Overview:
- Solar energy now costs $58 per megawatt hour compared to $78 for natural gas and $122 for coal, making it the cheapest electricity source in history, says Lexi Crilley.
- The average solar panel payback period has dropped to 10 years, with systems lasting 30 years, providing two decades of free electricity.
- Climate change will increase solar value by 5%-20% in coming decades while protecting homes from rising utility costs and power outages.
Residential solar has long been praised for its environmental benefits as a form of clean and renewable energy.
For those who share the core values of prioritizing sustainability and combatting climate change, investing in rooftop solar panels is a tangible way to take action, to take charge of one’s carbon contributions, to take a step away from fossil fuels and towards an energy-just future.
What it is not praised for often enough is solar’s profitability as an investment. Here’s what fossil fuel corporations don’t want you to know: solar has officially become the cheapest form of energy in history. After decades of innovation and technological improvements, the average cost of electricity from solar panels across their lifetime is now significantly cheaper than electricity from any fossil fuel source.
The cost of energy generated from photovoltaics is $58 per megawatt hour, compared to $78/MWh for gas combined cycle, $122/MWh for coal, $180/MWh for nuclear, and a whopping $200/MWh for gas peaker plants, according to the Lazard Levelized Cost of Electricity 2025 report.
Since most utilities in the United States use a mix of fossil fuels and renewable energy, the cost of the electricity they provide is inherently higher than the cost of electricity received from solely solar power.
By installing solar panels on your home, you can guarantee that your electricity is coming from entirely renewable sources, ensuring you pay less per kilowatt hour to power your house.
The payback period for solar panels — the time it takes for the amount of money saved on utility bills to equal the upfront cost of your solar system — has dropped to an average of approximately 10 years across the United States. The expected lifespan of a rooftop solar installation is nearing 30 years. That equates more than two decades of energy you’re not paying for. (See glrea.org for a cost breakdown).
Residential energy generation becomes an even more attractive option in light of rapidly rising energy costs projected for the near future. Utility prices have already increased drastically over the last decade, with monthly electricity bills rising by a national average of 32% since 2014 and nearly doubling in some states.
Investor-owned utility companies operate with the primary goal of profit, and are very infrequently incentivized to make electricity costs more affordable for their customers. Many also have longstanding financial ties with the fossil fuel industry and continue to rely heavily on coal, oil, and natural gas in an outdated and economically inefficient model.
As renewable energy continues to excel, it will be increasingly expensive to keep fossil fuel power plants running; private utilities can be expected to continue increasing their prices accordingly, placing the burden on residents already struggling to pay bills.
Installing home solar allows one to avoid these incredibly high electricity bills by sourcing energy from their own rooftops.
Climate change also must be factored into the equation. A rooftop solar installation is already found to increase home value by an average of 6.8% across the U.S.; on top of that, multiple researchers have demonstrated that the value of home solar will increase as a result of anthropogenic climate change.
One study from the University of Michigan, led by Mai Shi, Ph.D., quantifies future household value of residential solar under multiple climate change scenarios.
The study used empirical cooling data to capture interactions between future value and household space cooling needs for over 2,000 households in 17 cities across the U.S. The study found that climate change increases the value of solar on a per-capacity basis for most households across all scenarios — even when generation decreases because of changes to solar irradiance — due to a greater revenue per unit.
Shi’s research indicates the economic value of residential solar is expected to increase by 5%-20% across a wide range of American cities over the next several decades, and the optimal number of solar panels per household system will also increase.
It is inevitable the effects of climate change will strain our energy infrastructure and further deplete our limited resources. Electricity demand will increase as families around the country deal with extreme temperatures, while physical components of the grid will likely be threatened by climate change-induced storms.
Home solar can keep you protected not only from price increases, but also from blackouts, keeping essential electronics running even if the grid is down.
As climate change intensifies across the planet, weather patterns and electricity supply are already becoming increasingly intense and unpredictable. We have the responsibility of mitigation, and the opportunity of adaptation. A just transition to clean energy aids in accomplishing both.
Not only does distributed solar capacity reduce greenhouse gas emissions to help slow climate disaster, but it also serves as a core component in building a new system that is inherently more efficient, equitable, and equipped to handle the challenges we will face.
Planet Detroit’s Voices column includes opinion pieces from our community of partners and readers. These pieces express the voices of the authors and not necessarily those of the publication.
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