At some point, you might have thought about installing solar panels on the roof of your home, they provide more sustainable energy than fossil fuels, and in the long run, they produce cheaper energy. If you have checked the installation price and wondered why solar panels are so expensive, then you are not alone.
What is the Cost of Solar Panels?
The cost of solar panels depends on the energy consumption of your home. An article published by Solar Reviews in 2021 estimated that the installation process usually costs US $2 or US $3 per watt. In most households that require about 6 kilowatts, their total cost is between US $12,000 and US $18,000. The cost of a larger house that uses more energy can range from US $20,000 to US $30,000.
Even though it sounds expensive, solar panels are much cheaper than before. According to the Solar Energy Industry Association (SEIA), the average price of solar panel installations has fallen by approximately 70% since 2010 and has fallen by approximately 37% in the past five years. However, it may decline further in the next few years.
Why are Solar Panels So Expensive?
The cost can be divided into two categories: hardware cost and soft cost. Hardware accounts for 46% of the average cost of solar panels. This includes solar panels, solar inverters and the rest of the system, that is rack and installation, electrical installation, etc.
Soft costs account for 54% of the average cost of solar panels, including installation and labor costs, sales and marketing, licensing and inspection fees, and installer profits. The soft cost component of the total cost of solar panels is another fact that often surprises consumers. However, considering the type of solar panel company and the installation work they are doing, this figure makes sense.
Unfortunately, the high upfront cost of solar panels often discourages those who only want to live a green lifestyle. According to a 2018 report by Unbound Solar, large solar panel companies sometimes double or triple the cost of the equipment itself, giving homeowners the option to install covers. A solar array with a cost as low as US $10,000 may eventually cost US $30,000. With this in mind, it is recommended that you hire a small contractor or do it yourself.
However, solar panels themselves are relatively expensive because they are made of high-quality materials. According to Ecotality, solar panels are mainly made of pure silicon, a metal that requires a lot of energy to manufacture. They are also equipped with high-performance inverters and electrical protection materials to ensure the best performance. The initial investment in solar energy can then be further reduced through incentives and state and local tax credits.
Then calculate the amortization period to allocate the remaining installation costs to the entire service life of the solar system. Most solar systems only pay for 1/3 of their service life. Therefore, in the long run, the solar system is not expensive. In fact, they are very cheap, and installing it is a good idea, especially when the government is so well motivated.
5 Ways to Minimize Solar Panel Cost
Here are a few ways to reduce your solar installation costs that can help you save a few bucks!
1# Quote Comparison
It may seem like a simple task, but in addition to finding the first solar quote you get, you can also find multiple contractors in your area. If possible, ask a friend for advice.
Traditionally, the most expensive supplier is the supplier responsible for purchasing and installing solar systems. This is of course the most convenient way, but you can count on the high premium for this convenience.
Buying solar system equipment by yourself and then only commissioning the contractor to install it can save a lot of money.
2# Do It Yourself
One way to significantly reduce the cost of installing a solar system is to install it yourself You can easily learn the basic concept of installing a solar system by sitting at home, online. Of course, you want to do it well, so if you are confident in your skills, this is just a step, but remember that you will significantly reduce system costs.
3# Accept It as a One-Time Investment
Solar power and system are different. Installing it means you have now made a major one-time investment and then benefited from reduced energy costs over the years.
The average life cycle of the solar system is about 25 years. Therefore, you need to find a way to diversify your initial investment in the system over time and compare it to the high utility bills you would continue to receive without solar energy in your home.
4# Buy the Right Size
When buying a home solar system, the purchase is too large to meet your needs, and it is easy to make mistakes. Fortunately, you can use a simple process to determine how much energy you need.
Let your home use solar energy. Do this exercise to make sure you get a quote for a system that is large enough but not too large.
5# Warranty & Service Contracts
It is wrong to assume that every part of your solar business needs to be reduced in cost. You may want to pay a little more to reassure yourself, for several reasons.
For example, it is important to obtain good guarantees from manufacturers and installers to protect you in the event of problems or mis happenings with the system. Sometimes it is worth paying more for a comprehensive warranty and reliable support and service, so make sure you check all files carefully before buying.
The Final Word
Finally, the cost of solar energy is as important as the performance gained from installing solar panels. For most homeowners, solar energy is a good investment that can pay for itself in just 7-8 years. From now on, you can basically generate electricity for free and collect savings. For a typical 6 kW system, the average cost is US $14,940, which is a major financial investment for home renovation.
Just as the cost of solar panels varies from state to state, solar payback also depends on where you live. Generally, the places where electricity is the most expensive (such as California, New York, Massachusetts) can save the most during the entire life cycle of a solar panel system.
So, make your choice today, and get your first solar panel installation done!