Installing solar panels can reduce home electricity bills, but not without an initial investment. Not to mention they are a key element to helping with climate change and clean energy. Over recent years, the cost of installing solar panels has decreased, but when will the cost of solar panels come down enough to make them accessible to everyone?
The Cost of Solar Panel Installation
According to the Solar Energy Industries Association (SEIA), the cost of solar panel installation has fallen from over $50,000 for a 6 kW/Hour system in 2011, to between $16,000 to $21,000 in 2022. This decrease is more than a 60% drop in installation cost, and officials expect that number to decrease further in the coming years.
The current cost of solar energy in 2022 is between 7¢/kWh and 19.36¢/kWh. The U.S. Solar Energy Technologies Office “has announced a goal to reduce the benchmark leveled cost of electricity (LCOE) generated by utility-scale photovoltaics (UPV) to 2¢/kWh by 2030” (source.) That’s a reduction of 5¢/kWh and 17.36¢/kWh!
The predicted drop in cost of solar panel prices is the increased efficiency of factories producing solar panel modules, better technological advances leading to more efficient solar panel systems, and increased awareness and support of the need for a solar power shift.
Can Everyone Afford Solar Panel Systems Now?
Although many homeowners look at the initial installation cost of solar panels and balk, the truth is that there are available discounts that can bring that installation cost down further. For example, the government currently has a federal program that offers homeowners a significant tax credit if they install a solar panel system.
The solar Investment Tax Credit gives homeowners a federal tax deduction of 30% of the total cost of their solar panel installation. On top of this, most states also offer their own discount program that gives homeowners additional savings.
And, if these two savings programs aren’t enough, many states also offer buy-back programs. Buy-back programs allow homeowners to sell their excess solar energy back to utility companies, so homeowners make money off their solar panel systems!
But How Much Can Homeowners Save With Solar Panels?
The question that most homeowners want answered, though, is – how much can they save by installing a residential solar power system? The answer to this question varies. On average, it takes six to ten years for a solar panel system to pay for itself.
Most residential solar panel systems pay for themselves within seven years, though, after which point homeowners begin to see savings. How much savings depends on various factors, but most homes see a cumulative savings of between $10,000 and $40,000 over the lifetime of their solar panel system. This savings breaks down to approximately $50 to $200 savings per month.
Solar Panels are an Affordable Future
The cost of solar panel installation has decreased drastically over recent years, and as more people continue to learn about sustainability, demand is increasing, and homeowners hope these costs will continue to come down to make solar energy more affordable for everyone.
In the meantime, though, there are some great programs available that offer rebates and tax credits to those who choose to install alternative energy sources!