What is the cost of solar power in 2018?
Major strides in the solar industry started ten years ago. Since then, solar panels have dropped in cost over 70 recent. Due to the dramatic drop in cost, solar panel systems for houses are taking off at a remarkable rate. You’ve likely heard solar energy can reduce your utility bill, but how much do solar panels really cost? The best way to calculate the average cost of solar panels is to look at its price in dollar per watt and examine the average return on investment.
What is the cost of solar panels?
The cost of solar panels for your home is determined by the size of the system. The size of your system is determined by the amount of sun that shines on your roof, slat of your roof, and the amount of energy you use. At Encōr Solar we take all of these factors, and more, into account when we create a custom proposal for your solar panels.
In 2018, solar panel costs range from $11,380 to $14,990 (after tax credits). Because price paid per watt ranges from $2.71 to $3.57 and the average U.S household system size is 6 kW (6,000 watts), the average gross solar panel cost is $18,840. This has become one of the best times to get a high return on investment on solar with the ITC’s 30% tax incentive that ends in 2019.
Should I still put off buying a solar power system for my home until solar panels get cheaper?
It is no longer worthwhile to put off buying solar panels for your home in 2018 because future price falls are not likely to come and each month you’re missing out on potential solar savings.
In the last ten years, we’ve seen massive drops in solar panel cost and those are not starting to level off. With the addition of tariffs and the ITC dropping their tax incentive will continue to limit the drop in cost. The other risk you are taking is risking that the cost of solar will continue to fall at a quicker rate than what you’re paying for electricity to your utility provider.
So for example, if you are spending $200 per month on electricity a solar system would have to fall more than $2400 in a year (after allowing for the 30% tax credit) for you to break even on that decision. This means the gross cost of systems would have to fall by $3428 or almost 19%.
If you are waiting to install solar panels you need to hope for a 19% drop in solar panel cost in the next year, which is not likely. If you were to wait two years you would need them to fall 38% just to bring you back to break even because of the extra electricity bills you will pay in that two year period to the utility company.
Do solar panels add value to a home?
A new study done by the LBL analyzed the sales of over 20,000 homes in more than 7 states. Their findings found that homes with solar sold at a premium, increase the equity in a home. Through this study, it became clear that there was an increase in home value, but the question becomes how much? The LBL found that the average home solar for an additional $3 per watt on average.
Example: a 6 kilowatt (kW) solar system (our average customer size) will offer 6,000 watts of power. A home with solar should sell for about ($3 x 6,000W =) $18,000 more in most state, and even more in CA which sells for $4 more per watt.
2018 has become one of the best years to receive a high ROI on solar panels. With the decrease in cost over the last ten years and benefits of the ITC tax incentive, you can start saving month one with solar and receive tens of thousands of savings during the lifetime of your panels. If you are ready to start saving on power start with a custom quote from Encōr Solar.
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