Oct 08, 2021
A significant benefit of PV installations is the lower energy costs, but the size of this benefit depends on the amount of solar energy that can be generated under available conditions and the way utilities charge for electricity.
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The first thing to consider is the level of solar radiation available in the geographical location of the home. When using solar panels for homes, the closer to the equator is usually better, but other factors must be taken into account. The National Renewable Energy Laboratory (NREL) has produced maps for the USA showing solar radiation levels; a tool on its website provides detailed solar power information for specific locations in the USA.
Similar maps and data are available for other countries, often from government environmental agencies or renewable energy organizations. Equally important is the orientation of the home; for rooftop arrays, a south-facing roof with no trees or other objects blocking the sun can maximize the use of solar energy. If this is not available, the solar power system for homes can be mounted on external supports and installed away from the house, incurring the additional cost of extra hardware and cabling.
A second consideration is the timing of solar power generation and how the utility company charges for electricity. Solar power generation occurs mainly in the afternoon and higher in the summer, and therefore corresponds to the overall electricity demand in warmer climates, as it is at these times that air conditioning consumes the most energy. Solar energy is therefore valuable because alternative methods of energy production used to meet peak energy demand (usually natural gas-fired power plants) tend to be expensive.
However, utility companies usually charge residential consumers a flat rate for electricity, regardless of the time of consumption. This means that homeowners' solar power systems do not offset the expensive cost of peak electricity production, but only the price they charge for electricity, which more closely resembles the average cost of electricity production.
However, many utilities in the US have introduced pricing schemes that allow homeowners to be charged at different rates throughout the day to reflect the actual cost of generating electricity at different times; this means higher rates in the afternoon and lower rates in the evening. Photovoltaic solar arrays can be very beneficial in areas where such time-varying rates are used, as the solar energy generated will offset the most expensive electricity.
Exactly how beneficial this is to a given homeowner depends on the exact timing and magnitude of rate changes under such a scheme. Similarly, the pricing schemes of some local utilities can vary at different times of the year due to regular seasonal fluctuations in demand. Those with higher summer rates make solar more valuable.
Some utilities have tiered pricing plans in which the marginal price of electricity varies as consumption increases. Under this type of scheme, the benefits of a solar system may depend on the amount of electricity used by the household; in some areas, rates increase sharply as consumption increases, and larger households (with large energy needs) may benefit most from a solar array that offsets the high cost of marginal consumption.
Another benefit of house solar panels is that homeowners can sell solar power to the utility company. In the US, this is done through 'net metering' schemes, where residential consumers use the electricity they feed into the grid (when the solar panel generation rate is greater than the household electricity rate) to offset the electricity consumed at other times; the monthly electricity bill reflects the net energy consumption. Specific net metering regulations and policies vary from region to region. Homeowners can refer to the DSIRE database and should also contact their local utility company to find more specific information.
A final benefit is a potential impact on the value of the home due to the addition of a solar array. In general, it is reasonable to assume that solar panels will increase the value of most homes.
Firstly, there is an undeniable economic benefit in lower electricity bills due to solar arrays. Secondly, the trend towards 'green' living means that there is a growing demand for homes with a smaller carbon footprint and powered by renewable energy. Finally, buying a home with solar installed means that the investment (for the homebuyer) is made through a mortgage. This ease of financing may make solar more affordable for homebuyers than buying a home without solar and subsequently adding a solar array.