Solar Energy vs Electricity
Solar Energy vs Electricity
People are almost completely dependent on electricity in this time and day and. Most electrical appliances run on electricity, both in commercial and residential settings.
Solar energy is a favorable resource for energy, and has gained in popularity because of its ability to reduce costs and be environmentally friendly.
There are numerous investment options, it can sometimes be difficult to know whether something can actually allow you to save lots of dollars. Cost is one of the major factors when deciding whether to use solar energy as well as regular power.
This article explains how solar power stacks against electricity, and what are the main reasons for the increasing acceptance of solar power.
Factors that affect the price of regular electricity
The expense of building, financing operating, maintaining and upgrading power stations, as well as the complicated system of distribution lines for power, is evident in electricity prices.
The equipment used to produce electricity and transmit it will require maintenance and fuel costs. Many for-profit utilities also include the possibility of a financial reward to shareholders and owners in the price of electricity.
There are a variety of factors that impact the price of electricity. Some are major and some small. These are the main factors that impact the price of electricity:
- Fuel costs power production and distribution are essential. These procedures call for fuel. The price of fuel can fluctuate, particularly during times of large demand. In addition, the demand for fuel like natural gas, could result from high electricity demand which can increase the cost of producing electricity as well as the cost of fuel.
- Weather conditions – Rain and snow are great sources of water to generate hydropower. Wind turbines can generate cost-effective electricity when the wind speed is in a favorable direction. But extreme temperature may raise the demand for electricity to heat or cooling. This drives up electricity prices.
- Transmissions and distribution systems - The system for transmitting and distributing electricity has maintenance costs. They may involve the repair or replacement of systems damaged as a result of extreme weather conditions, or even accidents.
- Regulations Certain states have their own utility or public service commissions to regulate prices. Others have a mixture of prices that producers do not pay, and the regulated prices that are used to facilitate distribution and transmission.
The type of consumer: Industrial customers are able to get more electricity per hour, so they typically cost less for kWh (kilowatt-hour). This is because delivery and generation costs are less and are able to be completed quicker.
The Cost of Electricity in America
Average residential utility costs are 12-cents/kWh. The average monthly electric bill was $114, excluding taxes and charges. On a monthly basis an average household consumes about 911 kWh.
Although electricity utility bills vary a lot through the years, they’ve maintained their stability all through. The cost of electricity for residential customers has grown by 4% over the last 10 years. In certain regions, such as the Northwest, the rate has reached 40 percent.
The US Energy Information Administration reported that the April 2018 average electricity cost per consumer group was:
- Commercial - 10.44 Cents for each Kilowatt
- Residential - 12.89 Cents per Kilowatt
- Transportation -9.53 Cents for each kWh
- Industries - 6.58 cents for kWh
- The entire sector from 10.23 Cents Per Kilowatt
The average household’s cost of living was up 5.5 percent compared to the 2017. This cost has grown by 3.0 percent per year over the past 10 year. Commercial average costs increased by 2.5 percent, while transport averages were up by 2.3 percent. Industrial average electricity costs increased by 0.2 percent. All sectors saw an average increase in the cost of utilities of 0.8 percent between 2017 and 2018.
The typical American household of a residential home used 897 kWh per month in 2016, and the average monthly bill for electricity was $ 1112.59 after taxes and fees. The electricity costs for commercial and residential customers tend to be more expensive than that of industrial customers.
It costs more electricity to distribute, and also requires less voltage. Industrial consumers consume more electricity and can use their electric power at higher voltages without having to lower it.
These elements make it possible for industrial customers to pay a higher price than the wholesale price of electricity. The price of regular electricity appears to be lower than solar energy.
Every minute the price of providing electricity is subject to change. But, consumers typically pay prices that depend on the price of electricity. The price variations are mostly due to fluctuations in electricity demand, fuel costs, and the availability of power sources. The prices are typically highest during summer, when there is more demand than supply.
Solar Power The Cost
Solar power systems can be extremely effective in protecting the consumer from fluctuation and spikes in electricity costs. The cost for a solar panel fell by over 75 percent between 2006 and 2014. It was about $3.25/kWh however, it was $.72/kWh. The photovoltaic (PV) solar cells have fallen by 100 percent in the last 38 years and by 25 percent in the last 15 years.
A shortage of polysilicon is the most important reason for the slight increase in prices between 2005 and the year 2008. The cost of solar cells was $.30 per Watt in 2015 while an solar module cost $.72 per Watt in 2015.
Costs for solar electricity are very low after successful installation. The relevant costs include the purchase price, the cost of the land and the cost of installation. The elements that are cost-effective in a residential solar system are solar modules, design of the system and the balance of the system (BOS).
It includes inverters, connection devices, and a bi-directional billing device. For the Southwest, solar residential costs are in competition with electricity rates for residential homes with incentives.
As per the National Renewable Energy Laboratory, the typical American residential household installs a five kWh system. It costs on average $2.80 for each DC watt or $14,000 (2.080 x 5 000) prior to taxes and costs.
Commercial corporations use systems with a record 100 megawatts, or greater, however. The cost on a permanent solar panel was $1.03 per Watt in 2017.
The price of solar modules has seen a drastic decrease. The average price for modules worldwide decreased by 78 percent between 2007 and. It dropped between $3.25 for a Watt, to $0.72 for each Watt. The drastic drop in cost of polysilicon, a key component in all costs of crystalline silicon modules, is the reason that prices have fallen so much.
The polysilicon suppliers made lots of money and increased their capacity to the point that there was an enormous oversupply of polysilicon by 2010. The price of polysilicon dropped from $400/kg to around $25/kg between 2008 to 2011, which is a drop of 94%. The dramatic drop was caused by:
- Improved efficiency of solar cells can be used to produce sunshine energy.
- Scale economies
- The technological advancements in manufacturing are significant.
- Oversupply of modules is caused by fierce competition
Manufacturing efficiencies unmatched in other industries was achievable because of the 23% annual solar growth rate over a few years. There are a lot of competitors seeking large contracts which has caused prices to drop quickly.
Through tax breaks that apply across all levels, solar panels are becoming less expensive for homeowners. They were allowed to receive 30% off the price for installing solar panels on their homes through tax credits in 2016.
This incentive allows you to pay for all the costs of installation and installation equipment within 10 years. Taxes on tariffs on imported solar cell imports will drop by five percent every year. This means the price remains at 15 percent in 2021. This could lead to solar cells becoming even more affordable in the future.
The cost of going solar is generally much lower. Solar panels are a smart option for homeowners who are planning to sell their home in the near future. Solar panels require little maintenance because there aren’t moving parts that could fail. The latest solar panels have slimmer profiles and sleek trims, which blend well with traditional roofing.
Calculating savings per month using solar power
A solar panel placed on a roof facing south without shading will produce 1,840 kWh per year, per nameplate capacity. The initial year of production for a 5kW solar system would be (1.840 x 5.5) 9,200kWh. A degradation rate of.5 percent per year multiplied over 25 years would yield a net of 8,050kWh each year.
This amounts to (0.875 x 9200) The average residential electricity price within CA was $0.125/kWh in 2017. This would translate into saving of (8050x $0.125) $1.006.25, without taking into consideration the future rate of inflation. So, monthly savings would amount to $83.6 per month divided into ($1006.25 over 12 months).
Solar power is an affordable option for those struggling with the rising cost of electricity. You can get rid of the need to rely on your local utility provider. Solar panels still generate energy in cloudy conditions So don’t worry when they don’t work on sunny days.
Solar energy can be more effective than conventional electricity and is a great option in areas with colder temperatures to reduce costs. The size and quality of your solar panel will determine the amount of power you need. Solar power systems can convert up to 22 percent of the solar energy they generate into electricity.
This is an excellent news when you think about the cost of electricity every month. It is possible to qualify for a rebate in the event that you have surplus solar power.
The solar energy produced by the solar power system is free when it is installed and purchased. This could take anywhere between 5 and 10 years depending on where the home is located. You can save money from the moment your solar energy system starts producing power if you are financially able in financing it.
Solar is much less expensive than electricity, as you can observe from the previous points. Companies are creating systems to provide electricity at a lower cost than regular electricity. Solar can be easily mounted on the roof and taps the energy available. The price of electricity in the country is rising, despite the fact that solar energy is more affordable.
Get in touch with a local solar power company
Nevada Solar Power Installers can provide an estimate that is customized for those who are interested in the cost of a solar installation. We can help you finance the solar power system you want to install. For more information about the solar power systems available, please call our solar panel company at [number].