A Practical View of Solar Energy Cost And Its Impact On Economy

While all this talk of ‘going green’ by advocating solar energy for powering our future is all good, it also needs to be substantiated by proof of sustainability. Yes, environmentalists might have their way, even the rich and famous can take a dab at solar panels for powering their homes. However, can we, the general masses, look at it practically or are we just making much ado about nothing? Now, it would not suffice by simply stating that solar energy has a lot of potential to be the next large scale economy driver. Therefore, let us look at solar energy cost to better understand, its potential impact on us and our economy in the coming years.

The solar energy cost is typically calculated in price per watt. Since the energy source i.e. the sun is a non exhaustible source of power, therefore, the constrictions automatically appear in the technology or material used to trap solar energy and then convert it into our favored unit such as electricity, light, heat or other forms. Hence, from the manufacturer’s side as well as that of the buyer, the solar energy cost of bearing an installation ca n only be realised if the total cost of installation is compared against its electric power output. That will give us an idea of how long it should run to pay back the investment in terms of watts.

Now, the average solar energy cost is around $8-10 per Watt according to 2009 figures in the US. This is further decreased to $3-4 per Watt in the face of government programs as well the low solar energy cost incurred by buying the components in larger volumes. An easier understanding can be obtained if we convert these costs in terms of units of electricity usage. In other words, by converting the data into ‘Kilowatt Hour’ or kWh, we can directly compare it with our existing electricity bills that we pay for using conventional off the grid power.

Hence, that would bring the solar energy cost to 25-40 cents per kWh when bought without applying any cost cuts. This is practically 3-5 times of the current bills we already pay. So, what happened to all the promise? Well, if you consider taking the cost effective approaches to installing a solar energy system by taking into consideration grants and tax benefits from the government as well buying cheap yet quality products for your ‘solar power system’ then the cost drastically come down to 10-12 cents per kWh!

With increasing in solar panel construction technology and therefore the subsequent rise in efficiency of the panels moving beyond the 20% mark, the solar energy cost will come down further. Thus, solar energy seems to be the major energy bottleneck remover once it is realised over a countrywide level.