While solar energy requires an initial investment to purchase and install, people find that solar energy is much less expensive than electrical energy in the long term due to the increase in the price of electricity. Accessing energy directly from the source makes more sense than paying for it indirectly from the local power plant. Clearly, solar energy is more cost-effective than “regular” or standard electricity. According to the World Economic Forum (WEF), installing new solar panels is cheaper than a comparable investment in coal, natural gas, or other fossil fuel options.
1.From the above points, solar energy is considerably cheaper than electricity. Energy companies are developing systems that can provide energy at a much lower cost than regular electricity, without forgetting the impact on the environment. Solar energy is easily installed on the roof and takes advantage of an already available resource. By comparison, the cost of electricity across the country continues to rise as the cost of solar energy decreases.
The cost elements that make up a residential solar system include solar modules, system design and system balancing (BOS), which is comprised of an inverter, connection devices, a bidirectional billing meter, and installation labor. In addition to installation costs, there are some additional costs associated with operating and maintaining a photovoltaic solar panel. Calculators of this type are a good starting point if you are new to the world of solar energy and want to understand the basic cost model. Estimated and leveled electricity costs (LCOE) of solar energy at the utility scale with support of revenues, in relation to the LCOE range of gas and coal energy.
Homeowners should also check with their local utility company to see if it offers financial incentives for installing solar energy and determine what their policy is for interconnecting to the grid and selling excess energy to the grid. This is because solar energy only works when the sun shines when it's cloudy or at night—they don't generate electricity. The table shows that solar electricity is now 20 to 50% cheaper than what the IEA had estimated in last year's outlook, and that the range depends on the region. In other words, most homeowners will end up seeing the benefits of a solar energy system; it may only be decades before this becomes a reality.
While it's cheaper to build renewable energy when considering a new plant, that metric doesn't necessarily apply to the operation of an existing fossil fuel plant, explains Ashley Langer, an energy economist at the University of Arizona. Now, the IEA has reviewed the international evidence and has concluded that, in the case of solar energy, the cost of capital is much lower, from 2.6 to 5.0% in Europe and the US. In the United States, from 4.4 to 5.5% in China and from 8.8 to 10.0% in India, largely as a result of policies designed to reduce the risk of investments in renewable energy. Then, the LCOE can be compared to the cost of electricity from a utility company; remember that the relevant price is the one that occurs during the times when photovoltaic solar production is reached or close to it.
Many homeowners planning to sell them in the future could make a smart investment by upgrading them with solar panels. Langer says that one of the main ways in which political leaders can ensure an energy transition is by providing consistent subsidies for solar and wind energy.