In Buyer and Seller

Solar panels have long been considered one of the primary alternative sources of energy with potential to lower energy costs and carbon emissions. Experts estimate solar panels will only generate between 16% and 20% of electricity by 2050 (Solar City, 2016).  Their use in commercial, government buildings, and schools has increased steadily over the last two decades. However, their use in residential homes has not grown nearly as quickly, until just recently. The cost of solar panels is still a hindrance for many; although the solar panels have become far less expensive than when they were first introduced for residential use (Solar City, 2016).  As people have become more aware of their energy costs and the cost to the environment of using non-renewable energy sources, an increasing number are seriously considering solar panels as the primary source of electricity.  

Solar panels can be very beneficial for  the pocket book and for the environment; however, they will not benefit every person equally. Depending on where you live and how long you expect to live there, the financial benefits may not live up to the hype. There are other factors to consider before deciding to install solar panels. Here are some of the pros and cons:

Pro: Your Electricity Bill Will Go Down

It is why you install solar panels – to reduce your energy costs. When optimally utilized, solar panels can reduce your reliance on the electric companies. In some regions, your electric company will even pay you for reduced electrical use. Based on data compiled by the North Carolina Clean Energy Technology Center, in forty-two of the fifty largest U.S. cities, a fully financed solar panel system costs less than the electricity purchased from the local utility company (Solar City, 2016).

Con: The Cost to Install Can Be Very Expensive

The money you save in electrical costs will be needed to pay for the installation. The cost of solar panels have come down quite a bit in recent years, but they can still be expensive. Depending on how big your energy needs are, you could spend thousands of dollars for installation. A good portion of those costs could be offset by a 30% federal energy credit, but that is due to expire at the end of 2016 (Energy.gov, 2016). This opportunity for federal credit continues to be renewed, but it is important not to depend on this. Some solar panel firms offer financing; however, unless you plan to live in your home for more than fifteen years, you will never realize any savings after financing costs.

Pro: Solar Energy Can be Accessible Anywhere

Solar panels can be installed on any residential home anywhere. The can be especially useful for homes located in remote areas which may be outside the electrical grid. Depending on the area, solar energy, or some combination of solar and other forms of energy, may be less expensive than gas generated electricity (Energy.gov, 2016). Although, if your home is off of the electrical grid, solar panels may be one of your only choices.

Con: Solar Energy May Not Work as Well in Your Area

If you live in Seattle or Sioux City, then you are not likely to realize the full potential of solar energy simply because there is not enough sun all year long to create it. States like Arizona, New Mexico, California, Texas, and Utah have the greatest solar potential (Energy.gov, 2016). If you live in a state with low solar potential, you may have to rely more heavily on utility-produced energy, which will not lower your energy costs as much.

Pro: Solar Panels Can Last a Long Time

The great thing about solar panels is there are not any moving parts, unless your residence requires an apparatus for rotating the panels to follow the sun. For most residences, the panels just stay on top of the roof, which keeps maintenance cost low. They can, however, become weathered depending on the type of panel you use. Solar panels made with monocrystalline wafers are more expensive, but they are extremely durable, often coming with lifetime warranties. However, thin panels, though a lot less expensive, can succumb to weatherization, requiring more frequent replacement (Solar City, 2016).

Con: Generally, the electricity you use at night is generated from batteries that store solar energy during the day. Solar energy batteries can cost as much as $2,000 and weigh more than four hundred pounds. Higher quality batteries will need to be replaced every fifteen to twenty years, adding to the long term cost of solar energy (Energy.gov, 2016).

For the right house in the right location, solar panels will invariable reduce energy costs over a ten to twenty year period. If your utility company offers a buy-back program where they buy back your unused electricity you make out sooner. If the federal energy tax credit is still in place when you buy your panels, then you can reduce your breakeven point for installation. If you are considering solar panels as an alternative energy source, it would be important to fully crunch the numbers and look to the long-term to see if it makes financial sense (Solar City, 2016)..

Going green is vital in this world of climate change and recycling. Leaving this Earth for my grandchildren and their children is something that is inherent in all of us. Everyone wants to protect their family, whether that be installing brilliant solar panels on your Arizona home or opting for a different energy saving option in Seattle. Solar panels are a huge decision, so be sure that you weigh your options carefully. We can all do our part to ensure a cleaner Earth than the one we were born into. The power is now to clean up our world!

 

Eric Lawrence Frazier, MBA

President and CEO

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