There are two primary ways to consider the economics of solar: these include the total cost over the life of the system, and payback (i.e. the number of years before the system is paid back). In the first instance, the upfront installed cost is calculated by subtracting out any incentives and tax credits. For payback, the number of years needed to pay off the system cost from energy savings is determined.
In the Portland area, you can expect to generate 1,000 kWh of electricity for every 1 kW of installed system. An average 4 kW system would generate on average approximately 4,000 kW a year or 11 kW a day. For an average system, the payback can be around 6.5 years. Even after 30 years, PV panels will provide 80% of their output.
Beyond the economics, there are many reasons to install solar energy.
- Solar homes sell twice as fast as their conventional counterparts, which provides a hedge in depressed housing markets.
- Solar homeowners are more satisfied and recommend their builder to others twice as often.
- Homeowners in communities that include solar are more satisfied with their home purchases.
- Installing solar as a standard feature simplifies the buyer’s decision making process because it takes the guesswork out of their purchase.
- Builders indicate that make solar as standard equipment is more profitable than offering it as an option. Builders find that it is more profitable to offer solar as a standard features rather than other options.
- Homes with solar energy reduce their energy bills between 14-54%.
- Solar systems retain their value on average 97% and adds approximately $12,000 to a home’s value.
Environmental Benefits and Considerations
There are a number of ways to consider energy and the environment. These include all of the effects of resource development on society from the production, distribution, consumption and disposal of energy. One large global consideration is the effect on climate change, which is whether the resource is carbon emitting, such as coal or oil. “Carbon-free” resources include solar, wind, hydro and nuclear. Another consideration is whether the resource is a renewable or non-renewable resource (such as coal and gas). Another element is the magnitude of the resource and the potential for harm to the environment and human health. Because solar energy is carbon-free and renewable, it has more positive environmental benefits overall when compared with carbon producing fossil fuels.
More often decisions made by businesses are considered within the context of climate change. All energy sources have some effect on the environment. Fossil fuels are more harmful than renewable energy including air/water pollution, damage to public health, wildlife and fish habitat, land and water use and global warming emissions.
For decades now, the industry (utilities, regulatory commission, environmental groups) have tried to calculate the cost of the effect of resource development on the environment. Quantifying this amount is known as environment adders. By including these costs, it more accurately captures the true cost and addresses accountability i.e. not pushing these costs off to others downstream (taxpayers, government, other businesses).
The sun provides a tremendous resource for generating clean and sustainable electricity. The environmental impacts associated with solar power does the use of hazardous materials in manufacturing, and vary greatly depending on the scale of the system and the technology used â€” photovoltaic (PV) solar cells or concentrating solar thermal plants (CSP). If not handled and disposed of properly, these materials could pose serious environmental or public health threats.
While there are no global warming emissions associated with generating electricity from solar energy, there are emissions associated with other stages of the solar life-cycle, including manufacturing, materials transportation, installation, maintenance, and decommissioning and dismantlement.