Solar Energy Cost – How Affordable Can It Really Be For Domestic Use?

There are two schools of thought when it comes to solar energy appliances. One school of thought talks about the fact that current solar energy cost can be only competitive in terms of small sized units that work on solar power such as calculators, water sprinklers, charging devices etc. In terms of larger applications where powering an entire home is considered, they cannot be considered an option due to their high initial investment.

The other school of thought while not denying the above facts, try to focus on the core future needs of the population. It says that while current solar energy cost look to be quite large as compared to the established fossil fuel and hydroelectricity production mechanisms, the fact is that it will only get better as time moves on.

For example, the current solar panel has an efficiency of roughly 20-24% meaning that less than one fourth of the incident sunlight falling on the panel can actually be stored into usable energy. This is the major reason why the solar energy cost for large power generators stand at 25-40 cents per kWh (kilowatt-hour). However, if the solar energy cost is to be calculated for longer periods like 7-10 years, for a residential solar power project, then the results are quite different!

For example, an average construction and instalment cost of solar energy based generator for a 3-bedroom apartment would come to $30,000. Nonetheless, after a period of 7 years, the cost of energy generation would fall from a 40cent per kWh to a meagre 10 cent per kWh as the solar energy cost then would only be the fractional amount being taken from the power grid. Thus, while technology constraints may increase the initial setup cost of a solar power system, the various relaxations in the form of tax benefits, government subsidies and other cuts, make this an attractive proposition for anybody wanting to cut down their expenses over a long term.

In order to take a good look at solar energy cost in today’s terms and therefore the future financial independence, let us look at a practical example. The Lani Bay Hotel in Hawaii has installed a solar powered generator that produces roughly 75kilo-Watt output. Now, in a period of five years, this solar panel array will pay itself off, leaving the hotel with free energy and minimal maintenance costs.

Therefore, if one commercially inclined hotel can take a step looking at the future, then, imagine what the output for a small domestic setup will be after a period of 5 years. In fact, experts peg the solar energy cost of a home based system to be just 4-6 cents per kWh in the future if solar powered alternatives are considered!