Cost of Energy

Francis Knows: Cost of Energy

Cost of EnergyThe energy you use at your home or facility is billed by the kilowatt-hour (kWh) consumed. Your utility has a rate at which you are charged for each kWh, known as your tariff. Aside from social and ecological benefits, solar offers the advantage of generating energy at a cost that is lower than what your utility charges. The dollar rate at which solar produces energy is called the Levelized Cost of Energy (LCOE). The LCOE divides the total net expenses associated with your solar installation by the total expected energy generated over the guaranteed production lifespan of the system, which is typically 25 years; although most systems last much longer. Keep in mind that a solar LCOE is fixed for the life of the system, while utility rates typically inflate every year, so your savings only grow! And, unlike investing in the stock markets, your solar investment will never suffer a recession!

Solar Cost of EnergyAbove and beyond measurable savings on your bill, solar installations also add to the value of your home! While there is some debate about added home value, Forbes found in 2011 in California that solar installations add nearly $4 per watt installed¹, and the Appraisal Journal saw a range of 3% - 20% of home value increase when going solar². A common and conservative estimate for added value in our area is 10 years of expected production at today’s energy rates, which equates to about 48% of your initial purchase price – and these values do not attempt to quantify the general market appeal of a solar home to prospective homebuyers! Please consult a licensed real estate agent for more information about selling a solar powered home in your area.

*Francis does not guarantee home appreciation values.
¹ How Much Do Solar Panels Boost Home Sale Prices? – August 1, 2011
² Lack of Data Complicates Valuation of Green Homes: The Appraisal Journal – March 31, 2015