Despite the increasing availability environmentally-friendly solar energy panels most Americans are still resistant to utilizing this service in their own home because of perceptions of high costs.

Image by Pujanak (source: Wikimedia Commons)

In a study released just last week researchers from Applied Materials found that 48% of Americans would not consider solar energy panels in their home at this time. However, there was a catch. More than 80% of these same people said that they would change their mind if it meant saving money.

The good news is that technological advances and government incentives made available in the last few years has dramatically dropped the cost of this type of green-energy. In fact, solar energy is now not only a cost-efficient form of energy but can actually save users money in the long run. The problem is that most people still view solar energy panels as too expensive for implementation.

When solar energy panels were first introduced the cost of installation and maintenance was very high. Previously solar panels could cost as much as $12 per watt. Now, the average price ranges between $3-$4 per watt with some companies even offering products that dip as low as $0.75 per watt. The Department of Energy estimates that by 2017 total installation costs will average below $1 per watt.

How Are Solar Energy Installation Prices Calculated?

Step 1: Determine your average daily energy usage
In order to determine how much solar energy panels will cost to install in your home or business you first need to determine how much energy you consume. This figure is expressed in kilowatt hours (kWh) and can be determined by looking back at your past electricity bills. Your bill should show a total number of “Kilowatt-Hours Used” for the month. Take that number and multiply it by 1000 to get the monthly watt/hours of electricity. Then divide this by the number of days in a month to determine your average daily kWh usage (example: [1200 kWh x 1000] / 30 days = 40,000 kWh per day).

Step 2: Calculate how much electricity you will need
Once your have your average daily kWh then you will need to determine how many hours of sunlight you have available each day to power your solar panels. It is best to use the fewest number of hours, such as the number of hours of sunlight on the shortest day of the year in your location. Divide your average daily kWh usage by the number of hours of daylight your home gets and that will give you the amount of electricity you need to power your home. (Example: 40,000 kWh per day / 8 hours of sunlight = 5,000 kWh/hour of daylight)

Step 3: Determine Your Pre-incentive Cost
Different manufactures charge different rates for solar power panels, however typically they run between $3-$4 per watt. Multiply your kWh/hour of daylight to determine your total cost per watt. (Example: 5,000 kWh x $4 = $20,000 cost for solar panel installation).


Step 4: Subtract incentives for Net Cost
Fortunately, right now there are many state and federal tax breaks and incentives available in order to encourage consumers to install solar electricity. Some incentives may vary between states however, until 2016 federal taxes are offering a 30% tax break on the cost of installation. So, for example, if you were installing San Diego solar energy in California you would benefit from the 30% federal tax break in addition to benefits from the California Solar Initiative which in combination with the federal incentive can reduce the cost by up to 40%. In other words, your $20,000 installation less 40% in incentives gives you a net cost of $12,000.

How do these prices compare to other forms of energy?

According to an analysis run by the investment blogger group, The Montley Fool, at $4 per watt (with a 30% capacity factor over a 20-year period with maintenance costs included) the cost of energy per kilowatt-hour is approximately $0.19. Compared to the most expensive energy states the US such as Hawaii, who pays $0.28 per kWh, the cost of solar energy represents significant savings.

Keep in mind that these numbers are estimations and the cost of solar energy in your home or business is subject to many factors including location, sunlight, manufacturer, maintenance costs, etc.

San Diego Solar Energy
A Quarter of Americans Would Consider Solar Power


Guest post by Robyn Nazar .
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Robyn Nazar is an avid health and environmental writer. She is an active contributor on various websites and is committed to reaching others to help them improve their lives and the world around them.