Renewable Energy Database
Today, solar energy is enjoying renewed interest as the combination of advanced technology, fluctuating energy costs and tax credits to offset the cost of installation have made it a popular choice for many homeowners. However, before choosing solar energy for your home, it is important to understand what it is, what it does and the benefits that it provides.
Company details
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- Business Type:
- Publishing company
- Industry Type:
- Renewable Energy
- Market Focus:
- Internationally (various countries)
- Year Founded:
- 2008
About Us
What is Solar Energy?
This is energy that comes from the sun itself. It is safe, clean and renewable which means that you can rely upon it every day to provide for part of the electricity needs for your home. Around the world solar energy is used to create hot water, heat and cool homes and provide electricity for all sorts of appliances inside residences.
There are no pollutants associated with generating solar energy, it is simple to install and is very low maintenance with no moving parts. This means that under normal conditions it will generate electricity for many years to come. Solar energy does have limits in that it cannot generate electricity during the nighttime hours and the amount of power it does create will depend on location, time of day and year and the current weather conditions.
How Solar Energy Works?
Basically, the solar power used to create electricity for homes and businesses uses the same principle of photosynthesis as the grass, trees and plants. The light from the sun is converted to energy that can be used to power all types of devices (photovoltaic solar power systems). Just as plants use sunlight to help them grow, so too do solar panels provide electricity to run so many of our devices.
One of the most common uses of solar energy is powering hot water systems (solar thermal systems). There are certain locations where solar energy provides up to 70% of the power needed to heat water for homes and businesses which saves them a considerable amount of money as compared to using power from the grid.
Additional Facts about Solar Energy
In addition to providing electricity, solar power can be used to create potable or saline water which is actually one of the oldest uses for solar energy. In addition, food can be prepared and cooked using portable solar power units as well as heating water for a wide variety of uses.
There are no environmental pollutants generated by solar energy which means that they can be used on a small scale to power homes and businesses or in larger measures to provide power to neighborhoods and communities.
Around the world, solar energy has so many different uses that only now are they being pulled together to provide people with safe, clean energy for the tasks they perform during the day. From drying your clothes on the line to providing the electricity needed to power the appliances and devices in your home, solar energy is becoming a bigger part of people’s lives every day.
Cost
Solar Panel Cost
There is no doubt about the popularity of solar energy as more people are having installed for their residences. With today’s fluctuating energy costs, solar energy represents a renewable source of stability that provides homeowners with a little peace of mind knowing that their energy bills will be more consistent especially during the hot summer months when utility bills tend to skyrocket.
However, the total cost of the installation can catch some people off-guard even though they are offset somewhat by tax credits. This means that it will take years for the solar energy to start paying for itself, but it will add value to your home and in the long run become profitable for you.
Solar panels cost
The answer will depend on a number of factors such as the number of panels being installed, the actual cost of the panels themselves, labor and so forth. Given that solar panels may represent nearly half the total installation cost, it is fair to say that the typical homeowner may pay from roughly $7,000 to $14,000 just for the solar panels alone.
When you consider that the total cost of installation is generally double which includes a variety of costs, you can see how expensive an installation can be. However, it must be pointed out that tax credits from state and federal sources can offset the cost of the solar panels considerably. This means that the typical homeowner is paying a percentage of the overall cost.
Why are solar panels so expensive?
There are a number of reasons why, but the main one is that solar panels use advanced technology and material to collect the energy from the sun. The overall expense of the materials is the main reason why solar panels are expensive and will remain so for quite some time. The panels are made from different materials that have unique properties in capturing and transmitting the energy so that it can be used for your home.
The good news is that the panels are very tough and durable which means that under most conditions they should last a long time to come. In addition, if there are new breakthroughs in terms of solar panel technology, they can replace the panels that are currently being used by your home. However, it must be pointed out that solar panels will work for many years and replacement may not be necessary at all.
Overall, the cost of solar panels are certainly impressive, but the savings that they offer are even more profound, especially for homeowners that are looking to save money in the long run. Plus, they are the type of investment that will actually add value to your home if you should ever decide to sell. Buyers are often attracted to solar energy because they understand the cost savings that it brings.
While solar panels may be expensive, the benefits they bring to your home combined with the savings from tax credits make them a great investment.
Installation cost
Again, there's no simple answer to that - the final cost will depend on a number of things such as the number of panels being installed, the tax credits received and the company providing the installation as well as several other factors.
On average, the typical cost for installation on a standard home can run anywhere from $15,000 up to $29,000. However, it must be noted that a portion of the installation is offset by the available tax credits in your state as well as any from the federal government.
Additionally, many solar power companies offer lease and financing options which can help the average homeowner with purchasing costs.
The breakdown of the installation cost
The cost is essentially broken down into three different sections:
- Permits and installation
- Equipment
- Sales and Operations
Of the three, equipment cost generally comprise about half the total cost for installation. This is mostly because of the advanced solar panels that are used along with the supporting equipment which represents most of the cost. About 35% consists of the actual installation cost which includes labor and the permits needed to put solar panels on your residence. The rest goes to the sales and operations of the company which can be interpreted in part as profit to pay the people and to maintain the equipment after it is installed.
The good news is that the solar panels are low maintenance barring some natural disaster which means that they will start paying for themselves sooner than many other alternate forms of energy such as wind which tends to have higher maintenance costs.
Why solar energy is cost efficient for you
The bottom line is that even at the upper end of installation costs, solar energy does start paying for itself in the long run. This is why adding solar energy to your home is the perfect investment once the installation costs are fully paid, your lower energy bills will keep more money in your wallet.
Another important factor is that solar energy should raise the value of your home as well. Solar energy is a very attractive feature that buyers understand means lower energy bills in total. So as a selling point, solar energy may make the difference in getting the right price for your home.
Regardless, solar energy is the type of addition that actually pays for itself and then stabilizes your electricity bills, particularly in the summer when they tend to rise dramatically. For the average homeowner, solar energy represents a smart investment.
Solar Tax Credit and Rebates
Although there has been a push in recent years by the federal government in terms of providing tax credits and rebates for solar energy, it is the states themselves that have led the way. It should not come as a surprise that that the states which offer the best incentives for the use of solar energy should also be the ones that receive the most sunlight on a year-round basis.
Arizona: With over 300 days of sunlight, this desert state has taken full advantage of using tax credits and rebates to help fuel the solar industry. The rebates do vary depending on the utility company, but they average around $100 per kW generated and the state itself provides 25% of the total cost of installation in terms of tax credits up to $1,000. Plus, solar systems are completely exempt from property and sales taxes which means that most solar energy systems will pay for their installation costs in roughly seven years time.
California: Arguably the most environmentally conscious state, California offers substantial incentives for solar power. Depending on the utility company, the rebates generally fall within the $700 to $1,000 range and while tax credits are not provided, there is a complete exemption from all property taxes which means that on average a solar energy installation will pay for itself in a decade.
Colorado: Although most people associate this state with mountains and snow, it does receive a considerable amount of sunlight the year round. Colorado became the first state to create a renewable energy standard and offers impressive rebates depending on the utility company some of which goes up to $15,000. There are no tax credits, but there is a 100% tax exemption on installation and properties which means that on average a system will pay for itself in just eight years time.
Connecticut: Many people might not think a state this far north would provide so many solar energy benefits, but Connecticut is focused on renewable forms of energy. Their high electricity prices has created a big demand for solar power which is why their power rebates go up to $6,750 and with a 100% tax exemption from installation and property taxes, it only takes about eight years to pay for itself.
Delaware: Small in size, but big in solar energy, Delaware offers some of the biggest rebates depending on the utility company which can range upwards of $15,000. Even without tax credits or exemptions, installing a solar system in the state means that it will pay for itself on average in just nine years time.
Hawaii: This beautiful state seems like a natural for solar energy and with tax credits ranging up to 35% or $5,000 maximum for installation, it acts as an attractive incentive. However, it must be pointed out that only in Honolulu is there any property tax exemptions. Still, considering the high cost of electricity on the grid and the high amount of sunshine throughout the year, it only takes four years on average for a solar system to pay for itself.
There are several other states which also offer incentives for installing solar power, so it is worth checking them out if you want to save on your electricity bill.
Solar Energy Pros and Cons
When it comes to choosing an alternative energy source for your home, solar energy is one that is gaining a lot of popularity. Although solar energy has been available for decades, it has only been recently that technical advancements, tax credits and other incentives have made this a viable, practical form of energy for the home.
However, there are a number of benefits and potential issues when installing solar panels to your home that will need to be considered first. The more information that you have, the better informed your decision will be when it comes to choosing solar energy.
Pros
Renewable Source of Energy: Every day the sun shines is a day that your home receives solar energy. In fact, even when it is cloudy light energy is striking the solar panels and providing free, renewable energy for your home.
Tax Credits: Installation costs are now somewhat offset by the tax credits you receive from federal and state governments. This means that solar energy is more affordable than ever and under most plans it will start paying for itself within five to ten years.
Safe: Solar panels are generally installed on the roof or some unused space and will not get in the way of you or your family. They are safe to use and only require a minimal amount of maintenance over time to run at peak efficiency.
Reduces Electrical Costs: During the day, solar energy is augmenting the electricity being sent to your home which means that your electricity bills are lowered. This is especially useful in the summertime when energy bills peak.
Silent: Solar provides clean, quiet power to your home unlike wind or certain other forms of energy. This means that you can enjoy the quiet and still get the power needed from the sun.
Cons
Unfortunately, even the benefits of solar power come with a cost that you will need to consider before adding it to your home.
Expense: While tax credits and installation incentive plans offset part of the initial cost, it is still somewhat expensive to add solar power to your home. You will need to have a considerable amount of money up front at least as a down payment before having it installed.
Intermittent Energy: Arguably the biggest issue with solar power is that it only provides electricity during the day which means that for the rest of the time you are drawing on the grid alone. Thus, it takes more time for the actual savings to start adding up.
Batteries: Since solar power can only occur when the sun is present, many solar panels comes with battery back-ups to store the energy for use at night. The acid used for the batteries may leak if the battery is not well made or if it is damaged.
While no power system is going to be perfect, it must be stated that the issues with solar power are generally minor and far exceeded by their benefits. If you have the space on your roof and want to lower your energy bills, then solar power is right for you.