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Is Solar Power Worth The Investment?

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Is Solar Power Worth The Investment? How Much Solar Costs

solar power worth the investment

With widespread electricity grid blackouts becoming more common and utility delivered electricity rates constantly rising, many home and business owners are asking is solar power worth the investment?  This question is not easy to answer because the economic rationale for installing a solar power generating system is dependent upon a number of variables.

Most homes and small businesses need a solar electricity generating system that is capable of generating 5,000 to 15,000 Watts (5 kilowatts to 15 kilowatts) of electricity to cover all of their daily electricity needs.  Larger businesses would require larger solar power systems.  A five (5) kilowatt electricity generation system costs between $25,000 to $50,000, while a ten (10) kilowatt solar electricity generation systems costs between $50,000 to $90,000.  These cost ranges include necessary equipment, such as an electricity inverter (which provides an even flow of electricity from a solar power system, so it does not damage sensitive electronics) and the cost to install a solar power system.  It is important to keep in mind that these are just the gross costs, and do not include any government incentives for installing solar power, which can greatly reduce the final cost of installing a solar electricity generating system.  The cost for installing solar electricity generating systems vary considerably because the installation cost is dictated by local labor rates, the types of solar panels used, and what kinds of accessories are purchased.

A typical solar power system is hooked up to the electrical grid for backup power during times when the sun is not shinning.  Home and business owners that want to live off the electrical grid and be fully independent of utilities need to spend an additional $2,500 to $5,000 for a battery bank, charger, and battery controller.  Solar battery banks provide electricity to a home or business when the sun is not available; however, they require some maintenance and must be replaced approximately every eight years.

Is Solar Power Worth The Investment? The Case For Going Solar

What home and business owners really want to know when they ask “is solar power worth the investment?” is will an investment in an on-site solar electricity generating system eventually pay for itself and save them money in the long run?  The answer to that question is “yes”, sooner or later.  In states with relatively high electrical utility rates (greater than 15 cents per kilowatt hour) and generous solar installation subsidies, the breakeven point for solar can come in as little as eight years or less.  After the breakeven point is reach, the savings start to add up, and can easily add up to thousands of dollars per year.  If one opts for battery backup for a solar power system, then other cost savings can be factored in, such as eliminating the need for other backup power devices (fossil fuel generator) and the avoidance of power outage related costs, such as spoiled food or flooded basements due to inoperable sump pumps.  However, the cost for periodic battery bank replacements must also be factor in.

To make solar power worth the investment, it is important to examine how much electricity a home or business is using and how electricity use can be decreased, by installing new energy efficient lighting and appliances, before installing a solar power system.  If less electricity is needed for a home or business, a smaller, less expensive solar electricity generating system can be installed, which can lessen the time needed to reach the breakeven point on a solar power investment.

Another important factor that may make solar power worth the investment is how a solar solar electricity generating system installed on a home or business increases the value of the home or business when the time comes to sell the property.  A recent study by Lawrence Berkeley National Laboratory that assessed thousands of real estate transactions in California determined that having a solar solar electricity generating system installed on a home or business increased the value of a home or business by about $5,500 for each kilowatt of solar generating capacity installed.  If one could get a premium of $55,000 when selling a building with a 10 kilowatt solar power system, then it would be easy to conclude that solar power is worth the investment.

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