Experts believe the cost of electricity will only go up in the future, and those who are tied to the grid will likely have to pay more to keep the home powered up, but those that invest in solar energy will see savings rather than having to worry about these climbing prices. The major problem most people have with a photovoltaic system is its perceived cost. However, there are many ways to cut the initial investment and to finance the rest of it over many years. With these incentives and tax breaks, there is no question that a PV setup will save a homeowner thousands of dollars over the lifetime of the panels.
Most PV systems can function for a couple decades or more, and many newer models have 25 year warranties that cover the panels. The average family pays around $170 in electricity every month, which comes out to about $2,000 annually. Over 25 years, this means that the average family will spend more than $50,000 in power. Already, the solar energy produces savings that are rather significant, because most PV systems cost less than this after accounting for government incentives and tax reductions.
However, this assumes the cost of electricity will remain constant for the next 25 years, which will most likely not be the case. Since 2002, the power costs in the U.S. have climbed by an average of 3.75 percent every year. Assuming that this trend holds, the real expenditures to a family attached to the grid may be closer to $100,000. For most people, this is a life changing amount of money. Solar energy produces savings that can easily recoup that much over the lifetime of the panels.
A PV system may need to be financed by the homeowner, much like financing a car or home, and paid out over several years. Most installers offer reasonable rates that homeowners can realistically afford, and once the panels are paid off, the family owns them. This payback period is fairly short, and rarely takes longer than 10 years to complete. Once it is, the electricity the PV setup generates is free to use, and if the system produces an excess, the homeowner can sell it back to the grid, and pocket the extra cash. This can drive solar energy savings up even further.
For the average consumer, 15 years of free electricity is a lot, and this assumes that the panels will only last as long as their warranty. With current manufacturing techniques and improved materials, some systems can last much longer than their warranty period and continue to reap benefits for the homeowner for many years more. Multiple state governments and the federal government are offering more tax rebates and incentives than ever before, and with these initiatives, a homeowner can start getting solar energy savings for a fraction of what it cost just a decade ago. Some states have created financial institutions whose sole purpose is to help families pay for their PV setups. These institutions offer multiple plans that can fit into nearly any budget.
Most panels require only minimal modifications to the property to be mounted correctly, and with a storage battery attached to the PV setup, the home can run on stored power at night or on a cloudy day without any problems.