How Much Do Home Solar Panels Cost?
When you start thinking about adding a residential solar system to your home, the first question you’ll likely want answered is, how much is this going to cost me? A realistic answer to that question is, of course, it depends. Several factors must be taken into consideration to determine the cost of a photovoltaic (PV) system for your specific home and your specific location.
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The first step is establishing whether your home is a good candidate for a residential solar system. For roof-mounted systems, the strength and area of the roof must be evaluated, as well as the roof’s orientation to the sun. While the size of a home won’t greatly influence installation costs, the amount of electricity that the home consumes, and what proportion of that electricity will be offset by solar energy, must be determined before an accurate cost estimate can be given.
Average Home Solar Costs
According to data collected by the U.S. Energy Information Administration (EIA), in 2009, the last year that data was analyzed, the energy consumed in an average American home was 908 kilowatt-hours per month. The average size for home solar systems is between 2 and 5 kilowatts. Average solar costs for residential PV systems range from $15,000 to $40,000, before rebates and tax credits.
The amount you can save by installing solar panels will not only be affected by the cost of conventional energy at your location, but by the solar rebates and tax credits for installations that may be available where you live. While the federal government’s tax credit incentive program is available to all Americans who wish to go solar, incentive programs offered at the state and local level vary from location to location.
The Federal 30% Off Tax Credit Program
The federal government incentive program covers up to 30% of the cost of installing a residential solar system, provided in the form of a tax credit. Some states offer cash rebates as well, often in conjunction with public utilities.
In most states, public utilities are required to invest in renewable energy, especially solar electricity. In order to meet these mandates, utilities offer rebates, incentives, loans and buy-back programs to their customers who install PV systems, making it easy to earn credit from your utility by going solar. Cities and municipalities may offer additional incentive programs as well, like the excellent top 10 solar cities in California.
Installation costs may be further offset through “buy-back” programs. Many states offer a Solar Renewable Energy Credit (SREC) for each megawatt-hour of solar-generated electricity. Depending on local policies, the credits can be sold on the solar market or back to the public utility, often for upwards of $600 apiece.
Some utilities offer other options, such as providing credit for surplus energy, aka net metering, that a home PV system generates to the homeowner’s electric bill.
Case Study: Gainesville, Florida
To illustrate variables that affect the overall costs and savings of your residential solar system, consider the incentive programs offered in Gainesville, Florida. In general, Florida solar rebates have become victim to their own success. In most major cities in Florida, the funds for rebate programs offered by public utilities are exhausted for both this year and next.
Gainesville is an exception. Gainesville Regional Utility (GRU) residential customers can receive rebates up to $7,500. GRU bases their per-watt rebates on the PV system’s efficiency, as measured by the amount of sunlight available at the home’s location, with a $1.50 per-watt rebate offered for homeowners in the sunniest locations. Less energy-efficient locations may receive a $1.15 per-watt rebate.
GRU also gives customers with home solar panels the option to sell 100% of their solar-generated electricity back to them, at a rate of $.32 per kilowatt hour. Alternately, customers who choose to “net meter,” selling back only the extra solar-generated electricity that the home does not use, are offered a flat rebate. GRU also offers 6% annual interest solar loans to customers who wish to install a residential system.
The wide variety of incentive programs available throughout the country makes general estimates about the cost of going solar difficult, if not impossible. The very best way to get an accurate estimate of how much it costs to have a solar system installed on your home is to get a free evaluation by a professional solar contractor.
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Posted on November 30th in Solar Funding by Brittany.