Is Solar Energy Really Cost-Effective? – Overview
Although solar energy is the oldest type of energy, it has yet to be harnessed. There has been an increase in solar energy generation projects due to growing concerns about climate change. Many people are unaware of the many benefits of solar energy, and there are many common questions. The cost-effectiveness of solar energy is one of the most common questions.
We will attempt to dispel myths and present facts regarding solar energy, its benefits, and whether it is actually cost-effective.
Solar Energy for your Home
It is much cheaper to get the power directly from the source than to pay the utility company to deliver it to your home. Solar power is much more cost-effective than conventional electricity. According to the World Economic Forum (WEF), installing solar panels is less expensive than investing in natural gas, coal, or other traditional fuels.
Let’s say that you have solar panels installed at your home. Let’s now take a closer look into the causes and effects of this decision.
Let’s begin with solar panels. The theoretical output potential of solar panels is rated according to the watts they produce. The actual capacity factor, which is the regular output of solar panels when they are installed, is between 15% to 30%.
A residential solar energy system producing 3 Kilowatts per hour (kWh) at a 15% capacity factor would generate around 3,942kWh annually. This would be roughly 1/3 of American households’ average annual energy consumption.
Results can vary from one household to another, however, and for different reasons. A household’s viability to go solar depends on many financial and practical factors.
Solar Power Costs
Solar power is capital-intensive, which means it requires significant investment in fixed assets. The majority of the expense comes at the time that the equipment is purchased. The most expensive component of a solar power generation system is the solar module.
Solar-generated electricity is often stored by homeowners. This requires purchasing storage batteries. It is cheaper and easier to just transfer the extra output to the power grid and then pay for the utility. Storage batteries are expensive and difficult to install.
You must also consider the cost of operating and maintaining solar power equipment. You will need to clean the solar array regularly. Inverters and battery maintenance should also be taken into consideration.
The government provides subsidies for homeowners who want to use solar power. This can help to reduce the cost of solar power generation. The average US government tax credit for solar power system installations is 30%.
It is possible to verify the economics of solar power systems.
If you wish to know the specific details and find out how cost-effective a solar power system for your home would be, we urge you to visit the Database of State Incentives for Renewables & Energy (DSIRE) website. International readers can also find information and benefits about installing solar panels at home through government websites or solar advocacy sites. Homeowners should also contact their utility provider to find out about the incentives and offers for solar power systems. Many utility/electricity companies permit grid interconnection. They often purchase excess electricity from your solar power system and then transfer it to the grid.
Solar Power Home Benefits
Let’s now look at the costs of installing solar power. We will also examine the benefits of solar energy for homeowners and see if it is cost-effective.
1 – Cost savings
Rooftop solar panels offer homeowners the greatest benefit: cost savings. As compared to conventional utility rates for industrial and commercial settings, the cost of solar power through rooftop solar panels is cheaper by 17% and 27% respectively. Solar panels can also reduce electricity costs for homeowners. They replace the need to purchase electricity from the grid. This saves on utility costs.
2 – Secure investments
Electricity costs fluctuate frequently. It is difficult to forecast the exact cost of electric usage over time. The cost of producing power with rooftop solar panels can be calculated easily. Solar power panels can be a very secure investment because they can forecast the cost of electricity generation/usage over the years.
3 – Greater access to energy
Despite having a power grid that spans the country, some areas are still not covered by utility companies. This is even though the grid covers the whole country. These areas force homeowners and businesses to use diesel generators to produce their power. This is not only costly but also harmful to the environment. Solar energy is a cost-effective and easily accessible source of energy that can be used in such areas. Solar panels can be used in any climate and weather conditions.
4 – Government subsidies
Solar power has another major advantage over traditional power. The government offers tax credits and subsidies to homeowners and businesses who want to install rooftop solar panels. In some states, the government will cover up to 30% of the cost of installing solar power systems.
It is now that the urgent need to fight climate change is clear, and it is time for a major shift towards renewable energy sources. The most efficient and abundant source of renewable energy is solar power. It is also very cost-effective to switch to solar power as a homeowner, in addition to being environmentally friendly.