What Are The Top 12 Solar Energy Pros And Cons?
If you’re thinking about investing in renewables and going solar, there’s a lot more to it than just looking at, whether you’ll get cheaper electricity, or how much money you can save with solar panels.
We’ll look at the benefits and see if the solar energy pros outweigh the cons. Before we dive in, let’s first get an overview of why it features as a key part of any renewable energy strategy for homeowners and businesses alike.What Is a Solar Energy?
What Can Solar Power Be Used For?
From solar homes to solar businesses, you can power anything electrical. Including heating, water, lighting, small and large appliances. It’s because of its versatility and the fact that solar Is low maintenance, that the world has seen exponential growth in utilizing solar energy.
So moving to solar is worth considering, however, as with anything, the devil is in the detail so let’s look at solar energy pros and cons
What Are The Pros Of Solar Energy? The Advantages
Solar Energy Is Sustainable And Decreases Your Carbon Emissions
As the world moves away from its reliance on fossil fuels, coupled with the ongoing climate change crisis, it’s critical as good global citizens that we reduce our carbon footprint. Solar energy does just that and is one of the reasons it’s booming.
The Center For Climate And Energy Solutions forecasts that “Solar generation is projected to climb from 11 percent of total U.S. renewable generation in 2017 to 48 percent by 2050, making it the fastest-growing electricity source.”
When looking at solar energy pros and cons, the fact that it’s renewable, clean to produce and doesn’t harm the environment has to be one of its greatest benefits.
In fact, when looking at solar energy pros and cons, it’s good for the planet and also great for your pocket. Let’s look at that in more detail.
Solar Energy Can Reduce Your Utility Bill
Statista has projected that “the residential electricity price in the United States will increase by 1.3 percent between 2021 and 2022.”
These rates will rise even further over the next decade as global electricity prices increase. Whether you use oil, gas or solid fuel to power your home, now is a great time to consider using solar energy to complement your existing sources of electricity or even switching completely.
As solar is cheap to produce and renewable, it’s one reason we’ve seen a corresponding increase in solar power capacity.
Depending on where you live, creating electricity with your own solar panels will more or less guarantee to reduce your utility bill. Even more, you’re not reliant on your local energy company.
When looking at solar energy pros and cons it’s important to see how it can cushion you from rising energy costs.
If you are looking at the financials around solar energy, check out our guides on, How Much Do Solar Panels Cost?
You Get Paid For The Electricity Produced By Solar Energy
Yes, that’s right. In the USA there are incentive schemes to help you earn money from the solar panel array you install. There are three major initiatives, Net Metering, SRECs and The Federal Solar Tax Credit. These are available to you if you live in the right area. When looking at solar energy pros and cons, this is definitely one of the biggest pros.
What Is Net Metering?
Essentially, it is a program designed to support homeowners in adopting sustainable energy and electricity systems.
If you have a renewable energy source, such as solar panels, your excess electricity is sold back to the electric grid and you earn credits against your utility bill.
Most states have adopted Net Metering programs however, they vary depending on the state.
How Does Aggregate Net Metering Work?
This allows a property owner to total the use of all their energy metres and offset it from one renewable energy metre on the property.
The 17 states following this program are:
- Arkansas
- California
- Colorado
- Connecticut
- Delaware
- Maine
- Maryland
- Minnesota
- Nevada
- New Jersey
- New York
- Oregon
- Pennsylvania
- Rhode Island
- Utah
- Washington
- West Virginia
Other names for this program include community net metering and virtual net metering.
How Does Conventional Net Metering Work?
Also known as individual net metering, it connects multiple metres and properties to a single metre.
What Are Solar Renewable Energy Certificates (SRECs)?
Let’s look at SRECs. Certain states have SRECs in place that allow homeowners to sell some of the solar electricity they have generated to the state’s energy providers. SRECs sold represent the “solar” part of the electricity generated by a homeowner or business.
Utility companies buy SRECs from homeowners to meet their Renewable Portfolio Standard (RPI) obligations. We’ll chat more about what they are in a moment. This means that you can earn a significant amount of extra income if you have your own solar panels. Again great when viewinging at solar energy pros and cons.
How Does SREC Work?
For every megawatt per hour (MWh) you solar panels produce, you earn an SREC or credit. Then, through what’s called a Solar Carve-Out, you sell the certificate to the energy companies which helps them show to the state that they are meeting their renewable energy commitments.
What States Have A SREC Program?
Unfortunately, not all states have this in place. Currently, only 7 states throughout The USA have SREC markets. They are:
- Washington DC
- Delaware
- New Jersey
- Massachusetts
- Maryland
- Ohio
- Pennsylvania
Even though New Jersey and Massachusetts have an SREC program, they have stopped new homeowners from joining the scheme. So with solar energy pros and cons, it depends where you live.
What Is A SREC Market?
Some states that have an SREC scheme have also set up what’s called an SREC market. This means that instead of selling directly to the energy company, you work with a middleman, either a trader or energy broker, who buys and sells the certificate on your behalf.
How Much Can I Earn By Selling SRECs?
As with any trading, the price will fluctuate with demand and market conditions. According to SREC Trade, the amount you can earn depends on each state. On average, it breaks down like this:
- “1 SREC = 1 MWh of solar electricity
- A 10 kW facility generates around 12 SRECs annually
- SRECs are sold separately from the electricity
- Value is determined by market supply and demand mechanics
- Facilities must be certified by a state to sell SRECs”
As of August 2021, the latest bid prices per state are:
- Washington District Of Columbia $385
- Delaware To be confirmed
- New Jersey $232
- Massachusetts $279
- Maryland $77
- Ohio $8
- Pennsylvania $41
As you can see, there is significant variation in SREC bid prices per state.
What Is A Renewable Portfolio Standard (RPI)?
It’s worth mentioning RPIs as a state needs to have an RPI before it can consider creating an SREC market. So even though your state may not have SRECs at the moment, if it has an RPI, then it could establish SRECs in the future.
So what is an RPI? If a state has an RPI, then it regulates utility providers and commits them to buy and generate a certain percentage of renewable power per year.
Some RPIs have a condition that a portion of this must come from solar. These are the solar carve-outs mentioned earlier. States that have an RPI include:
- Arizona
- California
- Colorado
- Connecticut
- District of Columbia
- Delaware
- Hawaii
- Iowa
- Illinois
- Maine
- Maryland
- Massachusetts
- Michigan
- Minnesota
- Missouri
- Montana
- Nevada
- New Hampshire
- New Jersey
- New Mexico
- New York
- North Carolina
- Ohio
- Oregon
- Pennsylvania
- Puerto Rico
- Rhode Island
- Texas
- Vermont
- Virginia
- Washington
- Wisconsin
Although this doesn’t quite fit into solar energy pros and cons, it’s worth mentioning.
What Is The Federal Investment Tax Credit?
If you are looking at investing in residential solar panels, you can claim a $ for $ federal tax credit.
According to the Office of Energy Efficiency & Renewable Energy, “a federal residential solar energy credit is a tax credit that can be claimed on federal income taxes for a percentage of the cost of a solar photovoltaic (PV) system.”
“It provides a 26% tax credit for systems installed in 2020-2022, and 22% for systems installed in 2023. The tax credit expires starting in 2024.” Again worth mentioning in solar energy pros and cons.
So although it isn’t monthly income like Net Metering or a SREC, it’s a handy lump sum to help you invest in a solar panel system.
You Save Money With Solar Energy
How Much Money Can You Save With Solar?
This is a big question and is reliant on a number of different considerations, such as the size and cost of your panels. So, how much could you save on average if you have solar panels installed?
What Is The Average Cost Of Installing Solar Energy In The USA?
For a solar panel, it’s $3.14 per watt, and the average system is 6 kilowatts (kW). With this in mind, the average solar system is about $18,840.
With your Federal Investment Tax Credit, that will bring the cost down by 22-26% based on what year you have it installed. Also, it’s worth checking out if your state offers any further financial incentives.
Will Solar Panels Reduce My Electricity Bill?
This is reliant on the state you live in, but yes, you will definitely enjoy electricity bill savings. According to Pay Less Power, the average electricity rates for The USA range from between $84 – $274 per month.
That means your solar panels would need to produce savings in electricity to offset the cost of electricity your utility company charges each month. Only then can you see how many years it will take to break even.
Later in the article, we’ll give you the math to work out how long it would take you to break even.
Some factors to take into consideration that will affect this include:
- The cost of the solar panel system
- Size of the panels and roof
- Hours of sunlight
- The angle of the roof
- The weather patterns in your region
- Whether you install the solar panels yourself
Your Property Value Will Increase If You Have Solar Energy
Something that is often overlooked is that if you invest in renewable solar energy, it will improve the valuation of your house.
According to research conducted by Zillow, solar power can increase your property’s value. So installing solar panels is not just an investment in earning a monthly return from electricity generation, it’s also adding value to your home. This is why we mention it in solar energy pros and cons.
Solar Energy Gives You Independence And Is Easy To Maintain
Having the peace of mind that you are not reliant on the utility company for your electricity is one of those intangible benefits that can’t be stressed enough. If you couple this with the fact that solar panels are easy to maintain and durable, it’s a real win-win.
What Are The 6 Cons Of Solar Energy? The Disadvantages
Installing Solar Panels Can Be Expensive
The Payback Time Of Your Investment In Solar Panels Averages 4 Years
The US Department Of Energy estimates that the average payback time is 4 years. However, this depends on your state and the incentives you have received, plus the average cost of your electricity bill from your utility company.
Essentially, to work out your breakeven time you need the:
- Total Set Up Cost E.g. $18 000 minus Incentives received E.g. $10000 = $8000
- Total savings per year, E.g. $1000 plus what you sell back to the electricity company through an SREC E.g. $1200 = $2200
- Set-up costs $8000 divided by the total saving $2200 = 6.5 years to breakeven
Something to remember is that during the year when your electricity costs are low, then the savings you make will also be low, which will affect the payback time which may affect how you look at this factor within solar energy pros and cons.
Solar Panels Aren’t 100% Reliable Because of Climate
Although the efficiency of solar energy is constantly increasing, it still depends on the sun. Electricity is still generated even in low sunshine, but it can be minimal depending on the climate.
The efficiency rate is determined by the percentage of solar energy being converted into electricity. This averages about 11% but with advances in technology the rate is getting better.
Even if you live in an area with low light exposure and terrible winters, modern solar panels will still generate electricity. You may need more panels depending on where you live, but your provider will help you work this out.
One thing is for sure there’s no power produced at night which you don’t really need to say when looking at solar energy pros and cons.
To Get The Most Out Of Solar Panels You Need Space
You Don't Have Enough Roof Space To Collect Sunlight
The power generated is calculated by Watts per square metre so if you have a small roof or limited amounts of land you may not get the return you need on your investment. It’s also worth noting once a panel is up it’s very difficult to move it.
Also if you live in an area of low light exposure and need more than the average number of solar panels, you may not have enough space to cover all of your electricity costs.
You May Not Have The Space For Energy Storage
Generating energy is one aspect, storing it is another. At peak times, you are producing energy, which is then stored in batteries. This means you need adequate capacity for storage, which can also work out be expensive.
Not all Roof Types And Buildings Are Suitable For Solar Energy
You May Not Have The Right Roof
The size of your roof is one consideration. You also need to take into consideration how the roof is created, which way it faces if there are any blockages by trees or other buildings.
All of this needs looking at before you determine if you can actually have solar panels.
For example, the materials and construction of the roof area is a critical factor when looking at an installation. If the structure isn’t sound or has been built awkwardly, then the solar panels can’t sit on the roof safely. This means that the cost of fixing this may be prohibitive.
Also, if you are living in an apartment in a city with limited roof access, even if you can have solar panels they may not be enough to generate the electricity you need so won’t be worth installing.
Your Home May Not Be Energy Efficient
You may have the right type of roof, space for storage and great light exposure, but how energy efficient is your property?
Solar panels are an investment. To get the best out of them, before installing, it may be worth ensuring you have made your property as energy efficient as possible. For example, making sure you have the right insulation, double glazing, etc.
Solar Energy At The Moment Isn’t Completely Environmentally Friendly
It Absolutly Reduces Your Carbon Footprint But Isn't 100% Environmentally Friendly
This is the current paradox. While it is the case that solar energy is renewable, cheap and emits zero greenhouse gas emissions, the manufacturing process of solar panels is not the green panacea that people think.
It not only uses harmful elements, but a number of them are not from sustainable sources. Materials such as Cadmium telluride, sulfur hexafluoride and copper indium gallium selenide are all found in solar panel manufacturing.
Besides this, The Renewable Energy Agency (IRENA) forecasts that “6 million tons of solar waste will be produced annually by 2050.”
However, it’s really important to bear in mind that these teething problems are being addressed. Solar panels are still one of the best forms of renewable energy.
- They are one of the least polluting forms of energy generation
- They are renewable and sustainable
As demand increases and technology advances, it is the solar energy industry is constantly looking at ways to address the environmental impact and strengthen the sustainability of solar panels. Something worth considering when looking at solar energy pros and cons.
To Summarize Solar Energy Pros and Cons
Think of solar power as an investment it’s the future of clean energy. Overall, there are some cons to solar energy including:
- High Installation costs.
- Not everyone will be able to have solar panels because of space and construction problems.
- Issues around the manufacturing process not being environmentally friendly.
- The reliability of solar panels compared to traditional sources of electricity generation.
However, the benefits of solar energy are especially strong, including:
- Federal tax incentives and state schemes to install solar panels.
- Saving on your utility bill.
- Not being reliant on energy companies.
- Earning from SREC and Net Meters as you offset the excess electricity you generate.
- The evidence that it increases your property’s value.
- The fact that you are reducing your carbon footprint and actively contributing to becoming more sustainable, which the planet desperately needs.
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