Powering a House with Solar Panels, Will It Pay Off?
Solar energy is enjoying unprecedented growth in the country. Studies show that one solar power system is installed in the US every 100 seconds, and the figure keeps growing. In 2019, the US had over 77 gigawatts (GW) of solar photovoltaic (PV) capacity. That’s enough solar electricity to power more than 12 million homes across the nation.
As the cost of this renewable energy keeps falling, the decision to go solar has almost become a no-brainer. It makes so much sense in the light of ever-increasing electricity prices and the escalating threat of climate change.
However, acquiring a solar panel system requires a hefty investment; thus, there’s a need to determine not only how much you’ll be spending but also how long it will take to get a complete return on the money you put down.
Residential Solar Energy System
Various ways to use solar power for homes exist. However, a solar panel system is what most people associate with solar energy.
A solar energy installation catches the sunlight and uses it to produce electricity. The cells on the solar panels absorb radiant energy from the sun’s rays while the circuits within the cells process that energy and transform it into direct current (DC). That current passes through a device called an inverter, which turns DC into alternating current (AC), the form of electricity households needs
The excess energy produced by the energy system can be stored in a battery or sent back to the grid.
Several types of equipment go into a home solar system.
The solar panels are the key components of the system. The solar cells encased in the panels harness the sun’s energy and transform it into electrical current. Metal conductors and anti-reflective coating on the glass surface of the modules help turn sunlight into usable energy.
The most common types of panels in the market are monocrystalline and polycrystalline solar panels, with their main differences being in efficiency and price. Monocrystalline panels are generally more efficient than their polycrystalline counterparts, but they are also more expensive
An inverter is another integral part of a solar panel installation. The solar panels catch radiant energy and convert it into DC. However, household appliances run on alternating current, so the inverter of a solar system turns DC electricity into AC.
Inverters come in different types. String inverters link all the solar panels together and convert the solar power they generate into electricity. Microinverters, on the other hand, are individually attached to each solar panel. Like microinverters, power optimizers are also installed in individual modules, but they don’t turn the direct current into alternating current. Instead, they maximize the DC produced by the solar panels before sending it into a central inverter.
Mounting Racks (Fixed or Adjustable)
Mounting racks are used to install solar panels on the roof. The racks not only hold the PV arrays in place but also help ensure that the solar panels face the correct direction and have an appropriate tilt so they produce the maximum energy as they are exposed to the highest intensity of sunlight for the greatest period of time.
There are two kinds of mounting racks. Fixed racks install solar panels at a set or fixed angle, while adjustable racks can be moved to follow the sun’s trajectory as it traverses the sky.
Most solar power systems in the country are grid-tied. That is, they remain connected to the utility network. During times of peak production, when the solar panels generate more electricity than what you use, the surplus power goes back to the utility grid. On the other hand, when the power production of the solar system is less than the household’s requirements, you can draw electricity from the grid.
Solar batteries work by storing the excess power from the solar panels instead of sending the surplus energy back to the grid. During times of peak production, the extra power generated by the solar system charges the batteries. Thus, when the panels are not producing electricity, you can use the energy stored in the batteries for your electricity needs.
Pairing your solar power system with batteries can help maximize the benefits you get from using renewable energy from the sun. However, a battery is an optional equipment, and even without it, solar systems will continue to function
The Cost of a Residential Solar Energy System
At a first glance, going solar seems like a financially challenging proposition. But you can recoup the money you spent for your system through the money you save over time by using solar energy.
So how much will it cost you to install solar panels? There’s no quick and easy answer because the total price of residential solar systems varies depending on several factors. These include:
- The size of the solar power system: How many solar panels you’ll need depends on your home’s power requirements.
- The type of solar panels you’ll use: The quality and wattage of the modules will naturally determine the price, with higher-efficiency solar modules being more expensive.
- How much electricity you require: If you depend on your solar panel installation for all your power needs, the energy system must be large enough to cover your requirements.
- Connection to the utility grid: Most homes remain tied to the utility grid in an on-grid system, while some severe the connection and go off-grid. What type of system you prefer will affect how many solar panels go into the installation. On top of the additional number of panels for an off-grid system, you’ll have to factor in the cost of the batteries that will store the excess power your PV arrays produce. You’ll need this stored solar power for later use when your installation isn’t generating enough electricity.
Now, let’s look at the price of the other equipment that goes into a solar panel installation.
Solar panels are measured in watts, and their price is calculated in dollars per watt. The average cost across the US in 2021 comes to around $2.76 per watt. That adds up to about $16,500 for a 6 kW system.
Higher efficiency solar panels cost more compared to their average efficiency counterparts. For example, an ordinary 360-watt panel can cost around $150, while a higher-efficiency one can carry a $300 price tag.
If you want to maximize the benefits of using solar energy, pairing your installation with solar batteries for energy storage is the way to go. However, this entails additional costs. The more common types of batteries for a residential solar panel installation are made of lead-acid and lithium-ion.
Lithium-ion batteries typically cost around $7,000-$14,000, based on the size and quality.
Average-sized inverters usually range between $1,000-$1,500. The price increases as your solar panel installation get bigger.
Overall costs of a solar system
Most homes in the country require a 10-kilowatt solar system, which means you can expect your solar panel installation to cost around$19,300 after deducting the 26% tax credits.
What’s the Solar Potential of My Home?
Before joining the two million-plus US households who’ve gone for a solar power system, it’s essential to establish if moving ahead with your plan would let you enjoy the full benefits going solar brings. Mapping services and tools will help determine your home’s solar potential, but some variables are unique to your situation. Reputable solar companies can provide you with a more detailed assessment and recommendations that fit your specific needs.
In assessing if a solar installation makes sense for you, consider the following factors:
- Your electricity bill: If you live in a state with high electricity prices, you stand to gain by using solar electricity. That’s because even with the high upfront costs of an installation, you’ll still save on your energy costs over time.
- The climate in your area: Electricity generation from solar panels differs in different climates. Knowing the weather conditions of your area is valuable for calculating the amount of energy your system would generate and identifying what panels to use.
- Your roof: The area available for rooftop solar panels will affect the size of your system and its output. If your roof is nearing the end of its life, it’s best to replace it before installing your system. This eliminates the need to uninstall and reinstall the panels in case the roof needs repairs later on.
- The immediate environment: Solar panels work best in full sun conditions. Shadows cast by trees or other structures can reduce the electricity generated by your solar power system.
Even if your home doesn’t meet all the criteria, solar companies can usually work around the hindrances and design a solar power system that will let you save hundreds of dollars over the years.
Available Options for Acquiring Solar Energy
One of the obstacles to going solar is the high initial costs of solar panel installations. Even if their price has fallen significantly over the years, residential solar panels don’t come cheap.
Fortunately, due to other available means of acquiring a solar installation, you can still use the power of the sun even if you’re short on cash. Furthermore, switching to solar energy entitles homeowners to incentives and rebates that soften the initial economic impact of this renewable technology.
- Federal investment tax credit (ITC): The ITC lets you deduct 26% of the price of the PV system you installed in your home.
- State tax credits: These work much like the ITC and let you subtract a specified amount from your state taxes.
- Solar Renewable Energy Credits (SRECs): If you live in a state which has legislation requiring utilities to produce a certain percentage of their electricity from green sources like wind and solar, your PV system will generate SRECs for its energy production. Every 1,000 kilowatt-hours that come from your solar system earns you 1 SREC, which you can sell or keep.
- Cash rebates: Some states, municipalities, utility companies, or organizations that advocate the use of solar energy sometimes offer cash rebates for the purchase of a PV array. These cash rebates can further reduce the cost of your installation, in some cases, by as much as 10-20%.
- Net Metering Program: You can export the excess power your system generates back to the grid if your local utility company has a net metering program. In return, you’ll earn a kilowatt (kW) credit on your utility account. You can use those credits when your solar arrays don’t produce enough electricity, and you need to draw power from the utility network.
Purchasing your Own Solar Energy System
Paying cash upfront is the best way to get the most savings from going solar. But if your budget is tight, you can consider other available options to help you achieve your goal of relying on solar power for your electricity consumption.
Community solar could be the way to go for those who can’t install solar on their property. Community or shared solar refers to solar facilities shared by subscribers. The members get the electricity they need from the solar installation, and it offsets the energy they draw from the grid.
A solar lease is like renting your PV installation, where you enter into an agreement with a solar leasing company for the use of a solar system. In return, you pay a monthly fee to enjoy the benefits of the solar electricity produced by the installation.
Solar Power Purchase Agreement (PPA)
A Solar Power Purchase Agreement or PPA is similar to a solar lease where you incur monthly charges for the electricity you draw from the energy system. However, with a solar lease, you pay a monthly fee for using the energy system, whereas, with a solar PPA, you pay a fixed rate per kilowatt-hour for the power the solar panels generate.
Some people confuse solarize programs with community solar. But they are entirely different forms of solar options. With shared solar, community members subscribe to a solar array installed in the area. Meanwhile, a solarize program encourages people in the community to install solar panels on their homes to save money. The savings come from discounts for bulk purchases from one solar installer for all the homeowners in the community who opt to go solar.
Advantages and Disadvantages
Solar energy offers plenty of benefits but it also has some drawbacks.
The top benefits are:
- It lowers your carbon footprint.
- It saves you money.
- Your property’s value increases.
- You get to avoid increasing electricity rates.
- You earn money on your investment.
Meanwhile, the common disadvantages are:
- It requires hefty capital.
- Not all roofs can accommodate solar panels.
- Some locations aren’t suitable for solar energy.
- Solar panels may impact your home’s aesthetics.
- You’ll have to deal with the panels if you move.
How many solar panels do I need for 2000 kWh per month?
If you typically consume 2000 kWh per month, you’ll need a 14.34 kW PV system. How many panels you need depends on the power output of the PV panels. On average, 39 PV modules of 375 watts will cover your requirements. If you use 315-watt panels, you’ll have to purchase around 46 solar arrays.
You can get a more accurate figure by using an online solar cost calculator.
Does an inverter turn off at night?
The inverter powers down at night because there isn’t enough light to convert into electricity. It turns back on in the morning when the sun shines.
What happens after installing solar?
The final step in switching to solar is that long-awaited moment when your home starts producing clean, green energy for your personal use. But before that, the solar power system you installed must pass inspection and approval from your local utility company and local officials in your area. It is their job to double-check everything; if the electrical wiring was done correctly, the panels are safely attached to the racking, and the system is complying with the electrical and roof setback codes.
Once the officials give the go-signal, your system will be connected to the grid. After that, your home becomes the latest addition to the growing number of households powered by the sun.
Do you still pay electricity bills with solar panels?
You’ll still get electricity bills after your solar array is up and running, even if your installation’s size meets all your energy needs. However, how much electricity you use will determine if you’ll still pay electricity bills after your system is up and running.
If you remain tied to the grid and draw electricity from the electric network when your energy system doesn’t produce enough electricity, you’ll be charged for the power you use. Net metering, which is available in most states, will reduce the amount you’ll pay or even eliminate all charges if you earn enough credits.
The solar market is continually expanding. Homeowners are shifting to solar energy for financial gains and a greener Earth. As awareness about the benefits of using renewable power increases, more and more households will see the wisdom of using the sun’s energy for their electricity needs.
A solar-powered home enjoys many benefits. So even if installing an energy system seems like a daunting task, the advantages outweigh the challenges acquiring an installation presents. As such, the chances are high that the adoption of this renewable technology will experience further surges. More so as solar prices continue to drop and the threats to the planet due to climate change become more evident.