The Cost Of Solar Panels For Homes

Now that climate change is public enemy number one and with all this talk of rising energy prices and dependence on foreign energy sources - what is preventing solar panels for homes from reaching their full potential? The growth of solar panels for homes is currently estimated at around forty per cent per year and solar hot water is being adopted at an even faster rate however this only represents a fraction of the total population. The major stumbling block for most people is still cost, price and more specifically return on investment. Currently solar power costs about $10 to $12 per watt installed. Most estimates show it takes between twenty and thirty years for a grid-connected solar system to “pay for itself” - that is, to recoup the initial outlay through savings made compared with exising bills. Some estimates are even as high as fifty years which means that solar power is currently the most expensive type of renewable energy. This article is going to discuss the main issues involved in calculating the costs of solar panels for homes and offer recommendations for reducing those costs in order to assist you in achieving a better return on your investment.

When calculating the cost of solar panels for homes and return on investment you will want to answer six main questions:
How much electricity do you need?
How can you reduce the overall amount of electricity that you need?
How much is it going to cost?
How can you offset that cost?
How can you best prepare your house for solar panels?
What other costs are likely to be incurred?

1. How much electricity do you need?
The first step is to asses what capacity you need and can afford. At this stage you want to consider the pay back period and also the environmental impact. An average household’s electricity use is about eighteen kilowatt hours of electricity per day. The most popular domestic size solar panel (a one kilowatt system) produces nearly four kilowatt hours (kWh) per day of electricity, depending on where you live. That’s about 20% of the average household’s electricity consumption. However, the bigger the system you buy, the more electricity you’ll produce.

2. How can you reduce the overall amount of electricity that you need?
Before you run off spending thousands of dollars on solar panels for your home you may want to consider what other, less expensive things you can do right now to reduce the total amount of electricity that you really need, for instance, some actions that you can take that will have a dramatic impact on your energy consumption are - double glazing windows, shutting off rooms to reduce heating requirements and installing energy efficient appliances and monitoring systems.

3. How much is it going to cost?
When considering costs you want to look at the cost of the technology as well as the cost of installation, with the technology you want to consider not only price but quality and other likely emerging technologies as well.

Price - The standard one kilowatt solar panel system costs between $12,000 and $15,000. A 2 kilowatt system costs about $20,000. The problem with photovoltaics is the high cost of refining silicon, a crucial component of the cell, to the ninety nine per cent purity required. Silicon represents about forty per cent of the cost of solar panels for homes. Whilst cheaper panels are becoming available you want to be careful when buying cheaper brands because some don’t last as long as you’d expect them to.

Quality - It’s impossible to tell a good panel from a bad one just by looking at them. Most of the good solar panels have branded names such as Schott Solar, Kaneka, BP Solar, Sharp, Kyocera, Unisolar and Suntech. The most important figures to look at are how much energy the system will produce each year versus the money spent, this also includes - how long the solar panels are likely to last. Also you should consider that, to be eligible for the government rebate panels must pass international testing and certification with testing performed by an international Electrotechnical Commission accredited lab but there’s concern about the quality of some panels on the market that don’t meet the standards.

Emerging Technologies - New “thin film” or “silver” technology is being tested which reduces the amount of silicon needed by up to seventy five per cent. Also, some companies are exploring non-silicon based solar cells which could see solar cells being embedded into manufactured roofing for houses and buildings.

Installation - The cost of installing a grid-connected solar system is between $9,000 and $40,000 depending on the size of your house and family, with such a high cost it pays to get a range of quotes and to ensure that the designer / installer is accredited, that means that they’re deemed qualified to design and install PV systems. Also, you should consider that in order to be eligible for government rebates you must use an accredited installer. An installer’s work is usually guaranteed for one year but ideally you should also look for someone who has a good reputation: how long have they been in business for?; Do they have an established track record and experience / expertise?; And also, be sure to check with their previous customers, think of it this way, almost anyone can get a driver’s license but not everyone is a good driver - it’s the same with accreditation, just because someone is accredited doesn’t make them a good person.

4. How can you offset that cost?
When looking for ways to offset the cost of your solar panels for homes projects you will want to investigate the likely impact of rebates, net metering and also financing arrangements if applicable.

Rebates - Make sure that the panel is approved for a government rebate - even if your household is ineligible for rebates, buying an approved panel will give you more confidence about it’s quality.

Net metering vs gross metering - Some governments are planning to adopt “feed-in-tarrifs” which increase the rate home owners are paid for producing electricity from solar panels. Gross metering is best for households because it means you’re paid the higher rate for all the electricity you produce. That system has been used in most countries where solar power has been successful. With net metering, you don’t know what you’ll get so it’s hard to estimate your systems’ payback time - a disincentive to investing in solar panels.

Financing - Many people are still experieincing frustration with regards to obtaining financing for their solar panels for homes projects which is a shame considering the environmental as well as financial benefits of solar panels for homes but more and more financing companies are understanding the importance of solar panels for homes as well as realising that solar panels for homes are usually installed by higher income, more affluent households - the average household would much rather buy a new big screen television or high performance car.

5. How can you best prepare your house for solar panels?
You may not be ready for installing solar panels in your home yet or perhaps you are building a new home with an inclination that you may decide to go solar in the future. If this is you then you may wish to ensure that your home is designed with passive solar design concepts in mind and build with a roof at the correct angle and facing in the correct direction. A flat roof with tar and chip roofing makes for easy installation of solar panels. If you already own a home, you may want to get it assessed to see whether your house is suitable for solar panels and perhaps get a list of recommendations on what you can do to prepare.

6. What other costs are likely to be incurred?
Other cost considerations relate to pre-installation, post-installation and safety factors.

Pre-Installation - Be sure to check out what local council approval is needed, you don’t want to spend all of that money without consulting your local council and community members. Also be sure to look into warranties and guarantees provided by manufacturers. Manufacturer warranties or guarantees range from five to twenty five years. Solar systems should last at least twenty five years, obviously, a warranty or guarantee for that length is best.

Post-Installation - You will want to consider the likely costs of maintenance, cleaning and replacement parts, whether you do this yourself or get someone else to do it, you will still need to factor in the time and cost of getting this done to ensure that your solar panels for homes system remains efficient for the longest time possible.

Safety - Unfortunately with the boom of the solar industry, there are a lot of companies around with bad practices and shonky certificates. Some panels have the “CE” mark which is self-certification and therefore completely meaningless because it is not independent and not worth anything. Poor quality panels and wiring could reult in electrocution or even house fires so it’s important to check that your installer is accredited and also has good references i.e. talk to their past customers! It’s your money so be sure not to waste it!

Starting with small projects first
Even if you have the money and are very keen to install a bazzillion solar panels on your roof it may help to start with smaller projects first so that you can get used to the technology and see if it is right for you. So smaller projects that you can start with include installing a solar pool heater, a solar hot water system or purchasing a portable solar panel system that can be used to power a few appliances at a time such as a TV, computer or BBQ.

Solar Pool Heater - You can buy a pre-fab system to heat your swimming pool or hot tub for several hundred dollars - this will pay for itself very quickly.

Solar Hot Water - Solar hot water uses simple thermal technology - similar to what happens if you leave a bottle of drinking water in direct sunlight. A solar hot water system costs up to three times more than a gas or electric set-up but at about $4,000, it is still much more affordable than solar electricity. A solar hot water system should pay for itself within five or ten years and because solar hot water tanks usually last twenty years, installing a solar hot water system can mean free hot water for up to ten years. Therefore solar hot water makes ecnomic as well as financial sense.

Portable Solar Panel System - It is possible to buy a mini-portable solar panel system which is big enough to power a computer, television as well as a few other smaller items for about $700 to $1,000, this is a great way to get started, get comfortable with how solar power works and you can always add more solar panels later if you find that you like it.

Conclusion
Unfortunately if you don’t include the environmental costs of coal-fired electricity when comparing them with solar, it becomes very difficult to justify the investment in solar panels for homes. Saving money is not what motivates the early adopters and if that’s all that motivates you, then perhaps going solar is not for you. Whilst it’s possible to reduce the cost of solar panels for your home by being diligent and doing your research to ensure that you are getting the best possible return on your investment - the cost of solar panels for homes is still the number one biggest issue preventing most people from going solar. Many of these factors are within your control but some are not. The technology is continuing to improve, rebates becoming more widely available and net metering policies becoming more consumer friendly, the question that you have to ask yourself is - is solar power right for me now? And if the answer is no, then what else could you be doing to achieve the same outcome - reducing your energy costs whilst helping out the envrionment.