Driving around the part of Virginia that we cover, whether along rural roads in the Shenandoah Valley or in cities like Roanoke or Lynchburg, I’m noticing solar panels popping up all over the place.
Since I install solar systems I tend to notice them. But anybody who’s interested in solar has certainly seen the same thing recently. You can now find solar all over Virginia.
You may have read in the news that electric utilities have started on projects to build big solar arrays, such as this one that Dominion is doing for Microsoft.
But what I’m talking about is smaller solar installations on the rooftops of family homes and small businesses or smack dab in the middle of a farm.
There’s a good reason that solar has started spreading around Virginia now: recently, it’s gotten a lot more affordable.
The price of solar in Virginia follows a national trend where the cost of home solar systems went down 5% from 2014 to 2015, according to a new report from the US Department of Energy (DOE). In fact, last year was the sixth year in a row that prices declined on home solar.
This chart from their recent report on solar prices helps tell the story. The price of home solar is represented by the green line at the top, and costs are listed as dollars per watt for all the costs to install a solar system, including equipment, labor, permits, and company overhead:
It’s Not Just Lower Panel Prices
In the past, the price of getting a system on your rooftop went down mostly because solar panels kept getting cheaper.
After dropping for years, now the price of solar panels (also called PV modules) has leveled off. But the costs of other things in a solar installation have started to go down. As the DOE explains:
The continued decline is especially noteworthy given the relatively stable price of PV modules since 2012. The report attributes recent system price declines, instead, to reductions in other hardware costs and to solar “soft” costs. The latter includes such things as marketing and customer acquisition, system design, installation labor, and permitting and inspections.
Like many installers based in Virginia, Main Street Solar has always run a pretty lean operation, trying to keep prices for our customers down by keeping our overhead low. In my opinion, I believe that we’ve done a pretty good job — as have many of our friends in the Virginia solar industry.
What Home Solar Costs Today in Virginia
All that has meant that solar is now affordable for many more homeowners in the Old Dominion. Just take the figures listed by SolarPowerRocks.com for an average sized 5 kilowatt home solar system in Virginia with an expected lifespan of 25 years:
- Installing a typical 5-kW solar system should start at about $18,750.
- The federal government offers a tax credit of 30% of out-of-pocket costs, so you’ll get $5,625 back next April.
- Then there’s your first-year energy savings. That’s another $749, and it brings the cost after 1 year to just $12,376.
- With all the energy bill savings rolling in, your system will pay itself back after 14 years. Once that happens, you’ll be seeing over $1,200 per year in savings until the end of your system’s life.
Now, these are just averages and, as they say in car commercials, your mileage may vary.
For example, Main Street Solar installs home systems that start for much less than $18,750, especially those smaller than 5 kilowatts. Also, we aim to design systems for our customers with a payback time of ten years or less.
Rate of Return and Increased Home Value
That means our customers may be seeing a higher annual return on their investment in solar than the Virginia average of 6.8% estimated by SolarPowerRocks. And I don’t need to mention that, in today’s economy, earning nearly 7% on your money is better than you’ll do in most investments these days, especially ones that are as safe and predictable as solar.
And, on top of all that, your home value will increase in direct relation to the amount of money you’re expecting to save on electricity over the life of the solar panels. SolarPowerRocks estimates that increased home value at nearly $15,000 but for our customers with a quicker payback time, the figure could be $20,000 or more.
Whatever the reason for solar’s price decline nationally and in our state, given that solar offers a quicker payback and control over your energy costs in the future seems to have convinced many Virginia homeowners that now is the time to go solar.
Throw in rising rates from local electric utilities including Appalachian Power and Dominion, and solar is an investment that starts looking better and better.
If you’ve been thinking about solar for a while, and would like to see if it’s right for you, we’d be happy to talk to you about it. Our solar home assessment and quote will determine if your home or land could host a solar energy system. And of course, it’s free and there’s no obligation.
— Andrew Brenner, Main Street Solar
