What You Should Know Before Installing Solar Powered Panels

What You Should Know Before Installing Solar Powered Panels

Solar power is a clean, renewable energy source that can help you save money on your electricity bills. If you have been considering going solar but have not yet committed, it pays to do some research before making a final decision. Here are six things you need to know before installing solar panels:

1. Solar panel costs vary depending on the type of panels used, their efficiency rate, and other factors. Most solar installations involve roof mounted solar photovoltaic (PV) panels that are weatherproofed for indoor or outdoor use. The average cost of installing these PV panels is between $15,000 to $25,000, depending on how many kilowatts you need, and the size of your roof. Solar thermal panels are available for installation on a home’s south-facing side or as a ground mounted system near your house. The average cost to install solar thermal systems is $5,000 for 1,500 square feet of water heating area.

2. There are four types of solar panel installations: stand alone, grid tied, hybrid-tied, and battery backup. Standalone systems are usually less expensive than other types of installations but will not offer any power in the event of a utility outage. Grid tied solar panels are connected directly to your home’s electrical system. Utility companies buy excess electricity that is generated by these grids for use when there is a power outage. Hybrid-tied systems function the same as grid tied ones but if there is not enough sun to produce energy, then your utility company will provide electricity. Battery backup systems store excess solar energy during the day for use at night or when there is an electrical outage. These are very expensive installations ranging from $10,000 to $20,000 and typically cost an additional $4,000 to $5,000 per year for battery replacement.

3. Solar panels are more efficient in some parts of the country than others. The sunniest place in the lower 48 states is Yuma, Arizona where solar energy reaches an average of 5 kWh/m²/day. Yuma is followed by a band of states in the Southwest where solar energy averages 4 kWh/m²/day. The least sunny location for solar energy production is Seattle, Washington where panels produce 1.8 kWh/m²/day on average.

4. Solar panel efficiency declines over time and decreases even faster when they get dirty. The average efficiency of a solar panel is around 15 percent and degrades to approximately 11 percent after 25 years. Cleaning your panels will improve their energy efficiency by as much as 8 percent, which means you will need fewer solar panels to produce the same amount of electricity.

5. Most states offer financial incentives to homeowners who install solar power systems. The most popular of these is the 30% federal tax credit for solar panel installations. You can also receive accelerated depreciation, exemption from sales tax, property tax exemptions, and rebates in certain states. The state website run by NREL maintains a list of incentives offered by each state.

6. Solar panels typically pay for themselves within seven years. After that point, you will begin saving money on your utility bills. You can expect to save as much as $60,000 over 20 years, after taking into account the cost of borrowing money.