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Cost-Effectiveness of Solar Panels

By Benjamin Strusnik March 16, 2022

Cost-Effectiveness of Solar Panels

Are you interested in making the switch to solar power and conserving energy while lowering your utility bills and reducing your carbon footprint?

Do you want to harness the sun’s energy to power your home but you’re not fully aware of the costs involved and the effectiveness of solar panels in producing electricity? 

Perhaps you have already decided on making the switch to solar but aren’t sure of solar panel placement, orientation or whether solar is suited for your home structure or location.

With the advancement in technology and the continuous increase in carbon emissions, many of the world’s population have already made the smart decision to switch to solar-powered systems, living greener and cleaner by powering their homes with this renewable energy source.

The main concern amongst most when people purchasing a solar panel is if they are cost-effective, i.e., is it something that is good value, where the benefits and usage are worth at least what you paid for it?

The following article will answer all these questions and highlight the cost-effectiveness of solar panels, as well as detail the main concerns and considerations before purchasing your own solar system.

Is Solar for me?

Before we can discuss the costs of installation and the solar panel return on investment, it is important to understand if solar panels are suited for your home type and if they will work efficiently in your residential area.

Are Solar Panels Cost-Effective

Efficiency

The efficiency of solar panels is largely dependent on the amount of sunlight that comes into contact with the panel's surface throughout the day. It is the most important factor in determining the final output voltage of your solar energy system.

In simple terms, your solar system’s efficiency is how effective the panel is at converting all those incoming sun rays into household electricity that can be used to power your home and essential electronic devices.

To understand it practically, if your solar panels have an efficiency of 30%, it ultimately means that 30% of all incoming solar energy is converted to home electricity. The higher solar panel efficiency percentage, the greater the overall electricity production.

Location

If your home is situated in an area that is shaded by large overlying tree canopies or is obstructed by large buildings, it will negatively impact your solar panels' efficiency, decreasing their voltage output. Therefore, it is important to consider your home location before making the financial decisions in purchasing a solar power system.

Are My Solar Panels Cost-Effective

Essentially, the more access the solar panels have to direct sunlight throughout the day, the larger the final energy output it will produce. You typically want around 3-6 hours of direct sunlight each day to ensure that your solar panel is working efficiently.

Make sure to keep track of sunlight patterns, especially in the summer months to make sure that you meet the minimum criteria.

Monitoring

To ensure that your solar panels are cost-effective, it is important to do some visual monitoring and gather information on weather patterns in your area to ensure that the sun’s rays are not restricted from reaching your panel’s surface.

Additionally, if your area is well suited for solar panel installation, make sure that your panel is placed in a position that faces west. This will ensure that your panel is in contact with sunlight for the majority of the day as the sun rises and sets.

A general rule of thumb for solar panel placement is to place it facing south in the northern hemisphere and north in the southern hemisphere because of the sun’s trajectory throughout the day.

If you find that your home location isn’t best suited for on-site installation, then you can always turn to the option of off-site solar energy systems.

Solar Panels Cost-Effectiveness review

You will be able to purchase a share in a community solar garden or an off-grid solar energy system where the electricity produced is shared amongst holders. This is a great alternative as you won’t have to pay the initial installation fees, saving on some extra cash.

If you’re wanting to skip paying for installation and prefer installing your solar panel by yourself, then I’m afraid that this isn’t possible or is at least not encouraged because of the problems you may encounter. You may risk damaging the solar panel and reducing its efficiency.

For advanced DIYers who have knowledge of solar panel installations, it is possible, but for the average homeowner, professional installation is required.

What Are the Costs?

The initial payment of solar panel installation can be an intimidating investment because of the hefty fees involved in the installation process, not to mention the price of maintenance thereafter. However, you will soon be reaping the financial benefits of having your own solar energy system.

The additional fee, along with the required equipment, and the at-home installation can cost between $15,000 and $25,000 in total, but you will make all this cash back and more by sticking with your solar system.

Solar energy systems can significantly reduce your monthly utility bills and could even eliminate them altogether. Your solar panels' lifespan ranges between 25 and 30 years, and you will be able to power your home for the entirety of this period. This means saving big on your utility bills for its entire lifespan.

Solar Panel Cost-Effective Investment

Again, as mentioned above, your solar panel investment can be recouped over the years, but it might take longer to make your money back based on your home location and local weather conditions. Remember to always do your own research before purchasing a solar panel for your home.

In the long run, solar panels can save you money and they do in fact pay for themselves. 

The average solar panel payback period for residential solar energy systems is about 6-9 years, but you can save thousands of dollars on your electric bill for more than 20 years. There are also ways to make your money back quicker through government incentives and programs.

Additionally, there are ways of offsetting the initial payment of installation through tax incentives, rebates, and financial support from your local government. 

Most installations nowadays come with the added benefits of federal and state tax, which means you can claim up to 30% back in installation fees.

Energy Use

Of course, a solar power system is a wonderful asset to have, but your energy usage is the factor that determines if you can really take full advantage of it.

If your energy bills are significantly high and you spend hundreds of dollars on your electric bill, then it makes financial sense to have solar panels installed onto your home to reduce your energy costs. Solar panels can eliminate your electric bill altogether.

On the other hand, if your energy usage is below average and you don’t break the bank on energy bills, then installing a solar panel might not be worth the expense.

Solar Panel Efficiency Over Time

You should also keep in mind that solar panels deteriorate over time, especially through the harsh winter months that come with heavy snowstorms in the northern states. This will cause your solar panels to reduce in efficiency and maintenance fees to replace or repair them can be pricey.

Make sure you do diligent research on your energy consumption, and if it’s low then maybe it would be financially beneficial to stick to paying your current utility bill.

However, there are benefits of producing excess energy if your energy usage is low, which will happen over the long summer days. The excess energy produced will feedback into the utility grid, which will reduce the load on local electricity, benefitting all residents in your area.

Are Solar Panels Cost-Effective Investment

Currently, there are 41 states that have adopted this policy so make sure that your state provides this scheme before making the switch to solar.

Furthermore, your unused solar energy can be redeemed for bill credits with your utility company that you will be able to use when you really need it, especially over the months that don’t see much sun.

You can also store unused energy into battery banks that you will be able to use whenever you please. However, installing battery banks does come with an additional cost, but it is all worth it in the long run. Some utility companies might even have the option of paying you for your excess electricity.

Solar Panel Investment

Solar power systems are constantly improving, but it is still far away from perfection. The initial cost of solar systems installations and maintenance is a huge financial commitment, but you will get a huge return on your investment over the long term.

At the end of the day, if you live in an area that is always in constant sunshine and you can afford the initial solar panel installation fee, or you want to reduce your monthly utility bills, it makes perfect sense to use solar panels as a cost-effective and eco-friendly solution in power generation for your home.

You will eventually make back your initial expenses, as solar energy sources will add up to big returns on your electricity bill. 

At the same time, you will also be making your neighbors happy by supplying them with the excess energy that you don’t use at a reduced cost.

why Are Solar Panels Cost-Effective for

It’s important to consider things like sun exposure, the direction of your roof, and your roof type before making the final decision to install a solar panel. Additionally, make sure that your area/state has solar tax incentives or rebates to ensure that you reach and recover from your initial payment quicker.

Conclusion

For further assistance, it is important to consult a solar panel company. They will assist you and evaluate your property to see if it is well suited for a solar system to be installed.

Shop Solar Kits has a great option on their website which allows you to select the best solar kit for your home. They also have an instant financing option that will allow you to purchase a solar panel and pay it off later.

In the end, the benefits of solar energy for your financial gain and the overall environment greatly outweigh the heavy initial fee. Right now, is the perfect time to make the switch to solar energy, as installation fees will continue to increase in the coming years.

There is a continuous advancement in solar technology and will continue to improve in the future. This will create more affordable and easier to use options that are catered to your individual needs. You might even see portable solar panels in the future that can be used on the go.

Now that you’re pretty much an expert on all things solar and understand the cost-effectiveness involved, it’s time to make the smart choice and switch to powering your home with solar energy. 

You will be doing yourself, mother nature, and your neighbors a huge favor. Your solar investment holds a bunch of serious potential.

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