How Much Does Solar Energy Cost?

While renewable energy sources such as wind and solar power are becoming more cost-effective, the technology still carries a high price tag. With the price of oil continuing to rise, the cost of generating solar power with traditional equipment is becoming more than many businesses can afford.

Fortunately, there are several options for generating solar power without needing to invest in expensive equipment. One of the most popular and cost-effective ways of generating solar power is through solar leasing. What is solar leasing, and how much does it cost? Let’s take a quick look.

What Is Solar Leasing?

Put simply, solar leasing is when you lease solar equipment (such as panels or racking systems) from a company that specializes in solar leases. Essentially, you rent the equipment from the company and pay for it over an agreed-upon period of time. In some cases, electricity generated by the solar equipment is fed back into the grid, generating revenue for both you and the leasing company.

This may sound somewhat complicated, but in reality, it’s quite simple. Once you enter into a solar leasing agreement with a company, they will handle all the details of installing the solar equipment (typically on your property) and collecting the revenue.

When you compare solar leasing to buying all the equipment yourself, the upfront costs are significantly lower. There is also no maintenance to consider, as the equipment is typically pre-installed and ready to use. In some cases, you can get an energy discount or a solar panel system for free.

How Much Does Solar Leasing Cost?

The cost of solar leasing is generally based on two components: 1) the cost of the solar equipment 2) the cost of the installation. Let’s take a quick look at each one.

The cost of the solar equipment is usually determined by a combination of factors, including the size and the megawatt capacity of the system you’re leasing. There are several different types of solar panels out there, with the most common ones being crystalline silicon and cadmium telluride. Let’s take a quick look at the price of each one.

  • Solar Equipment Cost Chart
  • Cadmium Telluride (CdTe) Solar Panels
  • Cadmium Telluride (CdTe) Modules
  • Crystalline Silicon Solar Panels
  • Crystalline Silicon Modules

Depending on the type of product, the cost of solar equipment can range from a few hundred dollars to several thousand dollars per watt. This cost includes the price of the product itself as well as any installation costs (such as labor). To give you an idea of what this cost might look like, here are some prices for different types of solar equipment.

Cadmium Telluride (CdTe) Solar Panels

Cadmium telluride (CdTe) solar panels are more efficient than traditional panels and produce more energy per unit area. This makes them more affordable, too. While the price of these panels will vary based on the size, it’s typically in the $20,000 to $30,000 per year range. This is far cheaper than buying your own and setting up a system, which could cost you several thousand dollars per year in electricity costs alone.

Cadmium telluride (CdTe) solar panels are also excellent when it comes to energy storage, which allows you to take advantage of off-peak power hours and lower your energy bills during these times. The downside, however, is that these solar panels require more maintenance than regular panels and have a shorter lifespan (generally about 8 to 10 years). If this is something that concerns you, then stick with what you know – it’s still relatively affordable, but you’re giving up a little bit of efficiency in return for future-proofing your investment.

Cadmium Telluride (CdTe) Modules

Cadmium telluride (CdTe) modules are the basic building blocks that make up a solar panel. These are the small solar panels that you would connect to a larger panel. Similar to cadmium telluride (CdTe) solar panels, cadmium telluride (CdTe) modules have a $20,000 to $30,000 price tag per year and last about 8 to 10 years before they need to be replaced. You can find several different types of cadmium telluride (CdTe) modules, all with different capacities (from small to medium).

The main difference between these two types of solar panels is the way they’re connected. Cadmium telluride (CdTe) solar panels are commonly wired in series, which means they’re connected (or wired) together to form a single circuit. Cadmium telluride (CdTe) modules, on the other hand, are commonly wired in parallel, meaning they’re not directly connected (or wired) to each other but can be connected (or wired) in any combination. This makes parallel wiring a bit more flexible.

Crystalline Silicon Solar Panels

Crystalline silicon solar panels, often just called solar cells, are also quite common and can be found in almost every home. These cells are used to generate electricity on an industrial scale for commercial buildings and utilities. They also have found their way into space, where they’re used on the International Space Station and on several spacecraft.

These solar panels are more energy-efficient than the previous two types and, as a result, cost a bit more. Their price will vary based on a variety of factors, including the size of the system you’re buying. Smaller systems (for example, those under 15kW) can be found for under $30,000 per year, while larger ones (such as those over 45kW) can be purchased for well over $50,000 per year. Most solar panels fall into this middle ground (a 15 to 45kW system costs $35,000 to $50,000 per year).

One of the things to keep in mind with crystalline silicon solar panels is that they don’t require any maintenance and are generally very reliable. This makes them an excellent choice for any business or commercial entity seeking to generate solar power. In many cases, larger companies will purchase multiple systems (up to five) and connect them in series, effectively creating a larger, more efficient system than they would be capable of creating individually.

Crystalline Silicon Modules

Crystalline silicon modules are essentially just like crystalline silicon solar panels, only smaller in size. They’re also quite a bit more affordable, costing only a few thousand dollars per year to operate. They’re commonly used to help power devices such as cell phones and other portable electronics. These modules also work quite well in tandem with solar panels, either being used individually or in conjunction with other types of renewable energy sources (such as wind power). For example, say you have a solar panel that produces 3kW of power and a crystalline silicon module that generates 1kW of power – together, this is now a 4kW system. In some cases, you can find 3kW to 5kW crystalline silicon modules for around $5,000 to $7,000 per year.

You might be wondering why would you want to rent solar equipment instead of buying it yourself? Well, let’s take a quick look at the economics of the situation. Say you’re a business that seeks to enter the solar energy market and has determined that solar power is the way forward. You look into the cost of purchasing all the necessary equipment, including solar panels, wiring, and other necessary items, and it comes to $150,000. Further, you assume a two-year budgeting period and a 20% discount for early birds (which can be had for some leasing companies). Using these assumptions, your ROI (return on investment) on the solar equipment would be 7.3 years, based on a cost of $150,000 and interest of 20% annually. This doesn’t even factor in the energy savings you’ll attain from having a functioning solar system – these are significant.

Obviously, these are all just estimations and you should not use them to determine what type of equipment to buy or lease. Instead, use them to simply get an idea of what the cost might be.

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