, therefore $25,000 to $35,000 for a 5 kW system. Even with a 50 percent subsidy for a system that produces $75 worth of electricity monthly, it would take the solar panel’s lifetime to pay back. For example, if a solar panel costs $3 per watt and another $3 per watt to install, then it will cost $18,000 to install the system, and it will take 20 years to return the cost at the rate of $75 per month. On the one hand, if you add a battery to your solar panel installation, then expect to replace the battery every three to five years. On the other hand the cost of panels has been dropping rapidly, thanks in part due to thin film panel technology that has been commercialized by such companies as First Solar that sells to commercial clients only, and AvaSolar and NanoSolar, which will soon launch their products at between $1 and $2 per watt. If the prices fall to that level, then the competition will also have to slash theirs. If the combined cost were to drop to $10,000, then a 5 kW solar panel system will pay back in less than 10 years. The payback time might be even shorter if fuel and electricity prices rise.
ROI of Solar PV Panels
The value of homes with a solar PV increases by 3 percent to 4 percent in California. They also find markets twice as fast as houses in the same neighborhood without the solar PV. New home buyers are willing to pay up to $4 per watt extra for the solar PV-fitted home, or $20,000 premium. This benefit does not, however, extend to a leased or PPA solar PV fitted home.
The solar installation is a financial product because it offsets the cost of a utility bill and can even earn an income. The solar investment pays off in about seven years after which you save money or earn an income off it for another 15 to 20 years. One factor that impacts on the ROI is the rate of electricity in a state. Solar PV energy represents the savings on your bills, and the more solar PV energy you have the more savings you make. There are a number of incentives by government and utility companies. The federal government offers tax credits that allow you to offset your tax from up to 30 percent of the cost of solar installation. Utility companies give rebates for installation and they buy back excess power either at wholesale or retail rate. The utility companies can help you install solar PV because they benefit from a decreased pressure on their energy provision. Incentives also reduce the payback period. Financial institutions and installation companies can help you afford the solar PV system. The solar renewable energy certificate or SREC issued upon approved solar PV installation can be sold, thereby recoup your installation cost quickly. By shopping around, you can get a lower cost that will also give you a shorter payback period. Rebates and tax credits will further help reduce your final cost by more than 40 percent. Choose the most current technology that offers superior materials, higher efficiency, a lower depreciation rate, aesthetically appealing panels and solar shingles, and thin film panels. When your property is ideally located it should ideally be in a sunny area, have a south-facing roof, have a steep pitch, and have an adequate footprint. The solar PV installation should help improve the curb appeal of the property. This can be as much as $5,000. Your business can grow because of a lower energy bill, green credentials, carbon credits, and so forth.
Alternative Uses of Solar Energy
Solar Water Heating
The water heating component is the single most expensive contributor to the household utility bill, and a green heating system will help to reduce costs. According to HGTV, if you are not ready to fully commit to solar PV energy, you can still go halfway and install solar heating for water in the bathrooms and swimming pool. The solar water heating system is useable in any climate as long as there is direct sunlight. Remember, it is the UV light that does the heating rather than the totality of the sunlight. It needs adequate capacity where the sizes of the solar collector, storage tank, and a required minimum temperature are matched. For example, a roof area of 20 square feet in the southern states will serve two occupants, and an additional 8 square feet for each extra person. You need half as much more in the northern states.
The storage tank should hold 1.5 gallons for every square foot of collector area, for example you need a 60-gallon storage for a household of three people. Solar heating saves between 50 and 80 percent on water heating bills and reduce the carbon footprint according to EnergySage.com and according to the Energy Star program by the Department of Energy and the Environment Protection Agency or EPA. Solar thermal collectors are cheaper than PV panels. They absorb heat, which can be passed on to the household water heating system. They can also be used to create a solar boiler which drives a steam turbine for producing electricity. The solar water heating system will pay back in about 10 years and prevent 4000 pounds of carbon dioxide emission. You can buy and install a swimming pool solar water heater for between $3,000 and $4,500 and get a ROI within 2 to 5 years.
Lighting
Besides powering the household appliances, there are a number of other practical uses of solar. If you do not wish to invest in large, roof-top mounted PV panels, you can still make good use of solar power on a small scale. For example you can install individual solar lanterns with built-in light sensing-switch and rechargeable batteries in the garden, which give a great lighting effect by night. You can also have waterproofed floating lamps in the swimming pool or in the fish pond. Your fish pond and aquarium can use a low-powered solar pump to circulate air in the water. A solar heater can warm your bathroom and swimming pool water during a sunny day. A water purifier can be powered directly by a small solar unit.
A solar collector can be directed towards a solar generator, which in turn will provide power for home medical devices like an oxygen tank, or small devices and appliances like a mini fridge, a phone, iPad, or tablet charger, LED rechargeable torch, a shaver, and so on. Unlike a gas generator, the solar generator can be installed indoors and has zero running costs as the sun “fuel” is free. There is little risk of power surge that could damage equipment. A swimming pool uses a number of electrical devices that are low-powered and ca therefore be supported by solar power. For example, for just $1,000, you can purchase a solar water pump, filter, and aerator system for your swimming pool. There is a great saving of about $100 on monthly bills. Solar security lights and decorative lighting can be installed individually and hang at strategic locations in the compound. They store energy by day and use it at night, and you do not have to worry about the bills. The attic gets pretty hot by day because of the warm rising currents from the lower floors and conduction from solar radiation above. A sun-powered fan will work constantly throughout the summer days at no cost and save you several hundred dollars during a summer season. The good thing about the solar fan is that it does not require a battery since it works at exactly the moment it is needed – when it is sunny and hot.
Solar Shingle Roofing
Solar shingles are an interesting alternative to solar panels when it comes to small-scale solar paneling. The shingles, such as Powerhouse Solar System 2.0, or PH 2.0, by Dow Powerhouse, resemble conventional shingles, yet they serve as both shingle roofing and solar collectors. They are coated with a thin layer of copper indium and gallium di-selenide. The rest of the shingle is wood, clay, concrete, laminate, composite asphalt, or other conventional material. It is used in retrofit and new construction. Moreover, the PH 2.0 has a mechanical interlock system that allows quick and easy installation. Individual damaged modules can be replaced easily. The building-integrated PV or BIPV are more costly than conventional PV panels, at $7 to $10 per watt. However, all factors considered, solar shingles on new construction are cheaper since they replace the conventional shingles or slates and the associated installation. You do not invest twice in materials and installation labor. Solar shingle installation requires knowhow and patience as the parts are small and need to be individually wired to each other. It involves both a skilled roofer and a solar contractor. The Apollo II solar shingle by Certain Teed is a monocrystalline, lightweight, and highly efficient solar shingle that installs on concrete or asphalt surfaces. It has water channels and protruding fasteners that prevent water leakage.
PV slates, such as Atlantis Energy Systems, are a hybrid, pre-fabricated solar roof that generates electricity and heats water at the same time. A set of 12 solar PV slates require 50 square feet of roof area and they produce 46 watts of electricity. Tall Slates have a building integrated thermal electric roofing system or BITERS kit which is a pre-assembled solar panel system that is simply hoisted by crane onto the roof and connections to the junction box and the whole installation takes just an hour. This system saves a lot of time and labor costs.
PV cells become very hot under the sun and may need to be cooled down for them to operate optimally. The excess heat finds its way into the attic. One solution is to install a water heating system beneath the PV panels which will bring in cooler water that will then absorb the heat and cycle back into the hot water reservoir. The other option is to connect an attic fan that will fan away or dissipate excess heat and allow for a cooling effect in the space.
Solar RV
Radio vehicles or RV, boats, and cars can be powered by solar. Camping tents have not been left behind, as you can buy a solar flexi-paneled canvass that will trap power by day and store it in a battery. If you are adventurous you can also install a solar cooker or barbeque, which is basically a large hyperbolic dish that focuses reflected light to one spot and makes it very hot. The solar cooker is ideal in the garden, gazebo, or barbeque area.
Installing the Solar Panels
Case for Professional Installation
The solar installation is doable as a DIY. However, s explained by Energyinformatives.org, installation of a solar panel is technical work that requires one to understand the intricacies of electricity power. It is necessary to understand the different measurements and what they mean or imply. An electrical fire or fault can be catastrophic and expensive. DIY has a negative impact on your insurance premiums and ROI because it will not have the local housing authority’s stamp of approval, and you certainly need a certified electrician and the approval of the utility company to connect the solar system to the main power grid. As such, installation is best done by a professional. The labor part of the installation cost is quite significant – $1.00 per watt or at least 30 percent of the total cost. Some solar OEM-installers have attractive rates that also have the benefit of certification, professionalism, and warranty, for example, SolarCity has installed many solar PV systems in California where an all-included installation of 5.8 kW panel costs $25,000, or $4.25 per watt.
Case for DIY Installation
Modern solar panels are sold in simple to install kits, which you can DIY as long as you have a good grip on electricals, electrical tools and measuring instruments like a voltmeter, ammeter, wire stripper, pliers, Phillip’s screw driver, and so forth. As a DIY you can save thousands of dollars, even though you may end up with either an uninsurable installation or higher insurance premiums.
DIY Solar Power at Home
As noted by HGTV, solar power is a green and free energy, which is the answer to the rising costs of grid electricity and home generators. Prices of solar panels are less than half of what they were seven years ago and there are many incentives and financing option that make it an attractive and worthwhile investment. If you still feel the cost is out of reach for a full-scale installation, you can still opt for a scaled-down installation and as a DIY. You can connect small appliances like a pool pump, security and decorative lights, attic fan, an entertainment center, a laptop, a generator, and so on. The popular trend in residential solar panel systems is net metering because the owner is not only able to be self-sufficient but also earn some income out of it.
Can You Build a Solar Panel from Scratch?
For the tech geeks, you can build your own $400, 63 W solar panel from scratch, according to solartechtown.com. You need 36 solar cells costing $105, an inverter costing $140, a junction box costing $20, and a battery costing $125. You need a 4’ x 8’ plywood, pegboard, framing wood, staple gun, cardboard the size of a solar cell, tile spacer, jigsaw or handsaw, utility knife, pencil or pen, and a ruler. Cut the solar cell template from the cardboard. Create a frame around the plywood and screw it down. Sand and dust the plywood and follow it with a UV and weatherproof paint such as Deck and Siding all over the frame and board. As you wait for the frame to dry, assemble the solar cells by stringing them on a copper bus wire and soldering the ends to the cell. The bottom side of the cell is the positive and the top side is the negative pole. Solder the strings to each other in series.
Each cell delivers 1.75 watts at 0.5 volts, therefore you decide how many cells you need. Place the cells in the frame board in the desired pattern and mark the positions to screw the pegboard. Drill two holes at the end of the frame and connect the last wire strings. Glue the individual cells down to the pegboard. You will then draw a 22mm gauge wire from each of the poles to the “Solar” terminals of the charge controller. Then connect the “Battery” terminals to the deep cycle, and finally the battery to the “Input” terminals of the inverter. Test the whole unit out in the sun. If you connect 36 cells in series you should get 63 watts of electricity at 18 volts and 3.5 Amps. Install the junction box along with a protective diode against back current at the pegboard and finally apply a silicon seal all around the frame and junction box. Test the whole system before connecting to the house or appliances. The solar panel will have cost just over $1.65 per watt including installation, compared to commercial solar PV panels that cost $6 or more.
Issues in the Costing of Solar PV Panel System
A potential customer earlier this year observed that the “no down payment” offer by Solar City was a ruse because according to an ad by the company, a 3 kW system would cost up to $100 per month with an annual raise of up to 2.9 percent, and for up to 30 year (solarpowerauthority.com). Considering that the average homestead consuming 5 kW pays between $55 and $80, the $100 for 3 kW is not a great deal. A long payback time of 20 years is discouraging to potential solar panel system owners. Some people feel that the solar companies are exploiting them by inflating the actual cost of the solar panel systems, by pegging it to a payback period. It is good to also know in advance that there are many hidden and sometimes unnoticed costs that negate the switch to solar. In fact the cost of panels is often just a third of the total cost of the solar energy investment. Distribution and connectivity to the grid can cost as much as 50 percent of the total investment depending on the distance to the connection point. The utility companies cover this cost by charging on a per kW basis. As more people rely more on their own green energy, the utility companies will start charging on a per household basis to compensate for their lost revenues, and this will mean paying at least 50 percent of bills for unused power. Your home value will increase by around $20,000 to $50,000 because of the upgrade to solar, which translates to a higher property tax. Another hidden cost is the home insurance which will increase by between $200 and $300 because of the installation.
Comparing the cost of panels, in China, the solar panels cost just $0.60 per watt, in Australia they cost $1.50 per watt, but in the U.S. they cost a whopping $3.50 per watt, despite the fact that all these countries manufacture good quality solar panels. However, the U.S. has put in barriers to imports in a bid to promote the local solar industry. This in turn has made it difficult to make economic sense of going solar. As a way to mitigate the shortfall, the federal government has given a 30 percent tax incentive to homeowners who install the solar panel system.
According to SolarPowerAuthority.com, a New York customer observed that he spent $47,000 to buy a 56 Kyocera 130GT panel with a capacity of 7.3 kW, used NREL and Kyocera recommended standards for installation in Long Island locality, did the install himself as a DIY, and net metered the solar panel system. The system produced 10,000 kW per year since 2006, which at the rate of $0.15 was $1,500 per year. Although he considered it a great investment, some commentator noted that the payback period for the system would be $47,000 / 1500 or more than 31 years. This is 6 years more than the expected maximum lifespan of a solar system of 25 years!
In 2009, the government of the U.S. embarked on an $800 billion solar installation project projected to create 400 billion watts of solar electricity. However, since solar energy is only produced by day, you still need either a backup system such as generators or the grid power, and battery storage. These measures erode the overall gains made in solar electricity production.
When making a substantial investment in solar, it is worthwhile to get several quotes from the OEM and installers and you will be amazed by the differences in pricing. Prepare a request for quotes or RFQ to send to the providers for comparison. Many solar panel systems today are manufactured to be installed as a DIY project. Use a solar panel calculator, for example you can go to https://www.solarpowerauthority.com/calculator/ to work out your local area’s total cost of installation. Small OEM’s are sometimes the best option as they can offer amazing rates that are as low as $1 per watt for the panels and $1 per watt for such associated equipment as inverters, cabling, disconnects, and so forth. AEE Solar Company, which manufactures solar PV systems, installs at a cost of between $1 and $3 per watt. The total cost of having the solar panel system is therefore about $3.50. The major impediment to investing in a solar energy system is the installation, which many people is overpriced. The labor charges work out to between $300 and $600 per hour, which is way higher than the skill level required for the job. As a homeowner, try and get separate quotes for equipment and for installation.
It is also worthwhile to consider the risk of vandalism on the roof installed system, as it easily disassembled. You need to consider an expandable system for such future needs as electric vehicle or EV charging, outdoor lighting, pool heating, air conditioning, and so forth. You have to abide by state regulations, obtain a building permit which costs between $80 and $200, and adhere to NREL standards in order to qualify for the solar rebates program.
Challenges of Solar Installation in the U.S.
High Cost Discourages Installation
At $13,000, the initial cost of installation is prohibitive and is far outweighed by being on-grid. The federal tax credit only benefits the higher income groups, who incidentally need the assistance less. The US fairs poorly in solar advancement among industrialized countries. In 2017 installing one watt in US cost $3.1 compared to China at $0.9, Australia at $1.3, the Middle East at $1.8, and Germany at $2.0 per watt. A 250 watt solar panel costs more than $250 in the U.S. but less than $150 in China for the same quality. The long payback time of solar PV installation discourages some people from investing in the system. It takes at least 6.5 years to pay back in the solar friendlier states, and up to 20 years in some states.
Not Elegant-Looking
The PV panel with shiny glass, jagged arrangement, and non- matching materials and color on the rooftop are not exactly elegant. It reduces the curb appeal of the home unless the home hunter is looking for such an installation. Utility companies surcharge solar users in order to compensate for the lost income from utility bills.
Utility Companies Fighting Back
American utilities are still increasing their cost of electricity for different reasons. For example, the Tacoma Public Utilities or TPU has raised their cost of electricity ostensibly to help finance the increased obligation in conservation and alternative energy efforts, but advocates argue that this is not true since the use of solar cuts out other significant costs like maintenance, upgrades, and so forth.
In Florida, some utility companies are undermining the solar effort. New customers who choose to install solar have to sign an agreement that essentially penalizes them by charging 11c to 14c per kWh of electricity when the standard rate is 6c per kW, which translates to an average of $100 to $150 surcharge per month just because of using solar power. Some other utility companies do not give incentives at all but they do buy back through net metering.
In Colorado, if your solar panels supply more than 90 percent of your energy, the utility company will charge between 10 and 20 times more for the remaining 10 percent you get from them, which totally negates your solar PV effort. In many systems linked to the grid, you are limited to installing solar power to supply no more than 60 percent of your total power needs (EnergySage.com). The state obligates the utility companies to buy back at retail rate any surplus solar energy, which they in turn pass on to other consumers.
Tax Incentives are Discriminative
The 30 percent federal tax credit is not a rebate and so it does not benefit the low-income earners who fall below the threshold tax bracket. Although many utility companies in Florida give up to 25 percent rebates for solar installation, some utility companies are paying consumers at wholesale prices for their excess solar production, and do so by having two-meter systems. Other utility companies are charging consumers a higher rate for solar power supply, although on the positive side this encourages the companies to establish more solar farms.
Recycling Used PV Panels
Used solar panels will need to be recycled after their 20 to 25 year life cycle is over, and toxin chemicals like cadmium will have to be recovered or disposed of safely. Batteries too have poisonous chemicals that need to be recovered or disposed of safely. Recycling and safe disposal are expensive. When the state offers an RE tax break for persons who exceed the federal Star Energy standards, the utility companies tend to block such initiatives because they affect their bottom line. Yet the same utility companies encourage going solar when their own capacity falls short.
Solar Power Ensures Energy independence
Solar energy will not replace fossil fuels any time soon, but it does help to reduce the carbon emission in the environment. The Environmental Protection Agency estimates that each household creates 20 metric tons of carbon pollution annually, but by going solar this reduces to 15 metric tons annually. It also ensures there is less reliance on the polluting fossil fuel power plants, less risk of radiation contamination from nuclear plants, and less environmental degradation by hydroelectric power dams.
According to csmonitor.com, if the state of West Virginia were covered in solar PV panels it could power the entire world for 25 years. An investment in solar helps to save the world’s environment and to make the US more energy independent. As an individual, you play a role in achieving such independence and clean energy when you go solar. The energy market is volatile even to the world’s oil-producing nations, and therefore it is prudent to insulate oneself from such energy-related challenges by going solar.
Trends in Solar Panel Costs
Some panels are more efficient at collecting solar energy, and durable over the years. The premium cell deteriorates at less than 1.7 percent per year whereas the lower quality equipment deteriorate at more than 2.2 percent. A solar panel should be replaced when its output falls below 65 percent, which is between 2 and 30 years of service. EnergySage Solar Marketplace indicates that the cost per watt of installing solar energy has been coming down since 2014, with the cost being $3.86 in December 2014, $3.79 in June 2015, $3.69 in December 2015, $3.57 in June 2016, $3.36 in December 2016, and $3.17 in June 2017.
Besides equipment, you need to also factor in planning, permits, installation labor, and in some cases transport. You also need to pay for connectivity of the solar system to the grid. The roof design can create complications. For example, if the roof slopes to the east-west direction, then you get less energy, therefore you need more panels installed. A south facing 30-degree pitch slope of the roof has the best effectiveness in harnessing solar radiation. A complex roof with skylights, chimneys, dormers, and multiple levels will further complicate the solar installation. Unlike FMG, solar PV products are slow moving and a lot of marketing and pitching is required to convince potential customer. Furthermore, the customer is more often than not a one-off customer, since the product will last from 20 to 30 years.
Cheat Sheet
ROI – Return on Investment
SREC – Solar renewable Energy Certificate or SREC is a tradable certificate that is issiued by the state to people who have installed and use renewable energy.
NREL – National Renewable Energy Laboratory or NREL is a research facility owned by the Office of Energy Efficiency and Renewable Energy, Department of Energy
ASES – The American Solar Energy Society or ASES (1954) is a nonprofit association of solar professionals and advocates
MPPT – Maximum Power Point Tracking or MPPT is an automatic method of detecting the voltage input and adjusting its conversion in order to maintain a constant output voltage. Input voltage depends on insolation.
Sources:
- SolarPowerAuthority.com
- EnergySage.com
- solar-estimate.org
- SolarAmerica.com
- affordable-solar.com
- SolarPowerRocks.com
- NewTownBuilders.com
- HGTV
- Energyinformatives.org