This page will detail the cost savings of solar compared to conventional energy provided by a typical electric utility.
Solar power can now save the average American homeowner many thousands of dollars over years of electricity usage. The solar power industry has now matured enough to a point where prices for solar have fallen lower than the price of fossil fuel energy.
Instead of asking how much do solar panels cost?, homeowners should be asking how much solar power can save them over many years of use.
As you can see in the chart to the right, installing a solar panel system will save the average homeowner at least $25,000 in electricity costs over a 25 year period. It is at least that amount because electric utilities have historically raised their rates over time and will continue to do so. The average person would figure to save many thousands more than $25,000 with solar. This is because the average cost for conventional energy will most likely be much more than $40,000 over 25 years due to very likely future rate hikes. One of the great things about solar power is that a homeowner can lock-in the cost of energy for at least 25 years.
Smart homeowners realize that solar power is a great investment, but an investment nonetheless. For example, a typical homeowner is expected to take 30 years to pay for the costs of a home. After this period, the loan is paid off and there are no more mortgage payments due. The only costs remaining are property taxes and costs related to home maintenance. Solar power should be looked at in the same way. Instead of a 30 year pay back time frame, solar takes typically no more than 7 or 8 years to pay off. Afterwards, a homeowner can benefit from decades of clean, free energy.
On the other hand, we live in a payment focused world. People are concerned about their monthly payment amounts for their homes, cars, and credit card balances. The great thing about the prices for residential solar power is that the payments are very easy to handle. Payments on a ten year solar panel loan are about what many homeowners currently pay for their utility generated electricity. Some homeowners may even see savings right away.
So how are these savings possible? It’s simple. Spreading a solar panel system’s cost over a 25 year period of electricity use yields a price of about 8 cents per kilowatt hour. The average price for electricity from utilities across America is about 13 cents per kilowatt hour and rising. This difference in kilowatt hours results in thousands of dollars over many years.
Please visit my cost of solar page for a complete breakdown of the total costs involved with getting a solar panel system installed.