Are you looking at your energy bills with concern and wondering if there is a way to cut costs? Many people today are looking to solar panels to provide them with an alternative energy source. Solar energy’s status as a renewable resource makes it particularly attractive in the age of climate change, by helping to cut down greenhouse gas emissions from non-renewable energy sources.
In the past, solar panels were off-putting because they were unsightly appendages tacked onto the roof of your home. However, panel manufacturers have begun to discover better ways of incorporating them into the roofline of a home. Don’t make a snap decision based on the early days of solar panel use; explore the options available today.
When solar panels first penetrated North American consciousness, they were expensive to purchase and even more costly to install. Between 2011 and 2014, the price of Chinese-made panels dropped about 60 percent, to 50 cents per watt from $1.31 per watt. As they become more prevalent in North America, there is a chance the price could dip even lower. Make comparisons, however, and think about long-term savings; a more expensive system could provide greater cost savings over the long haul.
The cost savings you’ll realize from solar panels will be long-term savings, not something with an immediate impact. Your electricity bill will determine what your savings will be. To calculate potential savings, first look at your monthly electricity bill to determine what you pay per kilowatt hour (kWh). An average home uses about one kWh hourly, which adds up to approximately 740 hours monthly. Multiply the price per kWh by 740 and you can estimate your monthly electricity cost. Your monthly electricity bill will also show your kWh usage for that billing period.
Today’s solar panels generate about 10 watts per square foot and have a conversion to electricity rate of about 12 percent. It will take about 100 square feet of panels to provide energy to a house that uses an average of one kWh daily—but only if the sun shines 24/7. You’ll need to adjust your estimate based on the season and the region where you live. Solar calculators that help you assess potential benefits are available online.
Comparing the costs of electricity monthly is only part of the equation, however. You’ll also need to take into account the installation cost of your solar energy system.
Adding a solar power system to your roof can be expensive; you’re paying for the rooftop preparation, the installation, and the electrical system. A five kWh system might cost upwards of $18,000 to install. You can find an online solar marketplace such as Energy Sage to help you compare the price and installation costs for the systems that interest you. You can use this information to determine how long it will take the system to pay for itself.
A U.S. study of eight states conducted by the Lawrence Berkley Laboratory concluded that homeowners were willing to pay about $15,000 more for a home with a solar system—and that’s in addition to your savings from using the system.
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If you are thinking about a solar energy system for your home, buying it isn’t the only option. Consider these three ways of accessing solar energy.
If you purchase a solar energy system, the panels and the electricity generated belong to you for the 20- to 30-year lifespan of the system. It’s the most cost-efficient way of making the move to solar energy over the long term. Many jurisdictions have tax credits or rebates available as an incentive to make the move to solar energy, so do your homework before you buy.
You can avoid a hefty price tag by leasing solar panels for your home. The leasing company will install them at no cost and maintain them, based on a long-term contract. You’ll save money on your monthly bill, but the leasing company owns the panels and will enjoy all applicable tax credits. However, there’s no down payment or major investment involved.
If you live in an apartment or a condominium, installing a solar system isn’t an option. However, you can take advantage of community solar power by buying it from a solar farm. You’ll get a discount compared to your current electricity rates, but it won’t provide the large savings the other two options offer.
If you do decide to take the solar route, you can enjoy the knowledge that you’re doing something positive for the planet, not just for your wallet. For more information on how solar panels will affect your home insurance or to get a quote, contact Square One at 1.855.331.6933.
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