The solar panel cost has reduced considerably over the past few years. Along with becoming economical, they have become more efficient too. To determine the cost of a solar panel, it is important to consider various components that make up the cost.
In this article, we will look at the major terms that impact the price of the solar system.
What Is the Change in Solar Panel Cost Over the Last Few Years?
In the last ten years, the average cost of solar panels has reduced considerably. Comparing the panel cost from 2010 to now, there is approx. 90% reduction in price. Furthermore, the worldwide solar deployment has increased by around 400%.
This considerable rate of growth along the worldwide solar supply chain has lowered prices. For homeowners who are planning to install a solar panel should not let this opportunity go away. Utility-scale solar installations have become cheaper compared to other forms of energy generation in different areas of the world.
This makes solar panels an eco-friendly replacement for dirtier or older power plants that are driven on natural and coal gas. The use of these panels will also help in cutting down the cost of utility payments.
Important Terms to Consider When Determining the Cost of Solar Panel
Price of Solar Panel Per Watt
This is the price that a homeowner has to pay for the installation of every watt of solar power. This factor considers the size of the complete solar system. It is beneficial to compare the relative price of solar bids.
To compute the “price per watt” for any solar system, divide the gross system cost by the number of watts present in the system. This can differ based on solar panel brands, total wattage, etc.
Solar Panel Price Per kWh
The price per kWh determines the price of the solar system for every unit of power it generates. It is the basis to evaluate the energy costs from the solar as well as the electric utility.
The price per kilowatt-hour is used to compute the value of solar power relative to the cost of buying the electric power. The average price per kWh from electricity providers in the US is around 13 cents/kWh. On the contrary, the typical price of solar power is between 6 and 8 cents.
Besides solar panels, a solar system comprises several components such as an inverter, a mounting system, a racking system, electrical hookups, and conduits. The installation price of all these components is important to understand to arrive at the overall project cost.
Incentives for solar power are another key component to determine the solar system cost. The widely available incentive i.e., the federal tax credit is 26%. Consult a professional power advisor to understand the full solar panel installation cost and the available incentive for the solar system.
Due to the decline in the cost of solar panels, they have become more affordable and accessible to homeowners. Knowledge of the key parts of solar systems and major terms to evaluate solar s