How Much Does Solar Energy Cost?

Many people see solar power as a very costly investment.  This is true however, the prices continue to fall each year making solar power and photovoltaic (PV) panels more cost friendly to the general public.  It has been predicted that the year 2014 will be a major stepping stone in the movement of photovoltaic (PV) energy.  According to the NPD’s latest research, it is estimated that one solar PV will have an overall cost of $0.20 per watt.  With costs expected to fall 6% throughout the 2014 year.  When comparing this to 2008, one solar PV cost approximately $0.60 per watt.

Solar power installation is a long-term investment that requires time and patience but will provide significant savings over the long run.  Having to put money upfront for this investment may be difficult as banks are becoming stricter on giving and providing loans today.  The question of how much do solar panels cost and how much do solar panels cost (on the roof) are two very different questions.

Solar Panels Cost

Solar panels have become a global product and costs remain standard.  Since 2008, the cost of panels has decreased, however there are a variety of types and panel efficiencies that play a role in the cost of solar panels.  When thinking in terms of adding solar panels to your roof, you need to think more about the cost of installation, permits, and other associated costs rather than the cost of the panels themselves.

Residential PV Installation Cost

Note: 1,000 watt (W) is equal to 1 kilowatt (kW)

United States (US): In 2013 the Solar Energy Industries Association (SEIA) estimated the average cost of PV installation for US residential homes was just below $5.00/W while non-residential systems were just below $4.00/W.

United Kingdom (UK):  According to SolStats the average cost for a 5 kW system in the UK costs between £15-20,000 for installation, while a 10 kW system costs between £25-45,000.

Today investing in solar power for your home is becoming increasingly common.  However, with installing solar power on one’s roof there are some concerns and factors that should be taken into account.  For example, the efficiency of solar panels is determined by the amount of exposure they have to the sunlight.   The steepness of the roof and which side of the house the sun rises and falls should be taken into account.

Solar Panel Efficiency

When determining which solar panel or PV panel is right for you, not only cost but the panels potential efficiency is an important factor to consider.  There are a large number of panel producers out there today, each providing customers with a slightly different efficiency and price.  Everyone has a different view on which solar panel would be the best ‘fit’ for them and researching your options is the best way to decide which panel is best to purchase.

In 2013, the Fraunhofer Institute for Solar Energy Systems ISE, Soitec, CEA-Leti and the Helmholtz Center Berlin announced their world record solar cell.  This cell has a 44.7% efficiency which makes the future and prices of solar energy promising.

What about Solar Thermal Energy?

Solar thermal energy (STE), is a highly efficient technology created to capture solar energy from the sun’s heat which is then used to run a heat engine which generates electricity.  STE is not the same as the PV energy or solar panels mentioned above, as they capture solar energy through the sun’s light and heat turning it directly into electricity.  Collectors of STE can be classified as either low-, medium-, or high- temperature collectors.  These solar collectors are also commonly known as solar hot water panels.

STE like PV energy requires an up-front cost; this cost will depend on the size of collectors you purchase as well as the size of tank you purchase.  For example, a family of four who uses the average amount of hot water, would most likely need two-four foot by ten foot solar collectors as well as a tank that holds 70-140 gallons of water.  Another thing to consider with STE is what type of climate you live in.

US: Depending on the size and type of tank and collectors you purchase, investment costs range from $4.20-$8.40/W. (note these prices are from ’09)

UK: Depending on the size and type of tank and collectors you purchase, a 0-5 kW system could cost you roughly £2,060/kW, a 5-10 kW system roughly £1,199/kW, and a 10-20 kW system roughly £1,025/kW.

Note: 1,000 watt (W) is equal to 1 kilowatt (kW)

Of course only a local retailer of STE could provide you with an exact or more accurate quote.   

Researchers are saying that by the year 2020, STE costs (for produced energy) could possibly be down as low as 12 cents per kWh, where there were 25 cents per kWh in 2013.

References:

1. Fraunhofer. (2013, December 23). World record solar cell with 44.7% efficiency. Retrieved from http://www.ise.fraunhofer.de/en/press-and-media/press-releases/presseinformationen-2013/world-record-solar-cell-with-44.7-efficiency
2. International Energy Agency. (2009). Solar concentrating thermal power renewable energy essentials: Concentrating solar thermal power. Retrieved from http://www.iea.org/publications/freepublications/publication/CSP_Essentials.pdf
3. The Conversation (2013, February 05). Solar thermal energy cost expected to halve: Csiro . Retrieved from http://theconversation.com/solar-thermal-energy-cost-expected-to-halve-csiro-11956