Many home and business owners are now considering alternative energy sources, especially as the nationwide energy cost rises. More people cite the need to reduce the negative environmental impact as an additional factor to support their search for alternative energy sources. Over the years, one alternative energy source – solar power – has proven to be the potential solution to the rising cost of traditional energy supply.

solar panels on patio roof

Despite the increasing demand for alternative energy sources and the adoption of solar power systems, a Solar panel installer will easily admit that people find its mathematics confusing. While solar power installations can be expensive initially, they offer real long-term advantages and cost savings. Taking the long-term cost savings into consideration, the question of whether to pay off solar panels or not arises. To answer this question, one must carefully analyse the pros and cons of such a decision. Read on to find out whether it is a financially wise choice to pay off your solar panel’s installation bills or not.

Understanding Solar Power

Solar power focuses on harnessing the sun’s power and turning it into useful electrical energy to power your home, business, and appliances. Solar power systems can effectively leverage a naturally occurring and abundant resource to your advantage. Many research studies into the adoption of solar power solutions have agreed that this alternative energy source offers users a real chance of cutting down their energy costs in the short and long run. In addition to saving money and cutting energy costs, solar power users reduce the negative environmental effect of fossil fuel burning, thus reducing the contribution to greenhouse gases and climate change.

Although solar power systems offer great advantages, should this be enough to push users into paying off their bills all at once? A better way to answer this question is to consider the different aspects of solar power installation and its operation. The cost implication is considered carefully under the following topics;

  • The cost of a solar power system
  • The amount of energy generated by the solar power system
  • The alternative cost for the same amount of energy produced by the solar power system
  • The breaking point between the solar power installation’s cost and utility

The Cost of a Solar Power System

Cost is an important factor in any project planning. Knowing the cost of a project helps you determine the appropriate financing solution or model to adopt. For a solar power system installation, the cost incurred varies based on the type of building and the energy requirement. People with higher energy requirements may have to pay more to install more solar panels. They may also pay more for the batteries needed to store energy for later use.

On average, a solar power system may cost between $3,500 and $20,000 upfront. It is important to note that the huge gap between the lower and upper-cost threshold is due to individual preferences and energy needs. As a capital-intensive project, customers may also need to consider the cost of additional equipment for the installation process. Additional costs may include purchasing an inverter, wiring the property, metering equipment, etc. These costs may significantly affect the overall project cost. Based on the quoted amount for the project, you can easily decide whether it’s wise to pay everything off or spread the payment over an agreed period.

solar panels on home

The Amount of Energy Generated by the Solar Power System

The amount of energy to be generated by the solar power system can also influence your decision to pay off the entire cost or not. Please note that the amount of energy generated is affected by the number of solar panels installed and the amount of irradiation the solar panels get in your location. Having more solar panels help. However, they cost a lot of money. You can even things out if you’re getting a high level of solar irradiation in your location. Additionally, your home’s orientation and the size of your roof also matter. Certain home orientations may affect the sun penetration to the solar panel. In the end, if you’re generating enough energy to get you off the grid, you may find it financially wise to pay off your solar power bills, especially as it’ll count as a future investment in your energy cost. However, if your solar power system barely produces enough energy, it may be wise to choose a long-term repayment plan.

The Alternative Cost for the Same Amount of Energy Produced by the Solar Power System

Choosing your solar power system should be a calculated risk. Consider how much money you’d be saving with the amount of energy generated by the system. If you’re saving a lot of money compared to paying for traditional energy sources, it may be wise to pay off your solar power installation bills. However, if you’ve yet to break even or cannot see the cost-saving, choosing a financial plan that allows you to spread the payment over a flexible period is wiser.

The Breaking Point Between the Solar Power Installation’s Cost and Utility

Considering how much it has cost you to install a solar power system in your home or business, you should know if it’s a worthy investment or not. Before paying off the entire cost, calculate the overall installation bill and how long it’ll take you to pay the same amount to your traditional energy supplier. Consider that your solar power system will mostly be flexible and available, allowing you to become an independent power generator. An accurate calculation focusing on the future inflation rate can help you determine whether it’s wise to pay off your solar power installation bills or finance them for easy repayment over the years.

In the end, you’d find that your solar power system offers the flexibility you may not enjoy from your traditional power supplier. You become an independent power generator that uses as much power as generated or stores it up for later use – unlike the traditional power source. Considering these factors and your budget or financial strength, it should be easy to decide.