Watts Up With Solar?

By: Charlotte Justine A. Gavina

Gross Cost of a Solar Panel System 

The overall cost of a solar panel system consists of various components. Equipment costs encompass the expenses of the solar panels themselves, inverters, mounting racks, batteries (if applicable), and other essential elements. Prices can vary depending on factors such as the brand, quality, and equipment capacity. The Balance of System (BOS) components play a significant role in the total cost. These components include wiring, cabling, junction boxes, and other electrical and safety equipment necessary to connect the solar panels to your electrical system. Also, professional labor and installation services are vital for ensuring a safe and efficient solar system. Labor costs may differ based on the complexity of the installation and the geographical region. Before proceeding with solar panel installation, acquiring permits and undergoing inspections are essential to ensure adherence to local building and electrical codes. Regarding maintenance expenses, solar panels typically require minimal upkeep as rain and wind can naturally clean away debris. However, it is advisable to clean them at least twice a year to remove leaves and dirt, which may obstruct the sun's rays and reduce the system's efficiency [1].

Here are the factors affecting Solar Panel Savings [2]:

1. System Size: The size and capacity of the solar panel system impact the amount of energy it can generate, resulting in higher or lower savings potential.

2. Solar Panel Efficiency: Higher efficiency panels convert more sunlight into electricity, leading to increased energy production and greater savings.

3. Location: The amount of sunlight a location receives affects the overall energy generation and, thus, the savings potential.

4. Electricity Rates: The cost of electricity from your utility provider influences the savings achieved through solar panels. Higher electricity rates can result in greater savings.

5. Incentives and Rebates: The availability of incentives, rebates, and tax credits can significantly reduce the upfront cost of the solar system, increasing overall savings.

6. Energy Consumption: The electricity consumption patterns of the property impact how much solar energy is used directly, influencing savings.

Solar Panel Payback Period 

Solar Payback Period refers to the time it takes for the savings generated from a solar panel system to cover the initial investment cost. In simpler terms, it calculates how long it will take for you to recoup the money spent on installing solar panels through the energy savings they provide. It is an essential metric that helps potential solar adopters understand the economic feasibility of going solar [3].

To calculate the Solar Payback Period:

(Total Cost - Rebates/Incentives) / (Estimated savings/year) = Solar Payback Period (yrs)   [4]

On average, solar panels have a payback period of 7-10 years, which is impressive considering their 25-year warranty and potential for extended longevity. This means that there is a substantial portion, approximately 15-18 years, of the warranty period remaining to amass significant energy savings [5].

A shorter Solar Payback Period brings several advantages:

• Quick ROI: A faster return on investment means you start saving money sooner and can recoup your initial expenses in a shorter time frame.

• Long-term Savings: Once the payback period is reached, your solar panels continue to generate savings on your energy bills, providing free electricity.

• Environmental Benefit: Going solar helps reduce greenhouse gas emissions, contributing to a greener and more sustainable future.

References:

[1] R. Brill, “How Much Do Solar Panels Cost?,” Forbes Home, Sep. 13, 2022. https://www.forbes.com/home-improvement/solar/cost-of-solar-panels/

[2] C. Crail, “How Much Do Solar Panels Save The Average Homeowner?,” Forbes Home, May 11, 2023. https://www.forbes.com/home-improvement/solar/how-much-solar-panels-save/#:~:text=Factors%20That%20Influence%20Savings%201%20Local%20Grid%20Prices.

[3] V. Aggarwal, “How to calculate solar panel payback period (ROI),” Solar News, Oct. 26, 2018. https://news.energysage.com/understanding-your-solar-panel-payback-period/

[4] “Solar ROI: How to Calculate Solar Panel Costs and Savings,” SolarNRG, Feb. 08, 2023. https://solarnrg.ph/blog/solar-roi-how-to-calculate-solar-panel-costs-and-savings/.

[5] S. Wigness, “What Is the Average Payback Period for Solar Panels?,” Solar.com, Nov. 11, 2022. https://www.solar.com/learn/what-is-the-average-payback-period-for-solar-panels/.

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