Not long ago the only person who would think about putting solar panels on their home and ditch their electric utility company was someone who either didn’t like their utility company, wanted to reduce their carbon footprint, or both. Now the cost of renewable energy has transitioned to a lower cost of energy than the typical power cost of utility supplied electricity. Is it time for you to consider solar panels to save money on your monthly expenses?
For 2018 the average homeowner used 914 kWh and paid $117 for electricity per month. That equates to 12.87 cents per unit of energy or kWh. That cost for electricity was more than 28 cents in the New England area and nearing 16 cents on the west coast of the United States. A huge variance depending on where you live and your local utility provider’s pricing structure. The cost of electricity has steadily risen over the years and is projected to continue as demand goes up and infrastructure maintenance costs rise.
Those homeowners who don’t qualify for any subsidized electricity rates from their provider will find themselves to be far above the average cost in their area. If you are a homeowner who may qualify for a lower rate due to financial hardships, your first stop should be to check with your utility company to find out more as this could provide immediate savings.
We know our electric costs are getting higher every year, but what exactly does solar cost instead?
This will be determined by five factors: location, equipment, financing, system size, and the installer.
The location of your panels is important. Are they going to be in an area that gets full sunlight? The more hours of sunlight that reach the panels will produce more energy, making your system more efficient. If you need to build a ground mounted structure of some kind it will cost more than placing it on your roof that is already built out. If you want a commercial structure such as a carport for parking vehicles under it will cost more than a simple ground mount designed just to hold the panels a few feet off the ground.
The old adage “you get what you pay for” applies heavily with solar equipment. Any technology that advances at a quick pace quickly becomes obsolete. Just like you shouldn’t shell out big bucks for a five year old smart phone or laptop you should be hesitant to save a few bucks getting antiquated solar technology. New panels produce more power with less sunlight, last longer, and degrade slower. Recent advances in inverter technology works more efficiently and optimized tracking software neatly ties everything together.
There are three ways of paying for a solar system. If you wish to own the system you can choose to take on a loan to pay for the system, but will be required to pay bank fees and interest over the term. If you pay for the system with cash outright you will need to cover all of the costs involved up front by the time the installation is complete. Finally for those who don’t want the hassle of ownership and just want to pay less for electricity by essentially switching their provider there are leases and power purchase agreements (PPAs) that let you pay a reduced cost for the electricity that is provided by the solar system which is owned by the company.
The larger the system, the more material and labor will be required for the job. While this does make the cost higher, it also typically means there is more money being saved from the old electric bill. To find out how big of a system you will need, you will have to have your electricity usage analyzed for at least one whole year in order to discover your home’s energy needs during the different seasons. Expect an average house to be somewhere around 25 panels depending on the panels power capabilities and sunlight falling on the panels. You can have this done here.
The final variable is the installer. If you are dealing with a large corporation expect a higher premium to be paid as the costs of the organization get passed down. Large operations require a huge investment in staffing, advertising, office, and management costs that a smaller installer doesn’t have to deal with. Remember that no matter who installs your equipment, if it is installed by a licensed company it will have the same manufacturer warranty backing.
These factors will play a significant role in how much your system costs, but if the stars line up perfectly for your situation you can easily enjoy a solar system electric cost in the very low teens and sometimes even into the single digits of cents per kWh or unit of electricity. As opposed to the national average of almost 13 cents years ago this is a huge win for the modern homeowner looking to reduce a huge household expense. Not only will you be able to enjoy a lower cost for your electricity but you will be spared from much of the rising costs of future electricity rate hikes. Furthermore, if you choose to own your system your loan will have an end date meaning at some point you will be left without a solar system bill completely saving the average homeowner over $100 a month.
Check out our website to price out a sample system anywhere in the United States.
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