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How to Calculate the True Cost of Solar Panels
This post was originally posted here: How to Calculate the True Cost of Solar Panels
Unless you’ve been living under a rock for the past ten years, you’ve probably heard of solar panels. But recently, you may have heard even more chatter about this potential energy source. With the environmental and financial cost of other power sources going up and solar panel cost going down, it isn’t surprising that they’ve exploded in popularity in the last few years. In fact, in 2010 alone, there were 17 gigawatts installed – equivalent to the amount of energy produced by 17 nuclear power plants! When you consider the fact that the estimate for previous years’ solar panel installations is just 30 gigawatts combined, this number is even more impressive.
Source: http://solarpowerrocks.com/affordable-solar/solar-power-is-exploding-getting-cheaper/
But even with the price of panels dropping, you and many other people may continue to hold the belief that this system simply isn’t worth the expense and that even if you wanted to, you couldn’t afford solar panels for your home. But, one Maryland photovoltaic company is here to tell you not to be intimidated by the sticker price of a solar panel system. The true cost can be much lower than you think.
Upfront Cost
Take Maryland, for example: A system of 5kW can cost $25,000. Seems like a lot, right? Well, take into account the 30% federal initiative ($6,000), and a Maryland state initiative of $500 per kW ($2,500), and the price is already down to $16,500! Added onto these discounts are local initiatives, which can vary but average about $2,500. So, the initial cost of installation could end up being $14,000. Still a hefty sum, but definitely nothing like the original, “on paper” cost.
Long-Term Return
Then you have to consider the long-term effects: The average cost per kilowatt hour in Baltimore is $0.15. If your system generates 6,600 kWh, then you’re in for a savings of $990 per year, plus another $1,980 in Solar Renewable Energy Certificates that you can sell back to the power company. Think about that for a moment: they pay you for the privilege of using energy generated by your solar power system. Starting to sound good? So, if you’re raking in $2,970 every year thanks to your solar panels, it would take only 4.71 years for it to be completely paid off! Everything after that is money in your pocket. With the average lifespan of solar panels sitting at about 20 years, that means an extra $45,411.30. Not too bad, eh?
Bonus Round!
But wait, the financial benefits aren’t over yet. Adding solar panels to your home also gives it a higher resale value. In fact, an ICF Consulting study estimates that you’ll get $20 added to its value for each $1 you save a year in energy costs. If you’re saving $990 a year, that’s an extra $19,800 when you go to sell your house – more than the whole upfront cost of the system.
Okay, okay. You probably get it now: the ROI on solar is high. Ready to learn more? Contact a photovoltaic company near you and ask about their solar panel systems and rebates. You might be surprised at how easy – and affordable – it is to harness the power of the sun.
Sam Matthers is a home improvement writer who focuses on green living and tips for making homes more energy efficient. If you are considering solar panels for your home, here is some information to help you estimate the solar panel cost.
Read more at Talking About Green
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