The temperatures have started rising, and environmental degradation has increased. The world is putting more efforts to go green and reverse the damage. One of the most impactful initiatives taken includes the use of renewable sources for electricity generation. However, renewables haven’t completely replaced fossil fuels due to various impediments, but if initiatives are taken at the ground level, change is possible.
Solar power has been gaining traction since it is an efficient alternative for conventional energy. Moreover, it is experiencing a decrease in prices and is backed by government incentives. The global solar energy industry is expected to reach $422 billion by 2022, a huge leap from $86 billion in 2015.
While commercial solar power requires a lot of investment and a group of investors, residential solar power is easily attainable. There is a lot of potential for residential solar power. According to estimates given by Credit Suisse, installed solar capacity can grow three times to hit 41GW by 2025. The financial services company revealed that only 3 percent of the residential rooftops in the US had solar panels in 2017. A 2016 report shows that even small rooftops of 5000 square feet can host solar panels and cover up to 25 percent of the country’s energy demand. If large buildings are taken into account, then the figure rises to 39 percent.
The high price of solar installation has been a deterrent in the growth of the solar industry, especially in the residential sector because it is not affordable for everyone. However, the prices have now slashed considerably. In fact, solar installation cost has dropped by 70 percent since 2010. An average sized residential solar panel now costs around $17,000 without incentives, as compared to $40,000 in 2010. The utility prices are now in the range of $28/MWh – $45/MWh, which is almost equivalent to other forms of energy.
Apart from helping the environment, it is going to save you money by reducing your electricity bill. It is a myth that you will not receive a bill at all. This is because you need to remain connected to the grid in case you do not have enough supply of electricity. However, you can take advantage of net metering, which is an incentive, provided by various states. When your solar panels generate more electricity than required, you receive bill credits. You can consume these to cover the cost of your electricity use from the grid. Apart from this, you also get tax credits, which further reduce your costs. The most important tax credit is the federal investment tax credit (ITC) or the solar tax credit. If you buy the system, then under the ITC you will get 30 percent off. Other than that, there are state solar credits. For example, in New York, you will get an additional 25 percent off on the cost.
To calculate your solar panel cost, take the cost of the installation and then divide it by the output it produces. The cost varies from state to state and also the incentives that you can get. Here are some more tips that will help you keep your solar costs within your budget:
1. Choose the right company
Installation of solar panels can be a boon or a bane depending upon the company you select. A solar installation can put a dent on your pocket if you overpay for your system, or install a low quality system. This will not produce the promised amount of electricity. To give you an example, a non-profit public protection company went through 125 complaints. It then discovered more than 30 companies that provided sub-par services, tried to entice customers with savings and poorly installed the equipment. Hence, it is essential for you to choose a company that is trustworthy.
When it comes to choosing an installation company, you have two options: national and local companies. While national companies are more established and offer more robust warranties, local companies are well versed with state incentives.
The most important thing is the company credentials. Visit the company website and see how long it has been in business and how many installations it has done. Check for certifications. The most common certificate is the North American Board of Certified Energy Practitioners (NABCEP), which is known as the ‘Gold standard’ for installation and standards. Moreover, check for reviews. If there are mixed reviews, it means that the company is genuine. Also, check for available financing options.
Many companies are equipped technologically in terms of solar sales software and solar sales crm, which makes their sales and installation process seamless and hassle-free.
2. Make sure the installation site is suitable
The most important thing in the entire installation process is to make sure that your installation site is suitable for solar energy production. If not, then your investment will not pay you back. If for example, your roof is in the shade for most of the time, then it does not really make sense to install solar panels. Moreover, solar panels usually last for 20 to 25 years, but if your roof is due for renovation, then do that before the installation. Disconnecting and reconnecting solar panels will again be heavy on your pocket.
3. Calculate the payback period
It is important for you to know when your investment will start paying off. Residential solar systems are better in this aspect. This is because their return on investment is high and they start paying off in a short amount of time. Logically speaking a less expensive solar panel will have a smaller payback period. However, cheap does not always mean better. Not all solar panels are created equal, it is possible that a bit expensive one will produce more electricity and has a better warranty. Remember, your main objective should be to convert solar energy into electricity effectively.
Solar panel installation is a huge investment and hence should be done after thorough due diligence. We recommend you do an extensive cost benefit analysis before finalizing it.
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