Solar power has surged in popularity over the past few years, thanks in part to the rise in energy prices combined with increased public awareness around climate change and environmental issues. Not only is solar power good for the environment but switching to solar power offers some very attractive financial benefits.
Solar Power Costs Prohibitively High a Decade Ago
When photovoltaic systems were first introduced, the high cost made it virtually impossible to justify an investment in solar power, especially for homeowners and small-to-medium business owners. Back in 2010, the average cost of a kilowatt-hour of solar energy was 38 cents. By comparison, the average retail electricity price nationwide was 9.82 cents per kilowatt-hour, or about one-quarter the cost of solar energy.
Given the cost difference between conventional, grid-based power and solar power, it’s easy to see why transitioning to solar power simply didn’t make sense for most homes and businesses.
Solar More Affordable Than Ever
Thankfully, the gap between the cost of a solar photovoltaic system and the cost of grid-based electricity has shrunk over the past few years, thanks in part to the numerous government incentives for those who opt to ‘go green’.
There are now a number of property tax credits available to home and business owners who opt to use alternative energy sources, including solar. These credits often cover a wide range of energy-efficient systems and devices including geothermal, or ground source, heat pumps that provide both heating and cooling. Small wind turbines, solar water heaters, solar air heaters and fuel cells can also qualify for tax savings, making the overall cost of using solar power and other alternative energy sources much more affordable than they had been.
Global Solar PV Prices Plummet
According to Our World in Data, a global research organization affiliated with the University of Oxford, the average global price per watt of power generated by a solar PV panel in 1976 was a staggering $106.09 USD. By 1990, that price dropped to $8.81, and as of 2019, the cost of one watt of solar-generated power was just $0.38.
Solar Installations Add Value to Properties
Not only has the overall cost per kilowatt-hour for solar power fallen, but demand for properties with solar photovoltaic systems has steadily risen. In many major real estate markets, buyers are willing to pay a sizable premium for homes that already have a solar system installed, and that’s a trend that’s predicted to continue well into the next decade.