Does It Really Pay Off To Invest In Residential Solar Panels

When looking for ways to achieve sustainability goals, installing solar panels in a building might be one of the options you’re considering. After all, solar energy is a clean and renewable resource available to almost everyone, so it’s almost a shame not to use it.

However, investing in a proper solar power system takes quite a bit of time and money. The question remains of whether or not it’ll be worth the investment. If a justification is what you need, perhaps this article will be helpful to you.

How Solar Panels Generate Electricity

First, it’s essential to understand how solar panels generate electricity, as it may affect your decision to get one. Solar panels are fabricated from tiny Photovoltaic (PV) cells underneath a glass surface layer. These cells convert the sunlight that hits the solar panel into electricity.

It’s necessary to remember that light, not heat, makes solar panels work. So a solar generator can still be installed if it’s installed in an area with much sunlight but not much heat. It may even be more beneficial since solar panels have a specific operating temperature and can maintain their peak efficiency for longer in a chilly environment. Staying within the maximum productive range for a solar panel is vital to get the most bang for your buck.

BAPV system vs. BIPV system

Another factor that can dictate the upfront costs of installing solar panels is choosing between the BAPV and BIPV methods. Let’s see how these two are different:

  • Building Applied Photovoltaics (BAPV)

The BAPV system is the most common form of using solar panels, as there’s no need for a significant renovation. All that needs to be checked is if the rooftop or side of a building can handle the added weight of the associated mounting hardware and the solar panels themselves.

For many people, the BAPV system is more than enough as it reduces the upfront investment needed to go green.

  • Building Integrated Photovoltaics (BAPV)

If the building is planned to have an extensive renovation or new construction, perhaps the BAPV system would be better. What makes these different is that you incorporate the solar panels themselves into the exterior structure of the building. Instead of paying for the installation of windows or roofing material, why not use solar panels for the roofs and windows instead?

The BAPV system is compelling because there’s no need to have additional labor and material costs after project completion since the solar panels are already integrated into the structure.

Payback Period of Solar Panels

Now it’s time for the nitty-gritty details of solar power’s value proposition. Since the return on investment time is different for everyone, it’s essential to have a method to calculate it yourself. This formula will help you decide if investing in a residential solar panel is worth it.

(Total Cost of The System – Incentives Received) ÷ Electricity Cost ÷ Electricity Usage Per Year = Payback Period

  • Total System Cost – This would be the expenses incurred for installing your system. Shipping, permitting, equipment, labor, and other project costs are added here.
  • Incentives Received – The government usually has some form of credit or incentive given to those willing to invest in green technologies. In the US, you can benefit from the Solar Investment Tax Credit, which provides a 26% tax credit. There might also be other local or state incentives, and you’ll add those to the equation.
  • Electricity Cost – For this one, you must refer to your power provider for an accurate reference.
  • Electricity Usage Per Year – Lastly, the amount of electricity you use in a year. This figure will usually be printed across your monthly bills, so you can multiply your current bill by 12 to get a reference point.

Calculation Example

Let’s try to grasp better the formula given by solving an example scenario.

For example, you spent $15,000 on your total costs meaning your 26% Tax Incentive will be $3,900

The US average kWh cost is around $0.167 in September 2022, and let’s say you use about 8,000 kWh per year.

($15,000 – $3,900) ÷ $0.167/kWh ÷ 8,000 kWh/year = 8.31 years

So in this example, it’ll take around eight years and four months for the solar panels to break even.

A Few Reminders

At this point, you may look at the calculation and see that it takes multiple years before breaking even. However, it’s vital to remember that your solar panels will generate electricity decades after installation.

In addition, companies usually have some form of warranty to ensure your solar panels are protected and perform up to spec.

Lastly, a proper cleaning schedule is necessary to ensure the solar panels remain clean and generate electricity at peak efficiency. Since roof access can be hazardous, you may also want to install roof hatches on your property to get to your solar panels easier.

The Future Looks Green

With all the research and development into solar panel technology, it’s safe to assume that solar panels will only get better and cheaper with time. 

Give yourself and others a chance at happy and healthy earth by investing in a sturdy solar panel system will ensure you contribute to a greener future today. 

Home Base Project Team
Home Base Project Team
At The Home Base Project, we offer practical, real-life tips and inspiration about DIY, decorating and gardening. The Home Base Project provide the best information about home renovation and design, connecting home design enthusiasts and home professionals across the world.