When talking about energy and the environment, people usually think about the cost of producing energy versus the cost of buying it. While this is an important consideration, you should also be thinking about the environmental impact of producing electricity versus the environmental impact of using an alternative energy source.
In this blog post, we’ll compare the cost of producing electricity with solar energy to other commonly used and accepted sources of energy, such as coal and natural gas. Since solar energy is such a new industry, there is not a lot of data available on the costs associated with it. However, as the industry grows, more and more data will become available, allowing us to compare the true cost of owning and running a solar panel system to other energy sources.
Cost of Producing Electricity with Solar Energy
While we don’t have exact numbers available, there is enough data to make an estimate. According to the Solar Energy Industries Association (SEIA), the cost of producing electricity with solar panel systems in 2017 was $0.33 per kilowatt-hour (kWh) and is expected to drop to $0.15 per kWh by 2022.
This is a 64% decrease in the cost of producing electricity with solar energy in the last five years and an 88% decrease since 2012. These numbers can vary slightly from year to year based on the cost of silicon, the number of hours of sunlight, and the prevailing price of electricity. However, the trend is clear — the cost of producing electricity with solar energy is decreasing every year.
This is largely thanks to the falling cost of solar cell technology and the increase of solar panel systems installed on rooftops around the world. As more and more homes and businesses choose to go solar, the cost of solar power will likely continue to decline.
Cost of Buying Electricity
The cost of buying electricity varies by location and is usually higher than the cost of producing it. This is because most sources of energy are produced by large companies that distribute the cost of purchasing equipment and energy among numerous customers. In order to determine the cost of buying electricity, you have to add up all of the costs associated with it. These include the costs of buying equipment used to produce the electricity (such as coal-fired power plants and natural gas-fired power plants), transportation costs of getting the equipment to your location, and the cost of buying the electricity itself.
The good news is that you don’t need to buy all of this equipment to produce your own electricity. If you live in an area where sunshine is plentiful, you can produce enough electricity to meet your needs with just a photovoltaic solar panel system and a battery backup system. This is because the electricity generated by the sun is free.
If you live in an area where electricity is not readily available, you can purchase electricity from a utility company at cheaper rates. However, in areas where there is a lot of sunshine, you should strongly consider producing your own electricity to save money and to help reduce your carbon footprint.
The Benefits of Electricity Produced by Solar Energy
Since electricity produced by solar energy is free, there is no reason not to use it. The fact is that it produces no harmful emissions and there is a lot of worldwide interest in going green and becoming more eco-friendly. Countries such as Germany and Norway have actually mandated that all new buildings must be constructed with the help of renewable energy sources, such as solar power.
With the cost of electricity continuing to decline thanks to renewable energy sources, more and more people are choosing to switch to solar power. In fact, as of 2022, there are 24 million solar-powered homes around the world. This is up from 15 million in 2019 and 12.9 million in 2018. The good news is that more and more people are realizing the benefits of solar energy and the advantages it has over traditional sources of energy. Here are just a few:
It’s Free
One of the main reasons people are turning to renewable energy sources, such as solar power, is because it’s free. When you compare this to the cost of electricity from coal-fired power plants or natural gas-fired power plants, which are the two most popular energy sources in the US, you’ll soon see why so many are choosing this option.
It’s important to keep in mind that producing your own electricity with solar energy will not be as easy as you’d think. You’ll have to do some research and make sure you get the right advice before taking the leap. This is because there are many different types of solar panel systems out there, all with their advantages and disadvantages. You’ll have to be sure you choose the right solar energy system for your home or business.
It Has a Long Life
Another advantage of electricity produced by solar energy is that it has a long life. Thanks to advances in technology and materials, the average lifespan of a solar panel system is expected to reach 25 years. If you consider that many traditional energy sources, such as coal-fired power plants and natural gas-fired power plants, have lifespans of only a few years, you’ll understand why many people are choosing to go green.
The good news is that with proper maintenance and a little bit of know-how, you can ensure that your solar panel system will continue to function for years to come. This is vital if you want to save as much as possible on your energy bills and prevent any unforeseen expenses.
It Helps Reduce Your Carbon Footprint
The third and final advantage of electricity produced by solar energy is that it helps reduce your carbon footprint. When you produce your own electricity with solar energy, you’re not contributing to the mass consumption of fossil fuels and you’re not causing climate change. Instead, you’re helping to reduce pollution and preserve the environment.
Electricity produced by solar energy is also a renewable resource, meaning it can be replenished as long as the sun keeps shining. This is vital if you want to have a positive impact on the environment and prevent climate change from becoming a real threat.
How Much Does a Coal-Fired Power Plant Cost to Run?
One of the most popular and well-known sources of energy is coal, which is a common source of power for electricity generation. While it’s true that the coal-fired power plant has a large impact on the environment because of the emissions it creates, the cost of operating one is relatively low. In fact, the cost of operating a coal-fired power plant is around $0.18 per kWh.
This is extremely low compared to the cost of electricity from other sources, such as natural gas-fired power plants. The price of natural gas varies by location and can be either higher or lower than the cost of coal. However, the average price of natural gas is around $0.90 per kWh, more than twice the cost of coal.
Cost of Operating A Natural Gas-Fired Power Plant
The cost of operating a natural gas-fired power plant is generally a bit higher than the cost of a coal-fired power plant but it’s still relatively low compared to other available energy sources. The price of natural gas also varies by location and can be either higher or lower than the cost of coal but, in most cases, it is around 1 to 2 cents per kWh higher than the cost of coal. This is because, in most areas, there is more demand for natural gas than what is available. Therefore, it costs more to transport the natural gas to where it’s needed than it does to produce it locally. Additionally, there are regulations in place that prevent power generators from profiting off of the gas they sell. This essentially prevents gas-fired power plants from having negative pricing, which would make them cheaper than other sources of energy. This is why, as noted by the US Energy Information Administration (EIA), the cost of operating a natural gas-fired power plant is, on average, around 14% higher than the cost of operating a coal-fired power plant.
How Much Does It Cost to Operate A Wind Power Plant?
Wind power plants are a popular choice for those who want to produce their own electricity. Not only are they relatively easy to operate but their cost of production is also relatively low. The cost of producing electricity with a wind power plant is around $0.05 per kWh.
This is because most wind turbine companies make money not just from selling the turbines but also from the electricity generated by them. This is also why, if you live in an area where the wind is constantly pushing against you, wind power can be a cheaper source of energy than traditional electricity generators. However, if you live in an area where the wind is not as strong, it could be more expensive to produce electricity with a wind power system than it is to purchase electricity from a utility company.