By switching to solar energy, millions of homeowners that are currently paying for electricity from fossil fuel power plants could become self-sustainable and profit from electricity they provide by collecting their own solar energy. Whether a homeowner decides to pay back the solar company with their energy savings or pay a lower rate for power, at some point the solar panels will pay for themselves.
The average American uses around 11,000 kWh per year, and at a rate of $0.1287/kWh, that totals over $1,400 spent on electricity in a single year (energysage, n.d.) Due to wide cost variations from state to state, many Americans are paying even more. Depending on a house’s location and the application, using solar energy can dramatically decrease the amount one spends on electricity in a given year (RGS Energy, n.d.) An overview of the cost benefits are given in the infographic and are discussed in more detail below.
An Overview of Cost Advantages
Solar roofs are one potential option for utilizing solar energy. Today there are two main solar roofing solutions that exist: solar panels and solar tiles. Solar panels cost an average of $3.50/W, making a normal 5 kWh system cost $17,500. In a Texas home, it would take around 16 years for the homeowner to save enough on electricity bills to cover the cost of installation, well within a typical 30 year warranty. After covering the cost, the homeowner could begin to profit by selling this energy back to the power grid. Tesla’s solar tiles are estimated to cost about $21.85/square foot. A typical American home has a 1,500 square foot roof, making the Tesla solar tiles come to a total of $32,775, (Green Tech Media, 2017) nearly twice the price of a solar panel roof. It is estimated that it would take a Texas home 30 years to see make back the cost of installation in electricity savings, just in time for a 30 year warranty. The performance differences are detailed in Product Comparison.
Homeowners can also lower tax bills by installing solar roofing. Tax credits that can help reduce annual tax payments are often given to homeowners and companies that utilize solar energy. Tax subsidies are also available to reduce the cost of solar roofing from the list price (Investopedia, 2015.)
The homeowner has the possibility to profit from the solar energy after the roof is paid off through “net metering.” Net metering allows for homeowners to sell unused collected energy back to the power grid. Results vary worldwide, but this method could result in a savings of more than $400 per year (Investopedia 2015.) A diagram of the process is shown below.
Net Metering
Credit: Solar Products Pro
In comparison, a normal, non-solar roof costs about $7.00/square foot, making a 1,500 square foot roof cost approximately $10,500. A typical roof lasts about 20 years and has no way of “paying for itself.”
No matter how big a roof is or where it is located, utilizing solar energy in your household could reduce the number of your electricity bills and the size of your carbon footprint. To see environmental benefits of solar energy, see Environmental Benefits.