Solar photovoltaic panels can offer homeowners reduced electric bills and are a more environmentally friendly way to power up a home. But they can be pricey to install, leading to questions about whether the return on investment is worth it.
Home Innovation Research Labs recently analyzed the cost-effectiveness of rooftop solar panels on new homes in five markets: Phoenix; Tampa, Fla.; Kansas City, Mo.; Boston; and Seattle. The analysis did not factor in any financial incentives, which are available in many markets to help offset the costs of installing solar panels.
Using solar panels is more of a draw in markets where electricity prices are higher. For example, Home Innovation Research Labs found that it is more cost-effective to install rooftop solar panels in Boston than in Phoenix or Tampa, Fla. Boston’s high local electricity pricing is one of the main reasons why.
The availability of solar can vary greatly by area. Out of the five markets tracked, Phoenix had the highest solar resource averaging 5.79 kWh/square meter (m2) per day compared to Seattle with the lowest solar output a 3.47 kWh/m2 per day.
Researchers found that solar panel systems facing the south, southwest, or southeast tend to have shorter paybacks.
“The cost-effectiveness of roof-mounted solar PV panels depends on a range of factors that are location specific (utility tariff, solar resource) and project specific (system cost, panel orientation,” the National Association of Home Builders reports on the study.
Source: “Solar Panels on a New Home: A Cost-Effectiveness Analysis,” National Association of Home Builders (Nov. 30, 2020)
