In 1977, a solar panel system cost $76.77 a watt. Imagine that you want to install an average, 2,000 watt system for your home. If you’re in a sunny state like Florida or California, that’s going to give you enough energy to power your home during the day. Furthermore, if you have a battery backup system, it means you’ll be able to use renewable energy almost exclusively around in the clock. To install a system of this size in 1977, the panels alone would have cost you $153,540. Clearly, going solar hasn’t always been a viable option.
A problem that we often see is that people have an outdated price in their head regarding the true cost of a solar panel system. They have the misconception that a solar panel system is a luxury, or something that only their neighbor who’s a doctor can afford to install. In reality, this is not even close to the truth. Before we look at how much the price has fallen though, it will useful to first look at how much electricity costs when you buy it from the grid.
Paying for Electricity from the Utilities
An average home in California uses about 573 kWh of electricity every month. At about $0.15 an hour, that ends up totaling $88 a month. While the electricity usage rate in California is actually lower than the national average, the cost of electricity purchased from the utilities is about 30% higher. At $88 a month, that ends up costing the average homeowner $1,056 every year.
However, one factor that’s not taken into account in these prices is the long term degradation and harm to the environment. The more coal we burn, the more CO2 is released into the atmosphere, the hotter the planet gets. This is responsible for a wide array of different environmental disasters, which are going to start becoming (and already are) quite expensive. Not only that, but in the future we’re going to have to end up paying billions, if not trillions of dollars, to counteract the effects of global warming. None of these expenses are factored into your monthly bill.
The Cost of Solar Power Today
Since 1977, the cost of a new solar system has dropped significantly. A system that used to cost $76.77 a watt, now costs a mere $3.74 a watt or less. That’s an incredible price drop, and one that the solar industry is actively working to make consumers aware of. One of the challenges is bring people up to speed about today’s prices. Too many are still stuck thinking in terms of what it cost in 1990 or 2000 to install a system. Things are radically different now.
If you live in California and you want to install a residential system, after you factor in all the costs involved with an installation, it will now cost about $15,000 to $20,000. However, there are numerous incentives out there to help you pay for the system. These incentives are backed by the federal government, and there are also local initiatives available depending on where you live. In the end, most homeowners end up paying about $10,000 for their system.
Remember in California, most people pay about $1,000 a year to the electricity company? Well that means that after ten years, the solar panels will have paid for themselves. After that you’ll be making money. Most solar panels are rated to last 25 years, which means you have the potential to save $15,000 dollars or with your system. If your panels last longer, which frequently happens, you may end up saving even more. These savings also don’t take into account any money you may earn by feeding back into the grid. If your electricity demands during the day are low, and you get paid for your excess electricity, your savings can easily exceed $20,000.
Even if you turn around and sell your home a week after the panels are installed, you’ll still turn a profit. Homes with solar panels sell for a higher price, that more than compensates for the cost of the installation of the system.
With all these benefits, there’s no reason to not invest in solar power. It’s green, it’s renewable, it will reduce the amount of carbon being spilled into the air, and it’s a good investment! To get started, talk to Pick My Solar about finding the best system for your home. We’re experts at helping you to save money, and we’re standing by to help.