Are Solar Panels Cost Effective?
Auto Beauty Business Culture Dieting DIY Events Fashion Finance Food Freelancing Gardening Health Hobbies Home Internet Jobs Law Local Media Men's Health Mobile Nutrition Parenting Pets Pregnancy Products Psychology Real Estate Relationships Science Seniors Sports Technology Travel Wellness Women's Health

Are Solar Panels Cost Effective?

The cost of solar panel home systems are coming down, but you should do some careful math before making such a large purchase.

Using some simple math, you can calculate whether or not a solar panel electricity generating system will provide a profitable return over its useful life.  The "go green" alternative energy trend is pushing consumers to spend their money and save the environment and their own wallets, but many citizens do not realize that there are a ton of factors to consider before committing to a significant purchase like a solar panel system. Some of these things include the cost of the energy system, the amount of power it generates, the number of years it will last, the cost of energy in your area, whether you can sell surplus electricity back to your power company, and the installation and maintenance cost of the system. Also keep in mind that both the federal and state governments have sponsorship programs in place, and the amount of money that the government will match or give toward a solar system purchase varies frequently.

Solar systems currently have a warranteed endurance of about 25 to 30 years (see the bottom of the link: http://www.affordable-solar.com/sharp-ND-U230Q1-230-watt-solar-panel-pallet34.htm). Most solar cells begin to degrade slightly by this point. The efficiency of the photovoltaic cells is gradually increasing, but systems currently available for purchase generally have an efficiency of 10% to 16%. What consumers shoudl be aware of while considering a solar system purchase is that the vendors are like car dealers in that they are highly motivated to sell, and they are likely to push a list of skewed figures in your face in order to force a sale. You must compare the offered statistics to your own in order to to make a judgement call. Also, keep in mind that if you make the poor decision to finance the solar system, you have to factor in the added cost of the financing. If you want to go one step further, you can consider what potential benefit you could have had with the money spent on the solar system (such as interest earned from long term investments or avoided by paying credit card debt).

In Georgia, electricity costs ten cents per kilowatt hour for the year 2010 (http://www.eia.doe.gov/electricity/epm/table5_6_b.html). Georgia also gets an average of 3,000 hours of sunshine per year (http://maps.howstuffworks.com/united-states-annual-sunshine-map.htm). The Sun Set: Complete 5.3 kW Grid Tie Solar Kit costs about $23,500 and delivers 5.3 kilowatts peak power (http://www.spheralsolar.com/products/Sun-Set%3A-Complete-5.3-kW-Grid-Tie-Solar-Kit.html). With a tax credit of 30% from the federal government, the system could cost as little as $16,450 (http://www.mydollarplan.com/solar-energy-tax-credit-will-you-install-solar-panels/). Over a year, the system will generate approximately 15,900 kilowatt hours and potentially save as much as $1,590 dollars since the Georgia cost is ten cents per kilowatt hour. This means that the system could potentially pay for itself in as little as 11 years, with a realistic assumption of 16 to 20.

Is this a worthy investment? Only you can decide that. One great benefit to a solar system is that it is a relatively carefree fire and forget idea (unless, of course, a tree falls on your panels). You should remember that solar panels are not a reliable source of grid power, and they can only serve as an auxiliary. They are also only profitablle to power companies at plants through the use of large economies of scale in high sunlight areas.

Shopping online? Find the latest coupon codes for learning brands and score big discounts on your favorite brands. Shop through our partner network for the best discounts on popular learning stores with exclusive discounts, site-wide promo codes, and single-use codes.
Need an answer?
Get insightful answers from community-recommended
experts
in Energy Science on Knoji.
Would you recommend this author as an expert in Energy Science?
You have 0 recommendations remaining to grant today.
Comments (6)

sounds like it isn't worth the expense for me, i always wanted to know this, thanks

Lots of states are instituting incentives for installing solar systems. In Arizona, for instance, the panels were sold to me at half price (50% rebate), installed for free by technicians from the University of Phoenix, and the local elect utility company gave be a reduction on my elect bill for 6 months just for installing them. Plus, the panels heated my water and covered a big portion of my monthly elect bill. I've heard of other states offering similar deals.

Very well researched article Dustin. Solar panels I find are not an inducement to me due to living in Florida, with all the torrential rain and hurricanes, I would worry about the panels on the roof breaking with all the debris. I'm trying however, to live as much "off-grid" with passive energy conservation but I sure like the idea of solar panels otherwise. I have two small ones that don't handle much by the way.

Maxim Amiti

Few corrections:

1. There are 40% efficiency solar cells not 10%-16%.

2. In my country (more than 300 sunny days), you buy from the electric company 1KW=14cents, when you sell 1KW= 44.4cents.

that up to 5300$ income. beyond that the Tax kill the idea.

3. Cost is (check auctions i.e) 10% of that: 4KW=~2500$.

you can save even more if you buy & join 1KW kits.

the price is for self installation.

Cons:

The govrement let ALL the citizens product only 15MW which run out in few months.

for me - no place for the system :-(

Maxim Amiti

Few corrections:

1. There are 40% efficiency solar cells not 10%-16%.

2. In my country (more than 300 sunny days), you buy from the electric company 1KW=14cents, when you sell 1KW= 44.4cents.

that up to 5300$ income. beyond that the Tax kill the idea.

3. Cost is (check auctions i.e) 10% of that: 4KW=~2500$.

you can save even more if you buy & join 1KW kits.

the price is for self installation.

Cons:

The govrement let ALL the citizens product only 15MW which run out in few months.

for me - no place for the system :-(

deepsea driller

Hey, I have a 4.6kW system in RI. I'm a consultant in the offshore drilling bizz so I know how to pull on a wrench so I self installed it.

The system supplies our house all year long and I get about $25/month check for the electric I put into the grid. The system cost $16k so...at the "PRESENT" rate/kW it will pay off in about 15 years. Like I said PRESENT electric rate..Does anyone think that power will get cheaper in teh future..I think NOT.

ARTICLE DETAILS
RELATED ARTICLES
RELATED CATEGORIES
ARTICLE KEYWORDS