Connecting your home to power comes at a cost, be it solar energy or electricity. Electricity has been the most common source of energy for a long time, simply because it’s convenient. However, the energy industry is changing. Solar energy has become increasingly popular in the recent past thanks to its cost-cutting and environment-friendly nature.
Nevertheless, most people still find electricity the easier and more available way to power their homes. While both energy sources have their pros and cons, your choice will depend on your budget and energy needs. This article will give you an exhaustive cost comparison for solar energy and electricity to help you make an informed decision.
Cost of Electricity
The cost of electricity is determined by a combination of generation, transmission, fuel prices, and maintenance of the equipment used. This explains why the cost of electricity cannot be steady. According to the US energy information and administration, the average monthly electricity consumption for an average US household in 2019 was 877kWh, translating to $114 before tax.
Over the last ten years, the cost of electricity has significantly risen—by almost 4%. Electricity prices vary across different regions due to the disparities in production costs, demand, and availability of resources. The main factors which affect the cost of electricity include:
Fuel is essential in the generation and distribution of electricity. Since fuel prices fluctuate, high energy costs will increase the price of electricity production.
Extremely high temperatures increase the demand for cooling, therefore, raising electricity costs.
Transmission and Distribution
Due to the effects of wear and tear or damages resulting from harsh weather, the equipment used to distribute electricity requires regular maintenance. The maintenance costs are factored in when pricing electricity.
The Cost of Solar Energy
Solar energy has gained popularity recently. Apart from the initial setup cost, harnessing solar power directly from the source saves you monthly utility costs and gives you unlimited access to the power you generate.
However, depending on your location and weather conditions, your solar system’s effectiveness may vary. In areas where the sun shines frequently, solar energy will be more cost-effective.
With advancements in technology, solar companies are now able to produce quality solar panels at affordable costs. Solar installation and maintenance costs have also dropped by 70% in the last decade due to the growing popularity of renewable energy sources.
Additionally, as polysilicon prices decreased, the overall cost of silicon solar modules went down by 94% between 2008 and 2011. Some of the factors that contributed to this significant drop include:
- High competition leading to excess supply
- Increased efficiency in solar cell, causing high generation of solar energy
- Advanced manufacturing technology
Cost Comparison Between Solar Energy and Electricity
With the availability of leasing and funding options, acquiring solar panels for your home has become easy. You can choose a plan that is friendly and manageable for your current situation. With a wall-mounted solar panel in a well-lit location, you can generate an average of 9200kWh annually using a 5 kW system. Assuming the electricity price is $0.125 per kWh, you will save an average of (9200×$0.125÷12) = $95.80 monthly.
Solar energy is notably cheaper than electricity. Whereas electricity costs keep fluctuating, solar energy will be free after paying off the initial installation costs, and the panels require little to no maintenance.
Contact Mynt Solar to ask any other questions you may have. Let’s figure out if solar panels are right for your energy needs!