Are you considering buying solar panels for your home? Even though they’re becoming increasingly popular as they reduce the energy consumption required from your utility provider, much of the dilemma in making the leap into solar panels, also known as a photovoltaic or PV system, is figuring out whether or not it will be a cost-effective choice in the long run. Let’s take a look at the logistics of installing solar panels for your home.
It’s a Long Term Investment
How long do you plan to live in your home? While it’s a great idea to save energy by capturing and converting sunlight, experts advise it will take approximately 7 years for you to break even on your residential solar panel investment so installing a solar panel system can’t be thought of as a quick way to keep money in your pocket. To enjoy the profitable benefit of installing solar equipment, you’ll need to commit to staying in your home for many years to come.
How Will You Pay for Installation?
According to the US Department of Energy’s EnergySage, the average cost of installing a residential solar panel system is approximately $20,000 after tax credits or about $2.81/watt for a 10 kW system. Do you have the cash on hand, are you ready to take out a loan, or maybe you’re thinking of using the equity in your home? Any way you look at it, it’s a large expense to undertake as a homeowner so be sure you’re financially prepared to do so.
How Does a Solar Panel System Work?
Generally, solar panels capture the photons produced from sunlight and generates them into direct current (DC). However, most residences operate on alternating current (AC) so a solar panel system will also consist of a DC to AC inverter. Besides the panels themselves, some solar panel systems will incorporate PV batteries to store solar energy for future use.
Types of Solar Panels
While there are many variations of solar panels, the most popular are:
- Amorphous – usually consist of thin silicon sheets attached to glass, metal, or plastic; used to be more popular as they were originally less expensive than other panel types
- Monocrystalline – these are the oldest workhorse of the panels as they’re reliable, long-lasting, and are efficient, but they’re also the most expensive option
- Polycrystalline – they’re less efficient so you’ll need more panels, but they’re also less pricey than monocrystalline panels
Solar Panel Configurations
Besides choosing the specific panels themselves, there are three general solar panel system types for your residence:
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Grid-Tied |
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Grid-Tied with Battery Backup |
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Do Your Homework
There are five major factors you need to consider before installing a residential solar panel system:
- How much is your current electricity bill? Utility companies charge you for every kilowatt-hour (kWh) of electricity used and the rate you pay will vary depending on where you’re located. According to the US Energy Information Administration, in February 2021 the average price of electricity was 13.34 cents per kWh across America, while residents of Hawaii paid 32.36 cents and 24.77 cents in Oklahoma, and those living in Missouri only paid 9.35 cents. If you’re a homeowner facing a high electricity rate, you’re among those who would benefit most by switching to solar power.
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- Shading analysis. How much sunlight does your roof routinely get every day? Shading obstructions can occur on your home’s roof due to surrounding buildings, trees, power poles, or antennas. When shading happens, the sun’s rays are blocked from reaching the cell and the shaded cells act similar to a clog in a water pipe where the flow is restricted, so essentially any amount of shading can have a huge negative effect on solar panel output.
- Roof orientation and size. Because roofs come in all shapes, sizes, and pitches, you may need to get a bit creative when it comes to installing a solar panel system as panels may need to be fit around dormers, skylights, and chimneys. Solar panels should ideally face south for most states but with today’s innovations, you can reap the sun’s benefits from just about any orientation. EnergySage states that New Jersey, New York, and Massachusetts are among the top states for solar installations in the country. The pitch of your roof also impacts the sun’s position on your roof and therefore in turn affects potential electricity production.
- Rebates and incentives. According to the Internal Revenue Service, the residential energy efficient property credit, which applies to specific solar electricity, water heaters, roofing, and/or tiles, can offer a rebate of up to 26% on the installation costs. Be sure to upload all of your important receipts to the easy-to-use DomiDocs homeowner management platform where they’ll be securely stored and accessible 24/7.
- Solar company hype. Be sure you’ve done your homework and understand the facts and figures as presented to you by a potential solar panel company. Know that their ultimate sales pitch goal is to have you sign a power purchase agreement or a photovoltaics third-party-owned lease. Even if they’re offering a $0-down loan, your monthly savings will only be 10 to 30% of your electricity on average so the additional cost of having a loan may make your solar project unfeasible. The National Renewable Energy Laboratory of the US Department of Energy states that obtaining 3 or more quotes from prospective solar companies can net a savings of $5,000 to $10,000 on installation. They also noted that larger solar companies tend to charge between $2,000 and $5,000 over that of smaller solar companies so be sure to shop around to get the best price.
Pros & Cons of a Solar Panel System
As with any home renovation project, you’ll need to weigh out the pros and cons of installing a solar panel system in your home. Here are some further considerations:
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Pros of a Solar Panel System |
Cons of a Solar Panel System |
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