With the cost of fossil fuels rising and electricity rates stable, more and more people are looking to solar power to meet their energy needs. It has been reported that between 2010 and 2015, the share of US homes using solar power grew from 0.6% to 5.6%.
While solar power is a viable solution, the economics often don’t make sense. In 2016, the price of solar energy in China dropped by 23% after an effective government subsidy program was put into effect.
So, is solar power a good investment? Let’s examine the numbers.
How Expensive Is Solar Energy?
The price of solar power depends on many factors, including the type of technology used and where it is produced. It is important to bear in mind that generating power from solar is not free. The average price of a residential solar system has been estimated at around $15,000, with a peak price of up to $26,000 depending on the system purchased.
If we compare this to the price of traditional power generation methods, which include fossil fuels and nuclear power, the cost of solar energy becomes more apparent. According to the Global Solar Market Report, published by the Global Market Insights team at Market Research Company
…the medium-sized solar installation market was valued at just over $6 billion in 2015 and is anticipated to grow from $12.9 billion in 2020. The report forecasted a CAGR of 13.8% for the next five years.
What’s the Return On Investment (ROI) Like For Solar Energy?
To calculate the ROI for a solar power system, you must first understand the payback period, or how long it will take for the investment to pay for itself. The shorter the payback period, the faster the ROI will be and the more attractive it will be as an investment.
When it comes to solar power, the payback period varies widely based on what type of technology is used and where it is produced. For example, PV (photovoltaic) solar cells have a relatively short payback period of between 4 and 6 years, while amorphous silicon cells have a longer payback period of between 8 and 10 years.
If you’re looking for an income property investment, the shorter the payback period the better, as you’ll be able to recoup your investment in a relatively short amount of time. The long term investment for solar power is looking more and more like a bad choice as the costs keep rising.
Is Solar Power Worth It For My Home?
The short answer is yes, but it depends on your location and how much electricity you use. With the cost of fossil fuels increasing and the cost of electricity remaining relatively stable, more people are looking to solar power. However, the economics of generating power from solar are often not very appealing. This is mostly due to the long payback period, which makes the initial investment look like a bad choice. It is important to assess how much electricity your home uses and if you need more or less energy than you produce.
If you are looking for a way to reduce your impact on the environment and you produce a lot of energy, then solar power is a viable option. However, if you’re looking for an income property investment and you use less energy, then it may not be the best choice. The key is to assess your needs and how you use energy.
With the cost of fossil fuels rising and electricity rates remaining relatively stable, more and more people are turning to solar power. It has been reported that between 2010 and 2015, the share of US homes using solar power grew from 0.6% to 5.6%. While this is a positive sign that more people are becoming aware of the dangers posed by fossil fuels, the economics often don’t make sense. The price of solar power varies widely based on the type of technology used and where it is produced. The key is to assess how much electricity your home uses and if you need more or less energy than you produce.