Solar Costs Aren’t as Confusing as It Seems

Ashleigh AngellOctober 12, 2018 1954 0

Solar Costs Aren’t as Confusing as It Seems

To many, the price of solar panels is a mystery an increasing number of homeowners are weighing against the cost of their power bills. Much like electric cars, solar panels once appeared "alternative," but are now rising into the mainstream. There have been a lot of recent developments in the technology, bringing the expense of solar panels down. And with the encouragement of lower energy bills, it's no surprise that many homeowners are curious about adding solar panels to their houses. But how much do solar panels cost, and how much do they help the solar panel consumer save you in the long-run?

Solar costs depend on multiple variables.

What you'll pay for solar panels deviates by your state and the dimensions of the solar panel system. The more energy you want to produce, the more solar equipment you'll require. Normally, solar panels will fetch you $3.70 per watt. This indicates the average-size 5-kilowatt solar system would appear to be about $18,500. This may seem pricey. But that price tag could end up being much less when you calculate in the many government incentives supporting homeowners to invest in them.

Get a lower cost on your system with tax credits and rebates.

One significant way to reduce solar panel installation prices is a 30% federal investment tax credit, which is currently lowering each year and will be gone by 2022. States also offer their tax breaks and incentives; add them together, and the savings can be meaningful.

For example, say you're a homeowner in Austin, TX, whose life requires them to install a large 7-kilowatt solar panel system. Multiply that by the nationwide average of $3.70 per watt, and you get a total solar panel expense of $25,900. But then, throw in the city's rebate.

“If you are eligible for the rebate, they would essentially chip in $800 per kilowatt, or $5,600, or your installation,” says Reed Crossley, a solar marketing professional with Austin-based Revolve Sola, bringing your total to $20,300. The 30% federal tax credit chips away an added $6,090, so your total adjusted cost is $14,210, more than $10,000 less than the original price.

To figure out which incentives you can get in your area and the federal government, check out the Database of State Incentives for Renewables & Efficiency from North Carolina State University.

Solar panels will save you on your electric bills and pay for itself.

Now the fun part: How much money do solar panels save you in electric bills? A 6,000-watt solar system should produce 13,000 kilowatt-hours per year, which would save you the equivalent of $150 to $200 per month in electricity in most areas, says Todd Verk, who is the vice president of sales for the Southern California division of Green Solar Technologies.

In general, it takes seven to fifteen years for a solar system to pay for itself. The Union of Concerned Scientists notes that given the incentives and rebates offered blended with drops in market price due to increasing competition, the upfront expense of solar panels may soon dip to less than $10,000. And when that's the case, they'll pay for themselves in four to six years, and they might last 20 to 30 years.

Pick the panel that’s right for you.

Buying solar panels depends not only on the expense but whether your property gets enough sunlight to receive the advantages. While solar panel systems can profit from both direct and diffuse sunlight, they work best in the southwestern U.S. because of the prolonged amount of sun in that region.

Want to learn more about the solar industry and lowering your costs? Check out the HahaSmart blog for daily updates!

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