Many think that installing solar panels is expensive. They are certainly not wrong, but why exactly is solar energy so expensive? Simply put, there are many hands involved from manufacturing to trading solar equipment, to customer acquisition, to installation and maintenance. Surprisingly, solar panels themselves only cost around 25% of the total cost! The other 75% consists of “soft costs” or all the steps to effectively install solar panels on your home or business.
Here at CRJ Contractors, we are solar panel specialists in Colorado Springs who work hard to ensure that our clients are educated about the many facets of going solar, which companies can offer them the best deal, and how much money they can expect to save. One common question we answer is, “Why are solar panels so expensive?”
The Hard Costs of Solar Panel System
The “hard costs” of solar include hardware necessary to conduct energy from the sun, convert it from DC to AC, and optimize results. Hardware is only one part of the equation when factoring how much your solar panel solution will cost.
Hardware to decide between include:
Types of panels – Solar panels are made with silicon, a highly conductive material that takes the energy from the sun and transforms it into DC. The main difference between monocrystalline and polycrystalline solar panels is efficiency and cost. For highly proficient solar panels, monocrystalline is the way to go.
Type of inverters – Inverters are the mechanism that converts DC into AC necessary for powering many household appliances. Centralized inverters are necessary to power your home, while string converters and power optimizers are extra hardware you can install for optimized efficiency.
Type of mounting system – The mounting system is also necessary to securely plant your solar panels. For those with complex roofs with awkward angles or multiple levels, a specialized mounting system will help, especially if you live in a windy area. Additionally, for ground-level installations, a tracking system can help to optimize energy flow.
It’ll be important to weigh the relative pros and cons on whether you want the best performing PV system on the market or are willing to settle for second best hardware.
The Soft Cost of Solar Panel System
Surprisingly, the soft costs of solar panel solutions are 64% of the total cost to invest in solar. Soft costs are the non-hardware aspects of going solar including permitting fees, transactional costs, installation and overhead costs. These costs are stacked on the final price-tag.
Permit Fees – Depending on your particular state, these permit fees ensure that the plotting of solar panels abide by environmental law for protection and integrity of the property
Sales Tax – 25 states offer sales tax and property tax exemptions. Luckily, Colorado is one of them!
Transaction Costs — Usually adds about $.05 per watt to total price, unless you pay with cash.
Installer / Developer Costs — Each property is unique, so in order to properly design optimized solar energy flow, a developer will design the circuit architecture and charge for his / her services.
Customer Acquisition — Finding customers is half the battle in some cases; customer acquisition accounts for marketing, sales teams, and outreach.
Installation Labor — Installing solar panels requires more than an average electrician’s knowledge of circuitry, thus specialized knowledge is required.
Supply Chain Cost — From manufacturing, to shipping, and tariffs on overseas solar materials, these all add a percentage of the cost to invest in solar.
(Courtesy of Department of U.S. Energy)
As you can see, there are many moving parts to installing solar panels. The biggest reason why going solar is there are many hands involved in the process to get your solar panel installed effectively legally, and most important of all, safely.
How Much Does It Cost to Maintain Solar Panels?
Once solar panels have been installed, it will be the sole responsibility of the owner to maintain their solar panels. Naturally, as time moves forward, solar panels will lose their luster through years of wear and tear. Another cost to be aware of therefore is maintenance of your solar panel system. However typically these costs are minimal. An annual inspection costs about $150, which will make clear if your solar panels are experiencing anything abnormal. Cleaning costs are generally $15-20 per panel, and replacements vary on the damage done / years of use. Solar panels have an average life span of 25 -30 years, so replacements are way down the line for green solar investors.
Check out our post on how to actively practice solar panel care for more information on lowering maintenance costs.
How to Lower the Cost of Solar Panel Installation?
Fortunately there are many things you can do to mitigate the costs of investing in solar other than running for congress and trying to pass better legislation.
- For example, Federal Tax Credits will reimburse solar investors 26% of the total cost to install solar panels on their residential or commercial building.
- Find an installation company that offers the right financing for your budget. Here at CRJ contractors, we will help you find great solar panel companies and pair you with great financing options here in Colorado Springs. Feel free to contact us for an estimate!
- Become educated about solar energy by researching it thoroughly. Installers spend tons of time trying to educate customers about solar energy, which wastes time and money if you are paying for consultations. A great starting point is to research the Department of Energy’s website to understand fully what it takes to invest in solar.
- Finally purchasing used equipment can save you money on hardware costs, but be cautious as hidden issues may be present. Taking used equipment to a solar panel repair shop and paying for an inspection might be another wise option.
Is Investing in Solar Worth It? | CRJ Contractors
The costs have become better than ever before. In fact, solar panels prices have fallen by 70% since 2010 according to SEIA, making today one of the best times in history to invest in solar. Additionally, the data shows that solar panel installations can save thousands of dollars over a 25 year span. Of course solar panels are still expensive all things considered, but when you look at long term savings, growing environmental concerns, and the global economy – we firmly believe that going solar is a worthwhile investment for many people, especially our community here in Colorado Springs. If you have any questions about the costs of going solar, contact us today! Our team of solar specialists would be glad to assist you!