Solar Power vs. Electricity Cost

Today, people are dependent on electricity to power everything we need in residential and commercial settings. This is especially obvious when the electricity goes out and large numbers of people are inconvenienced in ways they weren't expecting. However, the cost of electricity is prone to fluctuations, especially during severe weather or uncertain times. To combat those fluctuating prices, solar power can be an affordable power alternative. Solar power features a significant cost of installation, but over time, it could potentially lower your electricity bills and could even keep you from worrying about losing power during a storm!

Factors That Affect the Cost of Electricity

When you purchase electricity from your local power grid, the prices are a reflection of the building, operation, and maintenance costs for the power generation facilities as well as the distribution lines. The electricity must be created and transmitted through these lines in order for people to be able to power their homes and businesses, which costs money.

How much electricity costs depends on a few factors:

  • The cost of fuel
  • Weather conditions
  • Government regulations
  • Transmission and distribution systems

The Cost of Solar Power

Setting up a solar energy system can protect you from fluctuations in electricity costs. In the past few decades, solar cell prices have dropped considerably, making solar energy more affordable than ever. Installation can be costly, but it has slowly decreased in price over the years as the equipment has become more affordable. And after a successful installation, there are minimal costs associated with maintenance. In fact, the federal and state governments even have tax credits associated with adding a solar power system to your home, so when you file your taxes, you can get some of the money you spent on installation back into your wallet! With those tax credits and the lower energy and electricity costs, it's likely that you'll recoup your investment in about a decade.

How Much Money Can Be Saved by Switching to Solar Power?

To figure out how much money you'll save, you should start by adding up the cost of installing a solar energy system, minus the amount you'll get back in tax credits. The average cost of a residential solar setup is around $12,000. Then, figure out how much you pay for electricity over the course of a year. (If you have no idea where to start, find the amount your utility charges per kilowatt-hour and multiply that by around 10,000 to get a ballpark figure.)

Once you have both of these numbers, divide the cost of a solar energy system by the amount you would pay for electricity every year. That's the number of years it will take to recoup your investment. Beyond that, you'll start racking up the savings: Every year that goes by will save you that annual electricity cost you calculated. Considering that most solar energy systems last at least 25 years, those savings can really add up!

Switching to solar energy can help combat rising electricity costs and get rid of your dependence on local utilities. While you'll pay more today to get a solar setup installed, in the long run, you'll save a bundle, and you'll save the environment, too.