Solar Panels Cost & Savings VS Electricity For Your Home
Are you considering making a switch from electricity to solar power? While both options are excellent for providing properties with energy, each alternative comes with its own pros and cons in terms of costs and savings.
Regarding the upfront cost, electric utility systems require no upfront money, while solar energy systems impose a significant upfront investment. Nevertheless, the former provides no control over the cost, whereas the latter offers short-term and long-term savings.
There is a multitude of electricians in Mechanicsburg Pennsylvania, offering residential and commercial electric services.
Learn more about the difference between electricity and solar panel savings.
What affects the cost of electricity?
The prices of electricity reflect the cost of financing, building, operating, and maintaining power plants, along with the power distribution lines system. The generation and transmission of electricity have to be performed through equipment, which imposes fuel and maintenance expenses. Electricity cost is influenced by fuel cost, weather conditions, the distribution system, and consumer type.
Since electricity is generated and distributed by using energy provided by fuel, the cost of fuel impacts its price. Since fuel costs tend to vary, so does the price of electricity. When there’s a high demand for power, the demand for fuel like natural gas increases fuel prices, as well as imposes higher costs for electricity production.
Another factor that has an influence on electricity costs is the weather. For instance, certain weather conditions like rain and snow represent water sources for generating hydropower, which is cost-effective. Conversely, the wind is capable of generating electricity owing to the use of wind turbines when provided with favorable wind speeds. Anyhow, the cooling or heating demand increase due to extreme temperatures, which drive the price of power up.
Furthermore, the system used for distributing and transmitting electricity involves maintenance costs, such as repair of system damage from harsh weather conditions or accidents. In certain states, prices are regulated by utility commissions or public services. Additionally, the type of consumer is another factor that influences the cost. For example, industrial consumers are charged less per kWh, as the generation and delivery of power are faster and less expensive.
Electricity cost in the U.S.
The average residential utility rate in the U.S. is about 12 cents per kWh. Almost a decade ago, in 2014, the average electricity bill per month was $114 prior to the application of taxes and fees. Regarding the monthly use of kWh, an average American household used about 910 kWh. Residential bills have gone up over the last decade and keep on surging. Click here to check out the definition for kilowatt-hours.
For instance, residents of Pennsylvania were charged 14.53 cents per kWh in October 2021 in the residential sector. Other states, such as Connecticut, charged the residential consumer group even higher utility rates of 22.85 per kWh. There are a couple of states that record the highest average price of residential electricity, including Massachusetts, Hawaii, Alaska, and Rhode Island.
In contrast, the states that record the lowest average price include Washington, Utah, and Idaho. The average price of electricity in the entire U.S. for the residential sector was $14.11 per kWh in October 2021, compared to $13.66 in October 2020. The fluctuations in cost are triggered by the changes in demand, the increase/decrease of fuel prices, the availability of generation sources, and power plants. Prices have a tendency of being the highest in the course of the summer months.
Solar power cost
Solar energy systems provide protection to homeowners in terms of preventing constant price fluctuations. The cost of solar panels has dropped by approximately twenty percent during the past five years. The installation expenses for a 10 kWh solar system range from $23,800 to $31,400 without calculating the tax credit benefits, which account for 26 percent.
Solar power expenses involve the purchase price, the land cost, the installation cost, system design, solar modules, etc. The price of solar panels varies across the U.S. because of different reasons, one of which is the system size. For example, the largest solar panel systems are installed in warm states exposed to plenty of sunshine, such as Florida, Nevada, and Arizona. The following link, https://worldpopulationreview.com/state-rankings/sunniest-states, provides a detailed list of the sunniest U.S. states in 2021.
The larger the solar system, the less consumers are charged per kWh. In general, warm states are characterized by lower pricing compared to cold states where pricing is higher. Ultimately, total pricing is almost the same in warm and cold states, as the former pays for larger system sizes, whereas the latter pays for smaller system sizes.
Solar panel cost for 10 kWh systems in Arizona is $23,300 on average. In contrast, the price for the same system in Washington is much higher, as high as $34,300. These costs are calculated before the 26% federal tax credit is applied. The expenses for solar panel installation are influenced by the system’s size, as larger systems cost more than systems with fewer panels.
Nevertheless, larger systems are considered more cost-efficient in the long run. If you install solar panels that cover all electricity use, you’d be making a larger investment but enjoy lower monthly expenses in the future. Another factor that affects solar panel prices is the equipment. The quality of the panels depends on their appearance, efficiency, and warranties.
Roof characteristics are an important pricing factor as well. South-facing roofs with a 30-degree slope provide an easier installation process for installers. In contrast, roofs with multiple levels and skylights require extra effort for the installation to be completed, which increases the expenses.
Labor is another essential pricing factor. Solar installers charge different sums for their services, depending on their warranties and track record. Those offering premium warranties charge higher sums for their installation jobs. Finally, the availability of rebates and incentives is also important, as it helps customers get more money back.
A final note
Weigh the pros and cons of both options before making a decision!