Have you recently decided to make the switch to solar energy? Good for you! As you begin researching your options, one of the main questions you are probably asking is “how much does solar energy cost?” When considering this question there are several factors to take into consideration, which we will discuss below.
How much are the solar panels?
The first, and most obvious, factor to consider when beginning your solar research is how much the solar panels cost. The cost of solar panels varies based on the size of the system you choose, which will be based on how much power you want to generate for your home. The average residential system typically ranges in size from 3 kilowatts (kW) to 8kW, depending on house size and energy needs, which can end up ranging anywhere from $15,000 to $40,000 before federal tax credits.
The good news is that federal tax credits can save you up to 30 percent on your initial solar panel purchase, and many local and state governments also offer other incentives that can save you, even more, money on costly upfront purchases. Energy Sage calculated the total cost for a variety of solar energy systems in 2015 after tax credits, finding that a 6kW solar panel system cost $15,000 on average, while an 8kW system rang in at about $20,000, with a 10kW system totaling approximately $25,000. Now that is some serious savings!
How much are the installation costs?
Another important factor to think about when calculating your solar energy budget is the cost of installation in your area. When considering these costs, be sure to include both the cost of labor as well as the cost of inspection fees and any permits that you will need to obtain. Some of these installation considerations include any electrical or building permits needed from the Department of Buildings, HOA approval, and any neighborhood rule requirements. Similarly to the cost of solar panels, these costs will vary depending on where you live. However, experts say to budget approximately $2,000 to $5,000.
When calculating installation costs you should also consider if you need any roof repairs, or even a roof replacement. Since solar panels typically last for a minimum of 20 years, the hassle and cost of removing your panels in the case of any roofing repairs should be considered. In the end, it may be easier to take care of any potential roofing issues BEFORE the installation of your solar panels to save money (and a lot of extra work) in the long term.
How much will solar panels save you?
The final factor to consider when calculating how much solar energy costs, is estimating how much it will save you in electric costs over their 20+ year lifespan. Like both panel costs and installation costs, this amount will vary widely depending on where you live. Research has found that the 20-year savings for homeowners in Boston are approximately $38,000, while households in Los Angeles are calculated to save an average of $22,000 over 20 years. Finally, Portland, OR homeowners are calculated to save $43,000 on average during a 20 year period.
No matter what your savings are over this 20 year period, homeowners within the U.S. can typically break even on solar power purchase and installation investments in an average of 7.5 years, with cities including Washington DC, Boston, Seattle, and Portland all reporting payback periods that were a maximum of four years, with many even lower.
When calculating how much solar energy costs, it is important to consider three main factors including the initial cost of the solar panels, any installation costs, and the savings over the lifespan of your solar energy system. Interested in learning more about how solar panels work and how they can save you money in the long run? Contact us today, or check out our answers to common solar energy questions.