Here Comes the Sun

2019 Update:  This blog post refers to a retired lesson. If you'd like to explore alternative energy, check out the lesson Fuel Economy in which students use linear equations to compare the costs of driving a car with a standard engine versus a hybrid engine and debate whether new buyers should always go green. 

As the world's population grows, so does the demand for smartphones, smart TVs, and even smart cars. But there's something not so smart about all of these "smart" devices: namely, the way we get the electricity used to power them. In America, electricity often comes from coal power plants, which fill our atmosphere with carbon dioxide while we're filling our iPhones with the latest pop hits. Unfortunately, as 60 Minutes reported, coal is cheap, which explains why we use it even though it's so dirty.

Thankfully, there are several alternatives to coal — e.g. wind, hydroelectirc, and solar power — that can generate much cleaner energy. Unfortunately, these alternatives can be expensive, meaning that when it comes to electricity, people are placed in the uncomfortable position of deciding between what's best for the planet and what's best for their wallets. Even though the cost of solar power has decreased recently, for many people it's still more expensive than coal. Which brings us to the question: does it pay to be dirty?  (Hmm. That didn't come out quite like I intended it to.) Or, if you're in more polite company: are solar panels worth it?

Typically there are three options to consider. You can stick with your local utility, even if it means you'll have a higher monthly bill. You can buy solar panels, which is expensive up front, but eliminates your monthly bill entirely (there are also government rebate programs to help subsidize the cost). Or, you can compromise and lease solar panels; you don't get any rebates, but the installation and monthly costs are fairly low.

Here's how this might shake out in Texas, where the typical household spends around $109 a month on electricity.  (This is based on an average usage of 910 kilowatt-hours (kWh) in a month, and a cost per kWh of 12 cents, which is the Texas average.)

Electric Utility Solar, Buy Solar, Lease
Setup cost $0 $35,000 (After Rebate) $3,000
Monthly cost $109 $0 $80
Best Option? < 8.6 years > 33.3 years 8.6 — 33.3 years

In other words, sticking with the utility is the best option in the short term. After around 8.6 years, though, leasing solar panels becomes less expensive. And if you're in your home for the long haul (33 years or longer), then buying the panels outright is best.

This isn't the whole story, though. In reality, installing solar panels may not completely free you from the grid. In fact, if you need more juice than your panels provide — that is, if the capacity of your solar system is less than your usage — you'll have to buy the excess electricity from the utility (at the market rate). On the plus side, if your usage is less than your system's capacity, you can sell that excess power back to the utility. The free market strikes again!

You can use the interactive below to explore when each electricity option is the best for you. (Note: we're assuming that (1) you can sell electricity back for $0.05 per kWh, and (2) solar panels cost the same regardless of how much electricity you need. This is reasonable up to a point, though the needs of someone using 100 kWh per month will be very different from those of someone using 10,000 kWh per month.)

For example, if a household uses 910 kWh each month in Texas, leasing a 1000 kWh solar system becomes a financially attractive option after a little over 7 years; once again, though, buying only outpaces leasing after around 33 years.

So, are solar panels worth it? If you're going to be in your house for a while, then go ahead and lease them. If you're sticking around for a really long time, then buying may be the way to go. But even if looking at these numbers makes you hesitant to take the solar plunge, remember this: in order for the price of solar to keep falling, demand for solar power needs to grow.  This means that in order for the future of solar to seem, well, bright, some of us may need to dig deeper into our pockets today to help ensure a cleaner future tomorrow.

Teachers, want to have this conversation with your students?  Check out our new lesson, Here Comes the Sun.

One thought on “Here Comes the Sun”

  1. Hi all - Just a heads up that this very cool lesson was retired in 2019. Check out the lesson Fuel Economy to explore alternate energy in the context of vehicles, also using linear equations. Enjoy!

Leave a Reply

Your email address will not be published. Required fields are marked *