Learn about solar energy
Solar energy is all around us. Learn how solar panels harness the power of the sun to produce electricity.
Solar energy: what you need to know
Solar power is simply usable energy generated from the sun in the form of either electric or thermal energy. Solar energy is captured in a variety of ways, with the most common being a solar photovoltaic system, or PV system, that converts the sun’s rays into usable electricity. Aside from using photovoltaics to generate electricity, solar thermal energy, or concentrating solar power (CSP), is commonly used to heat indoor spaces or fluids. Residential and commercial property owners can install solar hot water systems and design their buildings with passive solar heating in mind to fully take advantage of the sun’s energy with solar technology.
Types of solar energy systems
Interested in benefiting from solar power? Solar panels are installed at three main scales: residential, commercial, and utility. Homeowners can take advantage of residential-scale solar, typically in the form of rooftop solar or in ground-mounted solar installed in open land. Generally, residential solar systems are between 5 and 20 kilowatts (kW), depending on the size of the home.
Commercial solar energy projects are typically installed at a greater scale than residential solar. While individual installations can vary greatly in size and cost, commercial-scale solar arrays serve a consistent purpose: to provide on-site solar power to businesses and nonprofits. Finally, utility-scale solar projects are typically large-scale solar power plants that are several megawatts (MW) in size — utility-scale solar installations provide solar energy to a large number of utility customers.
For some solar shoppers who may not be able to install solar on their property due to cost or other factors, community solar is a viable solar option that more directly connects utility-scale solar energy projects to residential consumers. As such, community solar farms are typically built in central locations as opposed to on any single property. Subscribers (homeowners, renters, businesses, or non-profits) can join a community solar project to receive many of the benefits of solar power without installing solar panels on their property.
How do solar panels work?
A solar panel (also known as a solar module) consists of a layer of silicon cells, a metal frame, a glass casing unit, and wiring to transfer electric current from the silicon. Silicon (atomic #14 on the periodic table) is a nonmetal with conductive properties that allow it to absorb and convert sunlight into usable electricity. When light hits a silicon cell, the light causes electrons in the silicon to be set in motion, initiating a flow of electric current. This is known as the “photovoltaic effect,” and it describes the general functionality of solar panel technology.
The science of generating electricity with solar panels boils down to this photovoltaic effect. It was first discovered in 1839 by Edmond Becquerel and can be thought of as a property of specific materials (known as semiconductors) that allows them to create an electric current when they are exposed to sunlight.
The photovoltaic process works through the following broad steps:
- The silicon photovoltaic solar cell absorbs solar radiation
- When the sun’s rays interact with the silicon cell, electrons begin to move, creating a flow of electric current
- Wires capture and feed this direct current (DC) electricity to a solar inverter to be converted to alternating current (AC) electricity
A brief history of solar power
In 1954, Bell Labs developed the first silicon photovoltaic cell. Although solar energy had previously been captured and converted into usable energy through various methods, only after 1954 did solar power begin to become a viable source of electricity to power devices over extended periods of time. The first solar cells converted solar radiation to electricity at an efficiency of 4 percent — for reference, many widely available solar panels today can convert sunlight to solar power at above 20 percent efficiency, a number constantly on the rise. Although solar energy adoption was slow at first, a number of state and federal incentives and policies contributed to driving down the cost of solar far enough to become more widely adopted.
The cost of solar energy
Concurrent with an increase in solar efficiency, the cost of solar panels has fallen substantially. In the last decade alone, the cost of a solar panel installation fell over 70 percent, and many industry experts predict that will continue to fall in the years to come.
Additionally, depending upon where you live, several rebates or incentives for solar power may contribute towards lowering the cost of solar energy even further. Nationwide, the federal Investment Tax Credit (ITC) is one of the primary incentives available to anyone interested in solar energy, as it allows you to deduct 30 percent of the cost of installing a solar array system from your federal taxes. This incentive won’t last forever: in 2033, the federal ITC steps down to 26% and it will go away completely for residential solar installations in 2035. Many states and utilities offer further incentives (such as net metering) in addition to the federal ITC, dropping the cost of solar power even further.
Interested in seeing what solar will cost you? Try our solar calculator for a quick estimate.
Solar energy is a renewable power source
Solar energy is a clean, inexpensive, renewable power source that is harnessable nearly everywhere in the world — any point where sunlight hits the surface of the earth is a potential location to generate solar power. And since solar energy comes from the sun, it represents a limitless source of power. Renewable energy technologies generate electricity from resources that are infinite.
Compare producing electricity with renewable resources to fossil fuels: it took hundreds of thousands of years for oil, gas and coal to form. So, every time one of those resources is burned to create electricity (and emissions!), that finite resource is moved marginally closer to depletion. Using a renewable resource — such as wind, solar and hydropower — to generate electricity does not deplete that resource. There will always be consistent sunlight shining on Earth’s surface, and after turning sunlight into electricity, there is still an infinite amount of sunlight to turn into electricity in the future. That is what makes solar power, by nature, renewable energy.
While the current electricity mix in the United States is still made up largely of fossil fuels like oil and gas, renewable energy sources like solar are steadily becoming a larger part of the country’s energy profile as the cost becomes more competitive.
Should you go solar?
When it comes to installing solar panels and switching to a more eco-friendly energy source, there’s not a one-size-fits-all approach. There are several questions you should ask to help determine if your home or business is a good candidate for solar:
- How much electricity do you consume and how much does electricity cost in your area? The more electricity you use, and the more you pay for it, the more you’ll save by going solar.
- Do you own your home? If you live in a multi-family home or rent the property, it will be much more difficult to install solar than if you own a single-family home.
- Is your roof good for solar? The ideal roof for solar would be one that’s pretty spacious, is in good condition, isn’t too complex, is southern-facing, and receives plenty of direct sunlight. If not, you should consider if you have land space for a ground-mounted system.
- Are there local, reputable solar companies in your area that can perform the installation? If you don’t live in an area with multiple installers competing for your business, you may end up paying a premium.
- What incentives are available where you live? Local and state incentives could end up saving you thousands of dollars on your solar energy system, significantly shortening your payback period.
If some of these characteristics aren’t aligned with your situation but you’re still interested in going solar, read our article about if solar is right for you for more information on whether you’re a good fit.
What to know about the solar industry
According to the Solar Energy Industries Association (SEIA), solar capacity has grown about 33 percent, on average, over the past decade. In fact, the Department of Energy (DOE) reports that the United States has about 97.2 gigawatts (GW) of installed solar power capacity to date — enough to provide clean energy to about 18 million homes.
As solar capacity continues to grow, so too does the need for new solar jobs. From installing to manufacturing to performing operations and maintenance to educating consumers, there are a number of things you could be doing as a solar industry employee! As of December 2021, the solar industry supported 255,037 jobs based on data from the Interstate Renewable Energy Council (IREC)’s National Solar Jobs Census — a 9.2% increase from 2020.
The Rapid proliferation of solar power nationwide and globally has also led to parallel growth in several adjacent areas. Notably, solar battery systems, electric vehicles, and heat pumps are all sectors poised to explode alongside the solar industry by augmenting the benefits of solar.
Want to support the solar industry? Consider switching your electricity generation source to solar power! Whether you install solar panels on your home or business, or subscribe to a community solar farm, you’ll be adding to the total capacity of installed solar energy, while helping grow the clean energy economy.
Misinformation is derailing renewable energy projects across the United States
A wind turbine is silhouetted against the sky at sunset near Ellsworth, Kansas. The 300-foot-tall turbine is among the 134 units that make up the Post Rock Wind Farm.
On a winter night in early 2016, Jeremy Kitson gathered in his buddy’s large shed with some neighbors to plan their fight against a proposed wind farm in rural Van Wert County, Ohio. The project would be about a mile from his home.
From the beginning, Kitson — who teaches physics and chemistry at the local high school — knew he didn’t want the turbines anywhere near him. He had heard from folks who lived near another wind project about 10 miles away that the turbines were noisy and that they couldn’t sleep.
There were so many people saying that it’s horrible, you do not want to live under these things,’ Kitson says.
He and his neighbors went on the offensive. I was just like, there’s got to be a way to beat ’em, he says of the developer, Apex Clean Energy. You got to outsmart them. You got to figure out the science. You got to figure out the economic arguments. You got to figure out what they’re going to say and figure out how to counter it.
At the shed, according to Kitson, they agreed that part of their outreach would involve posting information on a community page called Citizens for Clear Skies, which ultimately grew to more than 770 followers.
In between posts selling anti-wind yard signs and posts about public meetings opposing local wind projects, there were posts that spread false, misleading and questionable information about wind energy. Links to stories about wind turbine noise causing birth defects in Portuguese horses. Posts about the health effects of low frequency infrasound, also called wind turbine syndrome. Posts about wind energy not actually reducing carbon dioxide emissions. Photos of wind turbines breaking, burning and falling — some in nearby counties and states, but some in Germany and New Zealand. According to 2014 data from the Department of Energy, the most recent available, out of the then-40,000 turbines in the U.S., there had been fewer than 40 incidents.
An anti-wind turbine sign stands in the front yard of a farmhouse in Glenville, Minn., in January 2018. Opponents of wind power are successfully stalling or rejecting wind farm projects across the country. Charlie Neibergall/AP hide caption
An anti-wind turbine sign stands in the front yard of a farmhouse in Glenville, Minn., in January 2018. Opponents of wind power are successfully stalling or rejecting wind farm projects across the country.
Kitson, the administrator of the page, says he knows that these accidents aren’t typical. Those events are not likely. We know that, Kitson says. But Kitson has seen a broken piece of a fallen turbine blade himself, which got him worrying about how the fiberglass might affect the integrity of the soil and the crops. So he posts the photos and articles, many of which he receives from an anti-wind email list. I do that just to try to show people what’s possible.
Kitson’s group is one of dozens in the United States and abroad that oppose utility-scale wind and solar projects. Researchers say that in many groups, misinformation is raising doubts about renewable energy and slowing or derailing projects.
The opposition comes at a time when climate scientists say the world must shift quickly away from fossil fuels to avoid the worst impacts of climate change. But 60% of U.S. electricity still comes from carbon-based fuels.
For the Biden administration to hit its target of an electricity sector free of fossil fuels by 2035, the country has to double or triple the wind and solar power capacity it installs over the next few years and maintain that higher level of deployments for about a decade, says Kelly Speakes-Backman, who leads the Energy Department’s Office of Energy Efficiency and Renewable Energy.
President Biden takes notes during a meeting to discuss clean energy efforts with CEOs of U.S. electric utility companies at the White House in February 2022. Anna Moneymaker/Getty Images hide caption
President Biden takes notes during a meeting to discuss clean energy efforts with CEOs of U.S. electric utility companies at the White House in February 2022.
Anna Moneymaker/Getty Images
Yet every single rural utility-scale wind and solar project needs local or state approval to get built, says Sarah Mills, who researches rural renewable energy at the University of Michigan. And she says it’s in those often-fractious discussions about approval that misinformation is sometimes halting and stalling the installation of the renewables the climate needs. At the end of the day, if local governments are not setting rules that allow for the infrastructure to be sited, those policies cannot be achieved, Mills says.
Misinformation gets mixed up in decisions over renewable projects
Last year, a Department of Energy study found that setback regulations now represent the single-greatest barrier to securing locations for wind projects in the U.S. Setbacks limit how close wind projects can be to buildings, and Mills says they often make sense to reduce things such as noise and shadow flicker, the moving shadows and strobing sunlight that turbines can cast onto buildings. But she says misinformation can fuel setbacks that are more stringent than needed and sometimes act as outright bans on renewable energy.
In Ohio, setbacks and other rules associated with renewable projects have historically been set at the state level. But in October, a new law, SB 52, went into effect giving counties the ability to make exclusion zones with no utility-scale wind and solar projects.
Kitson, the science teacher, testified in support of the zones, arguing that turbines negatively affect property values. He pointed to his group’s analysis comparing the lower property values in the one local township that has wind turbines to the higher average property values in the greater county.
But Ben Hoen, a researcher at the Lawrence Berkeley National Laboratory, says his more than 15 years of research has shown that wind turbines have little to no impact on nearby property values. Hoen says, We have not found evidence of property value impacts despite studying it over multiple periods of time.
Wind turbines dot the countryside in Okarche, Okla., in 2021. Sue Ogrocki/AP hide caption
Wind turbines dot the countryside in Okarche, Okla., in 2021.
Hoen does say that studies in the Netherlands and United Kingdom have found some effects on property values, but they were far smaller than Kitson’s reference to studies showing a 20%-40% depreciation.
In about half of states, regulations around how and whether to build rural utility-scale solar and wind are determined on the local level, Mills says. These local officials are not necessarily experts in energy, she says. And so when you have people coming and stating things as facts, especially if there’s nobody fact-checking everything, right, it’s difficult. They’re certainly making decisions based on what they’re hearing.
groups spread misleading content
In recent years, some of the misinformation about renewable energy has come from former President Donald Trump, who frequently makes misleading and false anti-wind claims at his rallies and media appearances, including the untrue idea that wind turbine noise causes cancer. Earlier this month, when asked about the unfolding Ukraine crisis on a podcast, Trump immediately responded by listing untrue ideas about wind energy.
Other misleading ideas about renewable energy come from groups with ties to the fossil fuel industry, like the Texas Public Policy Foundation. The foundation recently released a film trailer for an anti-offshore wind group in Massachusetts that features multiple falsehoods, including the untrue statement that the proposed project didn’t do any environmental impact assessments and the incorrect idea that offshore wind projects haven’t worked anywhere in the world. The Texas Public Policy Foundation did not respond to a request for comment.
But is one of the biggest drivers of misleading content about renewable energy, says Josh Fergen, a researcher at the University of Minnesota Duluth. Last fall, Fergen and his colleagues published a paper looking at the posts of Kitson’s group and another large wind opposition group, about 90 kilometers east, fighting the Republic Wind Farm.
Fergen’s paper concluded that posts in the two pages were increasing perceptions of human health and public safety risks related to wind by sharing news of disasters and misinformation over health assessment risks. In June, the Ohio Power Siting Board, whose approval was needed for the site, rejected the Republic Wind Farm proposal citing geological concerns and the local opposition.
NPR reviewed dozens of posts from anti-wind and anti-solar groups. While some posts about climate change denial, lithium mining, and a quote misattributed to Winston Churchill were marked as inaccurate, there were dozens of posts with misleading information about renewable energy that were not tagged.
NPR sent a sampling of the posts from anti-renewable community pages. spokesman Kevin McAlister said in an emailed statement, We take action against content that our fact-checking partners rate false as part of our comprehensive strategy to keep viral, provably false claims from spreading on our apps. The examples shared with us don’t appear to meet that threshold as they have only even been shared a handful of times over a period of several years.
But Fergen says that these same types of misleading and false posts about wind and solar energy pop up in a network of groups around the country, feeding a conflict between rural communities and energy developers.
Leah Stokes, an associate professor of political science at the University of California, Santa Barbara, says as resistance to wind and solar projects spreads on social media, the dangers of misinformation from these anti-renewable groups is growing.
It can really slow down the clean energy transition, and that has just as dire life and death consequences, not just in terms of climate change, but also in terms of air pollution, which overwhelmingly hits communities of color.
Lobstermen and their families attend a 2021 rally to protest Maine Gov. Janet Mills’ support for offshore wind projects in Augusta, Maine. Robert F. Bukaty/AP hide caption
Lobstermen and their families attend a 2021 rally to protest Maine Gov. Janet Mills’ support for offshore wind projects in Augusta, Maine.
It’s about who you trust
Speakes-Backman says the Department of Energy is trying to do more outreach to local communities about inaccurate ideas surrounding utility-scale solar and wind, especially around land use and environmental effects. We want to make sure that we are counteracting the misinformation that may be out there, she says.
But Dahvi Wilson, vice president of public affairs for Apex Clean Energy, says her company is finding that across the country, local engagement is becoming increasingly difficult given community suspicions of renewable energy.
I think for a long time, and maybe still in some places, developers thought, ‘Well, we just need to give better information. We just need to give more information.’ And it’s like, ‘it’s so not about that at all!’ Wilson says. It’s about who you trust and if anybody’s going to believe you if you’re a company.
Hoen of the Lawrence Berkeley National Laboratory says the perception of the community engagement process regarding renewables has real implications — even on human health. He gives the example of shadow flicker, the moving shadows from turbines, which opposition groups often cite when critiquing wind. A few states and several counties have regulations limiting shadow flicker on habited structures, commonly to about 30 hours per year, but most do not, and wind opposition groups argue that the strobing shadows can cause agitation, headaches, or even seizures in some individuals.
Hoen says to date they have not found any evidence of shadow flicker causing seizures in research they’ve reviewed, but they have found its relation to annoyance and stress. So Hoen’s group did a study asking: As the number of shadow flicker hours decrease, is there less annoyance? Are people less bothered by it?
What we found, interestingly, is that the individuals that were annoyed by shadow flicker did not necessarily have a higher level of shadow flicker at their home than those that weren’t annoyed, Hoen says. Another study found stress symptoms were correlated with how people felt about the fairness of the project’s roll-out. And, in fact, what led to that annoyance, it appears, is their perception of the planning process, how they felt like that development got rolled out in their community.
Given the importance of community engagement in the process of locating wind and solar, Mills says renewable proponents need to be careful that they aren’t romanticizing the projects or providing misleading information themselves, for example, by saying that a wind or solar plant will bring lots of jobs to an area.
There are a lot of jobs in renewable energy. Many, many of the jobs in renewable energy are in construction trades. And so once the project is built, there’s not tons of jobs associated with the project, Mills says. I think in all of this, it’s important to not sugarcoat.
Anti-renewable groups have internal disputes over use of misinformation
In the last few months, more states — Washington, Iowa and Kansas — have proposed bills to restrict rural utility-scale wind and solar. In Kansas, these bills were proposed by state Sen. Mike Thompson, who also introduced a bill to shut down existing renewable projects.
Thompson, a former meteorologist, is a longtime critic of renewable energy. One of his anti-wind videos even popped up on Kitson’s anti-wind group.
Kansas Republican state Sen. Mike Thompson (left) during a 2022 meeting at the Statehouse in Topeka. Thompson denies the link between human activity and climate change and has a key role in energy policy as the state Senate’s utilities committee chairman. John Hanna/AP hide caption
Kansas Republican state Sen. Mike Thompson (left) during a 2022 meeting at the Statehouse in Topeka. Thompson denies the link between human activity and climate change and has a key role in energy policy as the state Senate’s utilities committee chairman.
In one video on the anti-solar group’s YouTube channel, Thompson calls climate change one of the biggest scams out there and says carbon dioxide has no correlation with the temperature on this planet whatsoever. That statement is false: The vast majority of scientists agree that the climate crisis stems from greenhouse gas emissions generated by human activity. Thompson did not respond to requests for comment.
YouTube spokesperson Elena Hernandez said in an emailed statement, In general, we don’t recommend or prominently surface content that includes climate change misinformation. Our systems are trained to raise videos from authoritative sources, like news outlets and experts, in search results for certain queries related to climate change and renewable energy.
Barbara Kerr is a professor of psychology at the University of Kansas and she’s a founding member of that anti-solar group in Kansas, which opposes NextEra Energy’s proposed utility-scale solar plant in Douglas and Johnson counties. Kerr says she knows the videos that have been featured by the group she co-founded have misinformation.
Just horrible, Kerr says of the videos. They are just counterfactual and not something we should have on the website.
But despite Kerr’s objections, her group decided in January to keep the videos online. It is important to not judge, and censor utility-scale solar content/opinions contributed by citizens. If we become judge and jury, we are headed down the wrong path, the group said in an emailed statement.
Kerr says that while she disagrees with the misinformation used by some in her group, she says the anti-solar coalition makes for strange bedfellows. Sometimes you have to compromise, she says. I don’t want to alienate these people. They go to the meetings in Douglas County and Johnson County.
But Dan Reuman, professor of ecology and evolutionary biology at the University of Kansas, says he worries about the role misinformation could play in the decision-making over the solar project, which he supports. He says that while he is sympathetic to those in his county who don’t want to live near a large-scale solar plant, he also thinks their concerns need to be weighed against the need to mitigate climate change.
I just find it upsetting, Reuman says. I hope that the government doesn’t make a compromise between a scientifically based position and a misinformation-based position. Because if you’re compromising with misinformation, then there’s sort of no limit to that, right?
A windfarm near Velva, N.D. The 213-foot wind towers are owned by Global Renewable Energy Partners and Acciona Energia and purchased by Xcel Energy, which distributes the wind-generated electric power to its North Dakota customers. Karen Bleier/AFP via Getty Images hide caption
A windfarm near Velva, N.D. The 213-foot wind towers are owned by Global Renewable Energy Partners and Acciona Energia and purchased by Xcel Energy, which distributes the wind-generated electric power to its North Dakota customers.
Karen Bleier/AFP via Getty Images
Editor’s note: ‘s parent company, Meta, pays NPR to license NPR content.
The Cost of Solar Panels: Is It Worth It?
Do the benefits of solar panels outweigh their costs?
Nathaniel Riley brings 28 years of experience in financial services, including merger-arbitrage trading, hedge funds, and alternative investments.
Somer G. Anderson is CPA, doctor of accounting, and an accounting and finance professor who has been working in the accounting and finance industries for more than 20 years. Her expertise covers a wide range of accounting, corporate finance, taxes, lending, and personal finance areas.
Skylar Clarine is a fact-checker and expert in personal finance with a range of experience including veterinary technology and film studies.
What Is Solar Power for the Home?
Homeowners who install solar power systems can receive numerous benefits: lower electric bills, lower carbon footprints, and potentially higher home values. But these benefits typically come with significant installation and maintenance costs and the magnitude of the gains can vary widely from one house to another.
This article will help homeowners make the financial calculations required to determine the viability of solar power in their homes.
- Those seeking to go green may want to consider equipping their home with solar panels.
- Not only is solar power good for the environment, but you can earn money selling back excess power to the grid.
- While costs have come down over the past years, installation and maintenance of solar panels can be quite expensive.
- Solar panels are best suited for homes that receive ample sun exposure throughout the year.
- Before committing to solar power, be sure to understand both the social and economic factors.
Understanding Solar Power
In principle, working out whether it makes financial sense to install solar power for your home is simple. You will need to calculate:
- The cost of a solar power system
- How much energy it will produce
- What you would otherwise pay for the same amount of energy
- How many years it will take for your upfront investment to pay for itself in saved energy costs
- Whether the system will pay for itself in five years
If it does and you have the upfront capital, it’s probably a great idea. If you’ll have to wait longer for savings or take out a loan to afford the system, you’ll need to think the decision through carefully.
In practice, however, things are not this simple. There is a large variation in each of these factors, and that can make the costs and benefits of installing solar power for two homes—even if they are neighbors—radically different.
There are some tools that can help, though. Solar Reviews offer a calculator that will quickly provide you with representative costs and savings for a solar power system in every part of the U.S. Calculators like this are a good place to start if you are new to solar energy and want to understand the basic cost model.
In the rest of this article, we’ll take you through each of the key factors you should consider when calculating the costs and potential savings of solar power for your home.
Before getting solar panels, get quotes from several reputable installers to compare.
The Cost of Solar Power for Homeowners
First, let’s look at the cost of installing a solar power system for your home. The average, upfront cost of a residential solar power system is between 3,500 and 16,000.
Why the huge range of costs? Well, a lot of the variation depends on the size of the system you’d like to install and the type of panels you want to use. Whatever system you use, keep in mind that solar power is capital intensive and the main cost of owning a system comes upfront when buying the equipment. The solar module will almost certainly represent the largest single component of the overall expense.
There are some additional costs, as well. Other equipment necessary for installation includes an inverter (to turn the direct current produced by the panel into the alternating current used by household appliances), metering equipment (if it is necessary to see how much power is produced), and various housing components along with cables and wiring gear. Some homeowners also consider battery storage. Historically, batteries have been prohibitively expensive and unnecessary if the utility pays for excess electricity that is fed into the grid (see below). The installation labor cost must also be factored in.
In addition to installation costs, there are some further costs associated with operating and maintaining a PV solar array. Aside from cleaning the panels regularly, inverters and batteries (if installed) generally need replacement after several years of use.
While the above costs are relatively straightforward—often a solar installation company can quote a price for these for a homeowner—determining subsidies available from the government and/or your local utility can prove more of a challenge. Government incentives change often, but historically, the U.S. government has allowed a tax credit of up to 30% of the system’s cost.
details on incentive programs in the U.S., including programs within each state, can be found on the Database of State Incentives for Renewables Efficiency (DSIRE) website. In other countries, such information is often available on government or solar advocacy websites. Homeowners should also check with their local utility company to see whether it offers financial incentives for solar installation and to determine what its policy is for grid interconnection and for selling excess power into the grid.
The U.S. installed 19.2 gigawatts of solar PV capacity in 2020 to reach 97.7 GWdc of total installed capacity, enough to power 17.7 million American homes.
Calculating Your Energy Production
The second factor you’ll need to consider in your calculations is the amount of energy your system will produce and when it will do that. This can be a very complicated calculation to make, even for experienced solar engineers. However, let’s run through the basics.
One of the most important considerations is the solar irradiation levels available in the home’s geographical location; in other words, how sunny it is where you live. When it comes to using solar panels, being closer to the equator is generally better, but other factors must be considered. The National Renewable Energy Laboratory (NREL) produces maps for the U.S. showing solar irradiation levels and the tools on its website provide detailed solar information for specific locations within the U.S.
Equally important is your home’s orientation: For rooftop arrays, a south-facing roof without trees or other objects obstructing sunlight maximizes the available solar energy. If this is not available, panels can be mounted on external supports and installed away from the house, incurring additional costs for the extra hardware and cables.
And then you must factor in the size of your system. Solar panel size is quoted in terms of the theoretical electrical output potential in watts. However, the typical output realized for installed PV systems—known as the capacity factor—is between 15% and 30% of the theoretical output. A 3 kilowatt-hour (kWh) household system running at a 15% capacity factor would produce 3 kWh x 15% x 24 hr/day x 365 days/year = 3,942 kWh/year or roughly one-third of the typical electricity consumption of a U.S. household.
How Much Will You Save?
Once you know how much a solar power system will cost upfront, and how much energy it will produce, you can (theoretically) predict how much you can save in energy costs per year.
This is another tricky calculation, however, because a lot depends on how you pay for electricity at the moment. Utilities often charge residential consumers a flat rate for electricity, regardless of the time of consumption. This means that instead of offsetting the expensive cost of peak electricity production, homeowners’ solar power systems merely offset the price they are charged for electricity, which is much closer to the average cost of power production.
However, many utility companies in the U.S. have introduced pricing schemes that allow homeowners to be charged at different rates throughout the day in an attempt to mirror the actual cost of electricity production at different times: This means higher rates in the afternoon and lower rates at night. A PV solar array may be very beneficial in areas where this sort of time-varying rate is used since the solar power produced would offset the most costly electricity.
Exactly how beneficial this is for a given homeowner depends on the exact timing and magnitude of the rate changes under such a plan. Similarly, utilities in some locations have pricing schemes that vary over different times of the year due to regular seasonal demand fluctuations. Those with higher rates during the summer make solar power more valuable.
Some utilities have tiered pricing plans in which the marginal price of electricity changes as consumption rises. Under this type of plan, the benefit from a solar system can depend on the electricity use of the home; in certain areas subject to rates that increase dramatically as consumption increases, large homes (with large energy needs) may benefit most from solar arrays that offset high-cost marginal consumption.
For some homes, it might even be possible to make money by selling solar power back to the grid. In the U.S., this is done through net metering plans, in which residential consumers use the power that they put into the grid (when the rate of electricity generation from the solar array is greater than the rate of household electricity consumption) to offset the power consumed at other times; the monthly electric bill reflects net energy consumption. The specific net metering regulations and policies vary across regions. Homeowners can refer to the DSIRE database and should also contact their local utilities to find more specific information.
Calculating Solar Power Costs
At this point, you will be in a position to make a final calculation, and an assessment of whether solar power makes sense for you.
The overall cost and benefit of a solar system can theoretically be evaluated using the discounted cash flow (DCF) method. Outflows at the beginning of the project would consist of installation costs (net of subsidies) and inflows would arrive later in the form of offset electricity costs (both directly and through net metering).
However, rather than using DCF, the viability of solar power is usually evaluated by calculating the levelized cost of electricity (LCOE), then comparing it to the cost of electricity charged by the local utility. The LCOE for household solar will typically be calculated as cost/kilowatt-hour (/kWh or ¢/kWh)—the same format commonly used on electricity bills. To approximate the LCOE, one can use the following equation:
LCOE (/kWh) = Net Present Value (NPV) of the Lifetime Cost of Ownership / Lifetime Energy Output (kWh)
The useful life of a PV solar module is generally assumed to be 25 to 40 years. The cost of ownership includes the maintenance costs, which must be discounted to find the NPV. The LCOE can then be compared to the cost of electricity from a utility; remember, the relevant price is that which occurs during times at or near peak PV solar production.
Is Solar Power Worth It?
Once you’ve worked through all of these calculations, you’ll likely end up with a single number—the number of years it will take for a solar system to pay for itself in savings from your energy bills. If you live in a sunny part of the country and have high utility bills at the moment, you could be looking at a system that will reach this point in five years. Other homeowners may have to wait 10 or 20 years to reach this point.
In other words, most homeowners will eventually see a benefit from a solar power system; it might just take decades for this to be realized. Whether it is worth installing such a system therefore often comes down to a number of much less technical factors than those we’ve listed above: how long you are going to stay in your home, the subsidies available in your area, and simply whether you want to do your bit for the environment.
Pros and Cons of Solar Panels for Your Home
Like most things, solar power has its benefits and drawbacks. At the same time, some economic costs may be defrayed by the social benefits to the environment and lowering your carbon footprint, which may be more important to you than a purely monetary evaluation.
- Green energy that lowers your carbon footprint
- Net metering allows you to sell back excess energy produced
- You may be eligible for certain tax breaks
- Installation and maintenance costs are still high
- Solar only works when the sun is out
- Parts of the system need to be replaced every few years
- Some tax breaks may have expired or will be expiring
Can a House Run on Solar Power Alone?
Practically, it is not often possible. This is because solar only works when the sun is shining—when it is cloudy or nighttime, they do not generate electricity. There are some battery solutions to provide power during these times, but they still tend to be quite expensive. Most homes with solar panels still rely on the grid from time to time.
Do You Really Save Money With Solar Panels?
Depending on where you live, it is possible that the system can pay itself back and more over time. This is because you won’t be spending as much money buying electricity from your utility. If net metering is in place, you could reduce your bills even further.
How Much Does a Solar Panel Cost?
have been coming down steadily over the years. The total cost will depend on how many kilowatts of power your array will generate. According to consumer reports, after solar tax credits are accounted for, the cost for a solar panel system on an average-sized house in the U.S. in 2021 ranges from 11,000 to 15,000.
How Long Will It Take To Recoup the Initial Cost?
Depending on where you live and the size of your system it can take, on average, anywhere from 10 to 20 years to break even on a solar installation.
The Bottom Line
Determining whether to install a PV solar system may seem like a daunting task, but it is important to remember that such a system is a long-term investment. In many locations, solar power is a good choice from a financial perspective.
Even if the cost of solar power is found to be marginally more expensive than electricity purchased from a utility, homeowners may wish to install solar power to avoid future potential fluctuations in energy costs, or may simply wish to look beyond their personal financial motivations and use solar for green living.
What is renewable energy?
Renewable energy is energy derived from natural sources that are replenished at a higher rate than they are consumed. Sunlight and wind, for example, are such sources that are constantly being replenished. Renewable energy sources are plentiful and all around us.
Fossil fuels. coal, oil and gas. on the other hand, are non-renewable resources that take hundreds of millions of years to form. Fossil fuels, when burned to produce energy, cause harmful greenhouse gas emissions, such as carbon dioxide.
Generating renewable energy creates far lower emissions than burning fossil fuels. Transitioning from fossil fuels, which currently account for the lion’s share of emissions, to renewable energy is key to addressing the climate crisis.
Renewables are now cheaper in most countries, and generate three times more jobs than fossil fuels.
Here are a few common sources of renewable energy:
Solar energy is the most abundant of all energy resources and can even be harnessed in cloudy weather. The rate at which solar energy is intercepted by the Earth is about 10,000 times greater than the rate at which humankind consumes energy.
Solar technologies can deliver heat, cooling, natural lighting, electricity, and fuels for a host of applications. Solar technologies convert sunlight into electrical energy either through photovoltaic panels or through mirrors that concentrate solar radiation.
Although not all countries are equally endowed with solar energy, a significant contribution to the energy mix from direct solar energy is possible for every country.
The cost of manufacturing solar panels has plummeted dramatically in the last decade, making them not only affordable but often the cheapest form of electricity. Solar panels have a lifespan of roughly 30 years, and come in variety of shades depending on the type of material used in manufacturing.
Wind energy harnesses the kinetic energy of moving air by using large wind turbines located on land (onshore) or in sea- or freshwater (offshore). Wind energy has been used for millennia, but onshore and offshore wind energy technologies have evolved over the last few years to maximize the electricity produced. with taller turbines and larger rotor diameters.
Though average wind speeds vary considerably by location, the world’s technical potential for wind energy exceeds global electricity production, and ample potential exists in most regions of the world to enable significant wind energy deployment.
Many parts of the world have strong wind speeds, but the best locations for generating wind power are sometimes remote ones. Offshore wind power offers tremendous potential.
Geothermal energy utilizes the accessible thermal energy from the Earth’s interior. Heat is extracted from geothermal reservoirs using wells or other means.
Reservoirs that are naturally sufficiently hot and permeable are called hydrothermal reservoirs, whereas reservoirs that are sufficiently hot but that are improved with hydraulic stimulation are called enhanced geothermal systems.
Once at the surface, fluids of various temperatures can be used to generate electricity. The technology for electricity generation from hydrothermal reservoirs is mature and reliable, and has been operating for more than 100 years.
Hydropower harnesses the energy of water moving from higher to lower elevations. It can be generated from reservoirs and rivers. Reservoir hydropower plants rely on stored water in a reservoir, while run-of-river hydropower plants harness energy from the available flow of the river.
Hydropower reservoirs often have multiple uses. providing drinking water, water for irrigation, flood and drought control, navigation services, as well as energy supply.
Hydropower currently is the largest source of renewable energy in the electricity sector. It relies on generally stable rainfall patterns, and can be negatively impacted by climate-induced droughts or changes to ecosystems which impact rainfall patterns.
The infrastructure needed to create hydropower can also impact on ecosystems in adverse ways. For this reason, many consider small-scale hydro a more environmentally-friendly option, and especially suitable for communities in remote locations.
Ocean energy derives from technologies that use the kinetic and thermal energy of seawater. waves or currents for instance. to produce electricity or heat.
Ocean energy systems are still at an early stage of development, with a number of prototype wave and tidal current devices being explored. The theoretical potential for ocean energy easily exceeds present human energy requirements.
Bioenergy is produced from a variety of organic materials, called biomass, such as wood, charcoal, dung and other manures for heat and power production, and agricultural crops for liquid biofuels. Most biomass is used in rural areas for cooking, lighting and space heating, generally by poorer populations in developing countries.
Modern biomass systems include dedicated crops or trees, residues from agriculture and forestry, and various organic waste streams.
Energy created by burning biomass creates greenhouse gas emissions, but at lower levels than burning fossil fuels like coal, oil or gas. However, bioenergy should only be used in limited applications, given potential negative environmental impacts related to large-scale increases in forest and bioenergy plantations, and resulting deforestation and land-use change.
For more information on renewable sources of energy, please check out the following websites:
International Renewable Energy Agency | Renewables
International Energy Agency | Renewables
Intergovernmental Panel on Climate Change | Renewable Sources of Energy
Sustainable Energy for All | Renewable Energy
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