We’ve all watched it. You know, the show on the Discovery Channel that runs experiments to either confirm or bust popular myths. Picture that as you read this blog, because that’s what we’re doing. The only difference is we’re busting solar myths by using real-world experiences from the over 1,200 solar systems we’ve installed.
Here are the 5 most common solar energy misconceptions that we will be addressing in this blog:
- Solar systems cost too much
- The payback for a solar system is way too long.
- Solar technology keeps improving - I should wait to go solar
- We don’t get enough sun where I live - Solar won’t work
- Solar will hurt my ability to sell my property
Now, it’s time to get started. Let’s go bust some solar myths!
Solar Myth #1 - Solar systems cost too much
We hear people say this all the time, “Only rich people can afford solar.” The truth is solar isn’t cheap, but it’s more affordable and available to more people now than it’s ever been. Solar installation costs have dropped 70% over the last decade. Couple that with the great tax incentives and grants and you’ll see why this myth doesn’t stand a chance. If you pay a high monthly electric bill, owe federal taxes, and own your property, solar will likely be an affordable investment for you. Over the long-term, solar is far less expensive than paying your utility company in perpetuity.
Below, you will find a breakdown of the cost to install a solar system that would cover a $120, $600, and $1,200 monthly electric bill. These are just average numbers and your final cost could be less or more depending on several variables. Check out this blog for a more in-depth breakdown of the variables that make up the cost to install solar panels.
The Cost of Solar Breakdown
|Solar System Size||Total Installed Cost||Federal Tax Credit||Depreciation||Installation Cost After Incentives||30 Year Savings Electric Savings|
|Residential||$120||10 kW (32 panels)||$30,600||$7,956||$0||$22,644||$20,556|
|Commercial||$600||50 kW (157 panels)||$112,500||$29,250||$21,532||$61,717||$154,283|
|Commercial||$1,200||100 kW (438 panels)||$211,300||$54,938||$40,443||$115,919||$316,081|
These are the factors that busted this common myth:
- Installation costs have dropped 70% over the last decade.
- There is a 26% federal tax credit and accelerated depreciation is available for commercial projects. The savings from both can be recaptured the year your system is energized.
- The cost of living will only continue to increase and electric costs are no exception. High electric rates make solar more affordable.
- You’re taking the money you’re already paying (your electric bill) and putting it towards solar. The only difference is solar payments have an end date.
Solar Myth #2 - The payback for a solar system is way too long
“It will take me at least 25 years to pay for the panels.” This is a common thought in the marketplace, and it’s time to set the record straight. If the conditions are right, it’s simply not true.
We compiled customer data from the past five years and found the average payback for commercial projects is 9.2 years. Homeowners are averaging a payback of 15.9 years. These customers have an average ROI of 13.19% and 6.1% respectively. For comparison sake, according to Nerd Wallet, the average stock market return on investment is 10%. And solar is a much safer investment that isn’t impacted by the market's ups and downs.
Many of the top solar panel brands provide a 25 to 30-year performance warranty on their panels. This means many of our customers are set up for decades of free electricity generation.
To dig a little deeper, below we’ve provided a chart that shows the average ROI and payback for solar in the mid-Atlantic states we serve.
|ROI||Payback in Years||ROI||Payback in Years||ROI||Payback in Years|
Let’s recap what busted this myth:
- Our customers are averaging a payback of 9.2 years (commercial) and 15.9 years (homeowners).
- Most solar panels come with a 25 to 30-year performance warranty. Panels will continue to produce energy for 30+ years.
- Many of our customers are able to get financing with payments equal to their average electric bill.
Solar Myth #3 - Solar technology keeps improving. I should wait to go solar
Yes, solar technology is improving and panel efficiency is getting better. Currently, the best solar panels have an efficiency level of 16.6-21.1%. In an article by Clean Technica, they predict technology improvements will have efficiency levels at 20% for low-end technology and 26% for high-end technology by 2027.
But by waiting a few years for the panels to increase their efficiency by 5%, you are missing out on significant savings that will outgain any efficiency gains. You are still paying for electric while waiting for panel improvements, and you’re missing out on the tax incentives that are dropping each year and will be gone in a few short years (for homeowners).
This myth was busted! Here’s why:
- Panel efficiency is already very high.
- Technology is only expected to raise efficiency levels by 5% in the next eight years.
- The opportunity to save money now greatly outweighs any potential efficiency gains that would come with waiting a few years.
- You can get the same production that you will get in 2027 by adding just a few more panels.
Solar Myth #4 - We don’t get enough sun where I live. Solar won’t work
Can you get sunburn on a cloudy day? I can assure you from experience the answer is a resounding yes! The sun’s rays are still shining down on us even on cloudy days and that’s all solar panels need to produce electricity.
The production on cloudy days will be less than on a clear, sunny day, but the system will still produce electricity. A reputable solar installer will account for your local weather conditions when designing the system.
Another popular thought that goes along with this misconception is solar will only work in warm climates. Solar panels don’t use heat to produce energy, it’s the amount of sunlight and it’s strength that contributes to solar production. Many tests have shown that higher temperatures can reduce panel efficiency and reduce the system’s energy output.
Solar Myth #5 - Solar will hurt my ability to sell my property
The impact a solar energy system has on your resell value depends on whether the system is owned, leased, or under a Power Purchase Agreement (PPA). Leases and PPAs can present challenges due to the long-term commitments that come with these deals. A solar system that was paid for through cash or a loan presents a completely different scenario.
If you own the solar system, you are selling a property with a reduced electric bill for the remainder of the system’s life. That cost-savings has a real cash value. According to a study completed by the Berkeley Lab, they found from examining data in 8 states over an 11-year span that homebuyers are willing to pay $4 per watt for a solar system. That equates to roughly an additional $15k for the average-sized residential solar system. Check out this blog to learn how to determine the “added” value of a solar system.
These solar myths have been busted! Thanks for adventuring along with us.
Do you need more proof? We encourage you to connect with solar system owners to get their feedback and speak with reputable solar installers. All good solar installers have nothing to hide and will be willing to answer all your questions.