Last month, your neighbors across the street got their new solar system installed – that makes the third house going solar this year alone. With the price of electricity going up and up, solar power is starting to look pretty good, right?
There are some obvious questions – like what’s the cost of solar per watt? What’s the overall cost of going solar? You read somewhere that the price of going solar has dropped every year since 2009 – and that sure isn’t true with your electric bill.
Let’s take a look at the answers to these questions.
Residential Solar Power Costs
The cost of installing residential solar panels and converting to solar energy decreases year after year. That’s a fact. There are a few reasons, but the result is that solar energy is more affordable than ever.
Solar Panel Prices
The first reason is that the price of a solar panel has steadily declined for years. That’s due to more and more manufacturers entering the market, vast improvements in manufacturing efficiencies, and sheer competitive pressure.
Improved Efficiency
Second, solar panels have gotten more efficient over time thanks to technological improvements. As a result, more energy from each panel means fewer panels are needed.
More Competition
And last – certainly not least – solar installers have gotten far more efficient and affordable. With more solar installation companies, the business is far more competitive, lowering costs to consumers.
The Cost of Solar Per Watt
When you’re deciding to install a solar system – to lower your utilities – it’s natural to look at the cost per watt. However, bear in mind that the cost per watt you are paying your utility company never stops – you keep paying month after month, year after year.
The opposite is true when you install a solar system – once you’ve paid for the initial installation, your electricity is free. So you won’t be paying monthly bills again over the lifetime of your system. That’s the beauty of solar – your electricity is free. You’re independent of the grid and immune to ever-rising prices.
Of course, you need to make that initial investment in installing your solar system. And that’s where Return on Investment (ROI) comes in. The questions to ask are how much are you paying your electric company per year? Then, after adding an annual rate increase, how much will you pay your electric company over 25 years (the life of a solar system)?
Now compare that to the installed price of your solar system, and you’ll see what your savings are. So what’s the installed cost per watt of solar? Nationally it’s hovering right around $3 per watt.
The Bottom Line
After you do your ROI calculations, the actual cost of residential solar systems continues to get more competitive year by year – and the cost of solar per watt continues to drop.
When was the last time your electric bill dropped? You know the answer. Never. And that makes converting to solar an excellent investment!
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