How Much Does a Home Owner Save on a New Home With Solar Panels?

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Is there a good return on investment on solar photovoltaic panels (PV)? They do lessen the environmental impact and reduce electric bills but they are a big investment. Home Innovations Research Labs did a study to determine the PV’s cost-effectiveness.

The study was done in five different markets which included Phoneix, AZ; Tampa, FL; Boston, MA; Kansas City, MO and Seattle, WA using the System Advisory Model (SAM). The System Advisory Model is a software that was developed by the DOE’s National Renewable Energy Laboratory (NREL). It takes the energy performance of the solar PV array at a specific location and for a specific house configuration and turns it into a model. It then calculates the expected electricity production and cost-effectiveness metrics for the system using local utility tariffs.

They are able to study the model and determine a new house construction scenario based on the assumption that the solar PV system was installed before the house sale as part of the new home package. The evaluation is based on local electricity pricing, utility tariff for purchasing excess electricity generated at the house, solar resource at the site, and panel orientation and installed cost of the PV panels.

The study concludes that it is more cost-effective in certain areas in the country while it is not in others. For Boston, it is effective because of Boston’s high local electricity pricing and favorable purchasing tariffs. Below is a chart detailing the outcome of the study done.

City Solar resource, kWh/m2/day Metering agreement Electricity price, cent/kWh* Price for site generated electricity, cent/kWh Simple payback
Phoenix 5.79 Net billing 3.4-26.8 2.8-3.0 16-42 years
Tampa, Fla. 5.22 Net metering 10.3-12.7 ** 18-33 years
Boston 4.06 Net metering w/ $ credits 19.6-22.3 18.0-20.7 12-21 years
Kansas City, Mo. 4.38 Net metering w/ $ credits 7.5-15.7 2.4 20-36 years
Seattle 3.47 Net metering 8.7-10.7 ** 25-59 years

* Prices vary by time of day, month, and/or max usage.

** Net metering agreements credit customers for site-generated electricity in energy units (kWh) and are not converted to $.

Click Here For the Source of the Information.