Solar Panels: Comparing Costs
Yahoo Finance recently published an article with a good overview on the cost of solar panels. To help our readers understand what this information means to them, here is how southeastern Minnesota compares.
Read the original article here.
How much do solar panels cost?
Article: “The cost to buy a solar system ranges from $15,000 to $20,000 after federal tax credits.”
We agree. The “average” Minnesota homeowner’s array would cost $17,500. Fortunately, some of the area utilities offer additional rebates that bring the cost of solar panels down further:
- Final cost for Rochester, Owatonna and Austin Public Utility customers: $13,900
- Final cost for Xcel customers: $10,500
While some houses (probably less than 98%) use solar to get off the electrical grid, the majority of homes remain connected to their electric utility. This allows them to feed their extra solar energy into the system and pull energy out when their electrical needs are greater than their electrical production.
Article: “Experts estimate that most solar systems pay for themselves in 5 to 7 years. However, these numbers are rough averages.”
Solar panels purchased by businesses and farms will pay for themselves in 5 years, often sooner. This is because businesses and farms can depreciate the equipment (and have access to non-debt financing, to boot.) This may also be the payback rate for locations like California and Florida that have more direct sunlight, and whose climates are mild enough they don’t require top-of-the-line equipment.
The “average” Minnesota homeowner is looking at an 11-year payback for solar panels with utility rebates, or a 13-year payback without.
Measured this way, 68% of Americans’ ecological impact is from carbon emissions. According to a 2014 study by the Environmental Protection Agency, the single largest source of Americans’ carbon emissions is from electricity production. While some of this can be reduced by switching to LED lighting, unplugging unused appliances and other good practices, the only way to offset the impact entirely is by switching to a sustainable electricity source like solar.
Advantages and Disadvantages of Solar
We’ve already covered in depth the two major benefits of solar power: major economic savings and a drastically reduced carbon footprint. Other benefits pertain to people who own electric cars (who wouldn’t want to do away with the electric bill AND the gas bill?) and tech-thusiasts who want to charge their iPhones using the same technology powering the International Space Station.
But since not everyone has solar, what are the holdups?
First and foremost, not every property is suitable for residential solar. It requires a southern-facing space with little to obstructions (which excludes many older neighborhoods with mature trees). For those who want to know if their home would be a candidate for solar power, Solar Connection will send a representative to your property for a site assessment at no charge. For those who can’t purchase their own systems, we encourage participation in community solar programs. Though the savings is not as great, it still has all of the ecological benefits of going solar.
Another disadvantage of solar panels is that they can’t produce electricity at night or when covered with snow (a serious consideration here in Minnesota), and production falls sharply when panels are shaded by clouds, trees or other obstructions. Amazingly, however, 44 states—including Minnesota—have eliminated this obstacle through “net metering” laws.
Here’s how it works: Since homes feeding solar power onto the grid during the day make it so electrical plants don’t have to work as hard, those homes are allowed to take that much energy back off the grid at night at little or no extra cost. That means the energy produced during the day pays for the energy you use at night, and the energy produced during the summer pays for the energy you use during the winter. Thanks to net metering, a family can produce enough electricity to meet their energy needs year-round, even in Minnesota.
The other major barrier to solar is the upfront cost. The residential solar business originally boomed thanks to “solar leases.” In essence, homeowners allowed companies to put company-owned panels onto their homes; in exchange, the homeowners use those panels’ electricity at a discount. Solar leasing allowed families to use clean energy at no upfront cost for less money than paying the utility.
But the economic savings of owning a system—even if it means financing—far outpace the benefits of leasing, so Solar Connection has established an exclusive financing partnership with Home Federal Bank of Rochester, allowing customers to pay the industry’s lowest interest rates. [Click here to learn more about solar cost and financing.]
If you want to know whether solar will fit your lifestyle, your property and your budget, the next step is to request to be contacted by a Solar Connection energy consultant. A site assessment will tell you how many solar panels you need to cover your lifestyle, how many you can fit onto your property, the overall cost, and the end savings. Site assessments cost nothing and require no commitments. (And lest you worry about being pressured into an unwise choice, we’re so nice not even our salespeople are pushy.)