Did you know that solar power was first generated back in 1888? Since then, there have continued to be developments with this energy. This allows it to be more affordable and convenient for people.
Keep in mind that there are costs involved with maintaining photovoltaic systems. Keep reading to learn more about these costs and what factors can bring them down.
In this article
Estimating the Initial Cost of Installation
The installation cost may depend on the availability of solar energy in the location of the installation as well as any additional support from local authorities or companies. When estimating the initial cost, it is important to look at potential future maintenance requirements as well.
Here are the factors that need to be considered when evaluating the costs of an installation.
- upgrades needed to the electrical system of the residence
- the size of components required for the installation
- local labor costs
- permitting expenses
Estimates of photovoltaic system installation costs usually range from $20,000 to $35,000. It generally covers all materials, labor, and permitting fees.
Largest Cost Drivers of Photovoltaic Systems Installation
Installing a photovoltaic (PV) system can come with a range of costs and include a variety of components. Operating and maintenance costs vary as they can be dependent on external factors. Here are the most common cost drivers of installing a PV system.
System Size
The larger the system size, the more photovoltaic cells and panels will be needed. As the system size increases, so does the cost of the component installation and labor.
Larger systems will require larger inverters and mounting systems. This also adds to the overall cost of the system.
Mounting Style
The cost of installing photovoltaic systems is largely determined by their mounting style. The primary cost drivers include the rooftop mounting option, ground mounting option, and tracking systems.
The rooftop mounting option is the most common and cheapest. However, the cost of installation can vary depending on the complexity of the setup. Ground mounting is more expensive as it requires excavation. This results in more material and labor costs.
Tracking systems can also be quite expensive because they need to be designed and constructed with increased accuracy. Despite being the most expensive, tracking systems can significantly increase the efficiency and life of the photovoltaic system.
Seismic Considerations
Seismic considerations are one of the largest cost drivers of the installation of photovoltaic systems. This is true as seismic engineering and design play a critical role in the life of these systems.
The added cost of compliance with relevant codes is significant. They must be designed and constructed by local, state, and federal building codes and regulations.
Electrical Infrastructure Considerations
Additional hardware, such as wiring, electrical panels, and fuses, may be required. Electrical upgrades are often necessary to ensure circuits and components can handle the additional load of the PV system.
The cost associated with electrical infrastructure and maintenance should be taken into consideration when deciding whether to install a PV system. Doing some research and talking to local installers will help to ensure the right investment is made.
Electrical infrastructure costs are impacted by the type of wiring, number of circuits, and conductors. It also includes line routing and the structure of the electrical grid. Other considerations include the need to install safety features such as ground fault circuit interruptions.
Quality of the Materials That Are Being Used
Quality materials will always increase the cost of the installation. But this can also ensure the longevity of the system. Lower-quality materials can cause the system to fail or be damaged easily. This leads to costly repairs or replacements.
Using quality materials can lead to higher energy efficiency and performance. This means that power production and savings over time will ultimately be greater.
Climate and Geography of the Site
Factors such as the weather and soil of the location are extremely important in determining the correct PV system. Local regulations and incentives can affect the cost of the system.
For example, in a hotter, sunnier region like the southwestern United States, more expensive inverters and cooling systems may be necessary due to the higher temperatures. On the other hand, in the northern United States, additional site preparation may be required.
Exploring the Maintenance Expenses
PV systems have low maintenance requirements compared to other sources of energy, and maintenance expenses are often minimal over the system’s lifetime. It’s still important to consider any potential maintenance costs and plan accordingly
Photovoltaic systems require annual maintenance to ensure that all components are in working order. It ensures that the system is producing at maximum efficiency. This includes checking for corrosion or damage to the wiring and cells. It also includes cleaning the array surface and ensuring that the inverter is working properly.
Other costs to factor in are the cost of energy storage maintenance and repairs, if applicable. Considering all these expenses ahead of time can help you manage your budget and assess the true cost of ownership over the lifecycle of your PV system.
PV System Tax Credits
Installing and maintaining photovoltaic systems can be expensive, and there are quite a few factors to consider. However, those who choose to do so may be eligible for PV system tax credits.
This can have a huge impact on the upfront costs of a photovoltaic installation.
Federal Investment Tax Credit
Through the Federal Investment Tax Credit, you can receive credit back equal to 26% of the cost of a PV system installed in 2020 moving forward. This can help to reduce a large portion of the cost and encourage more people to go solar. As a bonus, you can carry forward the remaining credit to future years.
This is incredibly advantageous as it can make going solar even more cost-effective. To qualify, the PV system must be placed in service in the U.S. by December 31, 2022.
State and Local Incentives
These incentives can take the form of tax credits, deductions, refunds, or other financial assistance. PV system tax credits have been available for several years and are designed to help offset the higher costs associated with installing a solar energy system.
These incentives help to make solar energy even more cost-effective for businesses and homeowners. In many states, these incentives can reduce energy consumption and the cost of solar energy installations by up to 30 to 50 percent.
SREC
SREC stands for Solar Renewable Energy Credits. These credits allow system owners to reduce their federal tax liability through the use of solar energy. Installations of up to 30kW are eligible for a 10-year, 30 percent federal tax credit. This credit might be even higher in some states.
In addition to this, certain states have SREC programs that allow owners to earn money each time their system generates 1,000 kWh, giving them a return on investment that can reach up to 15 percent.
Financial Options in Installing a Photovoltaic System
Installing a photovoltaic system can be a great financial decision. Homeowners who wish to finance the purchase of PV systems can take advantage of different options. Here are the most common financial assistance available.
Solar Loan
A solar loan is a line of credit from which you borrow money to finance the cost of the system. The costs are broken down into individual monthly payments, which can be spread out over as long as 25 years.
Most loan programs have low or no interest. It becomes a very affordable option in addition to all of the long-term savings from using solar energy.
Solar Lease
In a solar lease, solar panels are owned and maintained by a third party instead of the buyer. The consumer pays a fixed rate for the energy created. Solar leases are advantageous to consumers because they require no upfront payments.
It also does not have maintenance or repair costs. It gives the consumer no obligation to move the panels or pay back the lease agreement.
Solar Power Purchase Agreement
The SPPA allows the homeowner to purchase solar energy at a fixed price for a specified period. The solar energy provider handles the installation, maintenance, and operation of the photovoltaic system.
This type of agreement can be useful for homeowners who want to benefit from solar energy without the upfront cost of purchasing a photovoltaic system.
Solarize Program
Solarize programs usually involve the local or state government. They also have 2-3 approved installers who have agreed to the pricing rules. Through the partnering of the government and approved installers, the customer can receive the best financial options along with quality products.
Customers will need to show proof of their creditworthiness and possibly make a down payment to go along with a loan package. It’s important to do research and compare the financing options for multiple solar panel installations before signing a contract.
Maintain Your Photovoltaic Solar Panel System Today
Installing and maintaining photovoltaic systems can be a rewarding and cost-effective investment. Make sure to weigh your options and understand the costs associated with maintenance.
Consider speaking to a professional to get more information before making a decision. Don’t wait – start investigating your options today!
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