Solar energy systems are becoming popular, but solar panels are a new technology and still expensive. Are they worth the cost?
Lets Look at Some Simple Math
This is looking at the installation of solar panels as an investment, as there are so many debates about how 'green' they are.
- How much is your annual power bill?
- How much would it cost to install the system?
- What percentage of your power bill could be covered by the system you are thinking of using?
- Do any power companies in you region offer 'buy back' schemes?
- Are there any government monetary incentives?
- How many years would it take to recoup the cost of installing the solar energy system?
There are a few other factors which may or may not apply to you. If you get a loan to cover the cost of installation, then what are your loan repayments going to be? What is the rate of film degradation (loss of power generation) for the panels you are looking at?
It is also important to consider that most of the factors are variable. The amount of 'Buy back' schemes or tax incentive may vary wildly over time. Interest rate hikes may impact your savings if you have taken a loan to get solar panels. If power was to become more expensive to buy, then it would take less time to recoup your costs.
By way of a conclusion of solar panels as an investment, the amount of time it would take you to recoup the cost of a solar energy system; and the amount which you would save on power each month will depend on a wide host of factors. It really is up to individual consumers what they think is reasonable. If it took 20 years to recoup the costs would it be worth it? What if it cut your power bill in half? Most of us don't stay in houses that long any more, but we are all keen to lower our living costs – especially when it doesn't mean changing our lifestyle.
Facts on Solar Energy Which You Should Consider
- Solar panels require little maintenance and no upkeep costs.
- Set up costs include installation, building consents, distribution company applications, wiring and inverted technology. Panels have become cheap, but the other costs have yet to decline.
- Solar panels can be used to just heat the hot water, or to produce electricity.
The Price is Declining
Over just the years between 2011 and 2013, the cost of installing solar panels has dropped considerably. If you are wanting to install them in your house just consider waiting a year or two, as they may drop further in price. The cheaper they are to install, the cheaper it will cost you to get each kW of electricity, and the less time they will take to recoup their cost.
Some countries have incentives for installing solar systems, in Italy, Australia and Germany, the cost to install a system is generally 40% lower than in the USA. Despite the higher cost, the solar panel market in the USA is growing rapidly. With this growth, the cost in the USA is declining. The U.S. Solar Energy Industries Association and GTM Research, in a quarterly report released in 2013, revealed the cost of solar panels has reduced by 60% from the start of 2011. The problem, as mentioned above, is that it is not just the cost of the panels themselves which is expensive.
So you should weigh all these different options, and do the math, and then you should consider if you think it's wise to purchase a Solar Panel setup for your home. Only the individual home owner can decide if this is a worthwhile investment or not.