Solar energy systems, whether photovoltaic (PV) or concentrated solar power (CSP), convert sunlight into electricity. The technology is growing in popularity as a renewable source of clean, low-cost electricity.
The cost of installing a solar system can vary widely, but it’s a major investment that can pay off over time. NREL analysts use bottom-up models to analyze all of the factors that influence system and project development costs, including economies of scale, efficiency, location, and company structure.
Cost
The cost of a solar energy system can vary widely, depending on the size of the panels, where they are mounted, and whether you install battery storage. However, average residential systems usually range between $15,000 and $25,000.
The primary cost of a solar energy system is the upfront purchase of the panels, inverter, and batteries. These items are expensive, but they can last for 20 years or more with minimal maintenance.
Aside from the upfront costs, the most important factor determining the value of a solar energy system is the amount of sunlight your home receives on a daily basis. The sun’s intensity varies by location and can be influenced by your roof type, orientation to the sun, and shade.
Utilities also have tiered pricing plans that increase the price of electricity during peak usage times, making solar power more valuable for homeowners in these areas. The exact timing and magnitude of these rate changes can make the difference between a system that offsets high-cost marginal consumption or one that doesn’t.
Efficiency
Solar energy systems are a great way to offset your electricity bill and help the environment. They also help reduce your carbon footprint and are a renewable resource that is free to use.
The efficiency of a solar cell is defined as the percentage of incident solar radiation that is converted into usable energy. The efficiency of a solar cell can vary depending on air mass, spectrum of light and temperature.
One of the major factors that affects the efficiency of a solar cell is direct recombination, in which electrons that have been generated by sunlight collide with holes within the material and recombine, allowing them to contribute to an electric current.
The efficiency of solar cells is largely dependent on the type of cell, such as monocrystalline or polycrystalline silicon. These types of cells have higher power outputs than other types of cells and have been steadily improving their efficiency over the years.
Environmental Impacts
A solar energy system can be a great way to reduce greenhouse gas emissions that are caused by the burning of fossil fuels. This is because solar panels are a renewable source of energy and won’t run out.
However, solar power can also have negative impacts on the environment. These can include land use and habitat loss, water consumption, and the manufacture of hazardous materials.
Construction of large solar facilities involves clearing and grading land, which can result in soil compaction, alteration of drainage channels, and increased runoff and erosion. This can impact the environment, especially in arid regions where water shortages are common.
Additionally, solar plants may use or spill chemicals at their sites, such as dust suppressants or dielectric fluids, which can be toxic and pose spill risks. This can cause environmental pollution if the chemicals are not disposed of properly. Fortunately, some companies are trying to reduce these impacts.
Tax Credits
If you own a solar energy system, there are some potential tax credits you can claim. One credit is the federal Investment Tax Credit, which can reduce your tax liability by up to 30% of the cost of your solar system.
The credit is available for residential and commercial properties that are not already eligible for a state incentive. It applies to equipment that uses solar energy to generate electricity, heat or cool a building (or provide hot water for use in the building), or to provide solar process heat.
In addition to the federal ITC, most states offer their own upfront rebates and tax credits for solar. These incentives can vary from state to state and may be based on net metering rules, which allow homeowners to earn credits on their electric bills for the excess energy they send back to the grid.