One of the first factors that holds anyone back from jumping on the solar bandwagon is the initial price and the presumed cost of installing this renewable technology. Many people ask themselves ‘Why Is Solar Power So Expensive?’. In this vein, the National Renewable Energy Lab (NREL) has decided to analyze and classify the costs involved in residential solar installations. In essence, the NREL looked at the relationship between the price of your solar energy system and the total energy, or number of watts, it can produce. Known as the cost per watt, this is broken into smaller subcategories to identify where the costs come from and weigh them against the benefits and savings these systems generate. What follows is a look at these subcategories to identify the costs you might expect from installing a new solar energy unit and where they come from. While your initial investment into solar power may seem a little steep, the long- and short-term benefits of solar panels, both for you and for the earth, are very much worth it.
Know the Market
- Educate yourself on solar: Installers spend a great deal of time and money educating consumers on the benefits and options presented by solar energy systems. You can make it easier for your installers by accessing publicly available resources, such as the Dept. of Energy’s website, to answer any questions or concerns you may have. The more educated you are about your options, the more time and hassle you can save yourself and your installer.
- Compare products for a deal: Comparison-shopping websites are increasingly popular when booking flights or hotels, making the necessary research and decision-making process much easier. Similar tools have been introduced into solar shopping. Using an online solar marketplace to gain competitive bids from multiple installers can lower the ‘soft costs’ incurred by installers – savings which are passed on to their customers.
Know your Hardware
- Panels: Solar panels use either polycrystalline or monocrystalline cells to absorb the energy of the sun. Available in economy, standard, or premium performance categories, the most efficient panels often prove to be the most expensive. It is important to understand your home’s specific needs, as you probably don’t need the most expensive option.
- Inverters: Solar panel inverters make up about 10% of your total costs but are integral to the function of your solar system. There are three types of inverter; centralized inverters, string inverters, and power optimizers, with centralized proving least efficient but most affordable. Working to convert direct current (DC) to alternating current (AC) electricity and controlling your on/off status, the inverter is among the most important parts of a solar panel.
- Racks and Mounts: Solar panels are connected to your roof or the ground via racks or mounts. Both racks and mounts allow for precise and secure positioning of your solar panel and will vary in price depending on ease, durability, and the type of surface to be applied to.
- Monitoring Technology: Some solar panel systems come equipped with performance monitoring and tracking technology which allows you to keep track of your system and know exactly how much energy you are generating. This is most common in ground systems and can increase your complexity and costs.
The Cost of Complexity
The cost of solar panels has decreased continuously and drastically in the past 40 years, equaling $76 per watt in 1977 versus roughly $0.65 in 2016. Due to the importance of cost per wattage, there is a distinct chance that the most expensive option may not be the right choice for you. It’s important to understand the specifics of the product, from its monocrystalline or polycrystalline solar cells to the type of inverters, racks and mounts, or monitoring technology which impact the suitability of each product to your needs.
- Complex Roofs: If your roof has multiple levels, an unusual angle, dormers, or tile/slate shingles, the installation of your solar panel may be more complicated than you expect. Your installer will position the panels for optimal energy production, but the added complexity and effort required can increase your costs.
- Landscaping: Shade is among solar power’s greatest enemies, so you may find yourself from time to time needing your trees trimmed to optimize your panels’ production. This can increase your costs as well, so it is always wise to consider doing these sorts of jobs yourself if possible.
- Upgrading Your Electrical System: Though not likely, your electrical system may require an upgrade to be brought up to code prior to the installation of your solar system. You are encouraged to do so beforehand to minimize complexity and cost. By taking just a few simple steps, you can significantly lower your costs, which means that your solar energy system will break even and increase your savings before you even know it.
- Equipment Costs: When determining the cost of installing solar panels onto your home, there are a few factors to consider:
- Your home’s average energy consumption: Each home consumes a unique amount of energy; it is important to know your needs before any upgrade
- Your home’s environment: The performance of your solar panels can be impacted by a number of factors, including the amount of sun they receive per day, frequency of sunny, rainy, or windy days, temperature, and the strength of wind which might kick up dirt and other debris
- The efficiency of your panels: Though the highest recorded efficiency was 42.8%, the average system’s is much lower. Your panels’ efficiency is vital to the determination of how many you require and how costly your system is.
- Warranties: From the workmanship to equipment, a warranty can protect your investment and ensure that you get the most bang for your buck. Be sure to hire the right installer, at the right price, with the right warranty to ensure the quality and budgetary responsibility of your system.
- Efficiency: Despite all the advances in recent years, solar panel technology is still far from fully-efficient. With average efficiency around 25%, there is a lot of solar energy going to waste, which scientists and engineers are working to improve. Until then, however, it is vital to maximize your products’ efficiency to optimize cost-effectiveness and productivity.
- Investment vs. Pay-Off: Despite the advancements witnessed in recent years, solar panel systems today remain expensive and labor-intensive to install. Until new technologies such as solar shingles come into widespread use, the purchase of your solar panels will remain a substantial initial investment. With the prospect of these products paying for themselves in savings over the years, however, it is just a matter of time, efficiency, and your home’s location as to how long it takes before this investment pays off.
- Location, Location, Location: The success and usefulness of your solar panels is largely dependent upon the environment in which they are located, with an overcast or rainy area proving less fruitful than, say, Florida or California. Similarly, the shade provided by buildings in an urban environment and the intensity and consistency of wind can prove significant factors in the functioning of your solar product.
There are, then, many factors which play into the cost of your solar panel system, with efficiency, location, and environment among the key variables in determining your ultimate costs and the effectiveness of your system. This renewable source of energy, though having great potential, remains in its early stages of implementation and as a result is very easily effected by shade, weather, even the angle of your panel. When considering the investment into this exciting technology, it is important to take each of these factors into regard as they will determine the position, number, and type of solar system that might best suit your needs. If you live in an especially sunny area with minimal obstructions, you will likely see a return on your investment very quickly, but others in consistently-overcast or obstructed areas may struggle to see such returns.
Know your costs, know your situation, and use all of the information available to determine whether solar power is right for you. Some of you may want to transition into solar, perhaps testing your home’s suitability to using the sun’s energy through a smaller though still effective use. An excellent example of such an application is through the installation of solar security lights, which will charge during the day and illuminate at night and can give you an excellent idea of how well suited your location is to absorbing solar energy.