Why does solar cost so much?

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According to Google, this questions is asked often enough to deserve an autofill. When you google “Why does solar …” Google suggests “… cost so much?” This implies it is a question many people search. You should try it and read what it says. To summarize, it goes into the cost of materials, labor, scarcity, tariffs, etc. Not once does Google address the relativity of the question. Why does solar cost so much compared to what? A new jet? Braces for the kids? Eggs? Paying your power company’s constantly increasing electric rates?

To us, that is the most relevant comparison. What you are doing now, paying your electric bill every month, is going to continue for the rest of your life unless you find an alternative source of energy. I am sure there are outliers. Maybe you are an off-grid prepper, or a van-life nomad, or a perpetual primitive camper and feel electricity is for the weak. We are big fans, but this post is not for you, we are talking to the rest of us here.

This post is for people who believe the following: Most of the US population is paying for their electricity monthly and are resigned to doing this forever. Most of the US population just accepts that what they pay monthly is going to increase every year and has. We cannot switch power companies. We feel confident this includes most of the market.

Our power companies make these pills easier to swallow by increasing a very small, almost unnoticeable, amount every year. Typically, it is a minimum of 5%, on occasion it has increased much higher, rarely it has increased less. These increases incorporate the cost per kWh (kilowatt hour), the rate, and also connection fees. We don’t know about you, but our power company does not consult with us before making these increases.

Year over year, we don’t really notice. According to Google, the average residential electric bill in Florida ranges from $157 to $244 per month. Let’s use $200 to keep the math easy. If your $200 electric bill goes up 5%, next year you will be paying $210 per month for electricity. $10 a month is not a life-changing amount of money. Neither is the $120 more it will cost you for electricity next year.

Here is where we get into life-changing amounts of money. We need you to realize that this 5% increase is compounding, year over year, for decades. Year after next, your power bill will increase 5% over the $210. Now you are at $220.50. Still, probably not life changing, but let’s go back twenty years.

Google isn’t as clear on this and gave me the rate per kWh in 2005 and I had to find the average residential monthly kWh consumption (1107) and multiply that by the rate in 2005 ($.089) to get $99.63 for an average monthly expense. This does not include any fee increases. So, electricity rates have roughly doubled over the last twenty years. That may not be alarming to you, and maybe it shouldn’t be, consider inflation and all that. Well, maybe so, but what if you could step out of it altogether? What if you could be both rate increase and inflation-proof?

Let’s do different math. Let’s just consider the increases. That is the expense we want to compare solar to. What if you bought solar twenty years ago? It would still be producing electricity for you today. If it was sized properly, it produced all the electricity your household consumed. If you paid cash, it would have taken five to ten years to pay for itself and you have enjoyed ten to fifteen years of return on investment. (At this point, you should have recouped your entire initial investment and are getting electricity for free.)

If you financed it, and your payment was roughly what your power bill was. (This was possible in 2005.) Over thirty years, solar is typically financed for twenty-five to thirty years, you will pay about $36K for your solar, but that solar will save you about $48K by the time you reach the end of your term. You froze your monthly electric expense at 2005 prices. Once it is paid off, you pay virtually nothing for electricity while everyone else continues to pay the increasing rates. All that is if you went solar twenty years ago.

Most of us didn’t. What if we did it today? A $200 power bill, increased by 5% a year compounding for thirty years, will wind up costing us an additional $95,000. What if we could put solar on your home to compensate for all of your consumption for about the same amount it cost (financed) in 2005? We can. It pretty much destroys the chalking it up to inflation excuse for increasing power rates.

Caveats …

These are all estimated numbers. Two years ago, Google said the average power bill in Florida was $164. You can go back and read our older blogs to confirm this. Last year Google said the average bill is $224. Now it says $157 to $244. We are not all over the place, Google is.

Three years ago, Google and every single power rate reporting agency and website said rates increased by a minimum of 5% a year. One to two years ago they said that some power companies in Florida were raising rates by as much as 16% to 22%, and they did. We checked. Now, if you google these questions, results are saying rate increases are in the 2.67% to 6.3%. In the same search a result came back that says, “If your electric bill is noticeably higher than last year, you’re not alone. Electricity rates are spiking nationwide, straining household budgets and business operations alike.” Please make it make sense.

These fluctuations are frustrating to a blog poster who wants to be accurate in their posts. So, today’s (5/5/2025) results are what was used for this post. Google may contradict some of these exact numbers by the time you google them, or tomorrow, or they are already different.

The math was done on a website we created: www.costtodonothing.com and that, at least, has not changed. It gives you the option to use 5%, or 2.67%, or 6.3, or 22% or whatever increase you believe is a reasonable expectation.

We have quoted no exact prices here in this post, but the ones we alluded to are based on regular installations. If your home is higher than one story, or requires ground mounts, has a steep northern roof, or you want all your panels to face north, or you want to add batteries, if you finance and interest rates change… your price will be a little different.

In summary, average electric rates are somewhere between $100 and $300 a month here in Florida. They are going to increase somewhere between 2% and 16% every year. It will cost the average Floridian household between $30K and $150K in just increases. Solar freezes your rates at today’s prices. You can go solar for cash and see an ROI in five to ten years. You can finance solar and get your payments to be roughly what you are paying for electricity now, with no money down, and therefore never take a penny out of your pocket to go solar. The interest rate will not change. The payment will not change. Solar costs less than paying rate increases. It makes more sense to pay for solar than to continue paying your power company.

So, why aren’t we on the phone yet?

Please, send us the last twelve months of your electric consumption to dave@allsolarenergy.com. If you need help with this, call our GM, Dave, at 352-598-3789.

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