The Pros and Cons of Solar Energy

Weigh the major factors to determine if solar is right for you.

Solar panels on rooftops in South Australia
One in four homes in Australia has rooftop solar. Andrey Moisseyev / Getty Images.

Once an expensive and minute portion of energy generation around the world, solar electricity has boomed over the past decade. Growing demand for solar energy is in part due to its proven success: Photovoltaic (PV) cells inside solar panels convert the sun's electromagnetic radiation into electricity, which they can either send into a home or into the electricity grid. This process is seen as a promising and crucial tool in developing a sustainable energy system.

But for many, questions remain: Is it worth the cost, in both economic and environmental terms? What is holding solar back from widespread adoption? This article addresses the most significant strengths and weaknesses of solar energy, and how people can decide whether switching to solar is right for them.

Pros Cons
More affordable than ever High upfront costs
Incentives from the government increase affordability Dependent upon sun exposure
Low maintenance after solar panel installation Not ideal for all living situations
Zero emissions from solar energy Carbon emissions from solar panel production

Pros of Solar Energy

For both individual home owners and developers of utility-scale power plants, solar energy is the lowest-cost energy in almost every part of the world. Government incentives make it even more attractive as an investment. Once installed, its near-zero operating and maintenance costs mean it is displacing fossil fuels like coal and natural gas. And its zero emissions and renewable fuel source (the sun) can reduce air pollution and the emission of the greenhouse gases that cause climate change.

Affordability

Solar is now the cheapest form of electricity in almost every part of the world. Solar electricity costs dropped by 90% between 2009 and 2020, and it is now cheaper to build a new utility-scale solar power plant than it is to keep an existing coal power plant running. And with rising demand for solar energy and increases in the scale of production, solar power is expected to follow the so-called Swanson's Law, which states that the cost of solar panels decreases by 20% with every doubling of their production. In 2010, one kilowatt-hour of solar electricity cost around 37 cents. By 2030, it is projected to cost 2 cents — and by 2050, one-half of one cent.

Most of the cost of solar energy is in the installation, but since sunshine is free, "solar resources generally produce zero (or even negative) marginal cost energy.” Marginal cost is the cost required to produce one additional unit of a product. Managers of electricity grids often purchase electricity from suppliers based on marginal cost, which is why solar energy often out-competes coal in energy markets. While coal generated 45% of energy in the United States in 2010, a decade later that share was down to 19%.

Government Incentives

Federal tax credits allow homeowners to deduct a percentage of the cost of installing solar panels from their annual income tax burden. As of early 2021, that credit was 26% of the cost of a solar PV system. State incentives also exist, depending on the state, and electric utilities also may offer rebates which are excluded from income taxes. Owners of solar PV systems can also receive payments for renewable energy certificates (RECs), which utilities or other corporations may purchase to offset their carbon emissions. Federal tax credits also apply to homeowners for installing storage batteries at home to store the energy produced by their solar panels.

Low Maintenance

Once installed, maintenance of solar panels is minimal, which is one reason why solar's marginal cost is so low. Rain cleans most solar panels. And while snow can cover solar panels and impede energy conversion, snow melts off the panels' sloped glass relatively quickly, and the albedo (reflected light) off of a snowy roof or field increases the solar radiation that panels can collect. Solar inverters, which convert the DC electricity that the panels produce into the AC electricity that gets sent into homes and onto the grid, last between 10 and 15 years before they need replacing. The panels themselves are often guaranteed by manufacturers to have a lifespan of 25 years, as they have no moving parts. Solar panels decline in efficiency at a rate of about 0.5% per year. Even if the degradation rate was double that, solar panels would still operate at 74% after 30 years.

Zero Emissions

According to the U.S. Department of Energy's National Renewable Energy Laboratory (NREL), a rooftop solar system that provided all of an average household's electricity needs over the lifetime of the system can prevent 200 tons of carbon dioxide from being released into the atmosphere. That's the equivalent of taking four gas-powered vehicles off the road every year, or 54,000 fewer miles driven every year.

While the manufacturing and final disposal of solar panels does come at an environmental cost, the solar energy industry is not subject to environmental disasters involving massive loss of life and cleanup costs. There is no such thing as solar spills, solar blowouts, solar well fires, solar meltdowns, solar mine cave-ins, solar pipeline explosions, solar runoff, solar tanker collisions, solar train derailments, or solar refinery leaks. Indeed, as a result of solar energy helping reduce the reliance on coal, carbon emissions from coal in the electricity sector have declined by more than 50% over the same period.

Cons of Solar Energy

Despite being the least expensive form of energy today, hurdles remain to the widespread adoption of solar energy. As mentioned above, the solar industry has grown ten-fold in the past decade, yet it still represents less than 5% of the world's electricity generation. Solar energy is inherently variable, it can be expensive, and the initial production and ultimate disposal of solar panels can have high environmental costs. The barriers to solar energy are coming down, but progress still needs to be made for solar to fulfill its promise of supplying truly sustainable energy.

High Upfront Costs

Despite cost drops — residential solar systems have dropped by almost two-thirds since 2010, according to the International Energy Agency — installing solar panels on a home is still expensive, given that much of the cost of installation is for labor and hardware. While federal and state tax credits can significantly cut the upfront costs of a solar system, lower-income consumers may not owe enough in taxes in order to take advantage of those credits. Of course, one must own property upon which to install panels, which excludes many renters. Community solar programs allow solar customers to either spread the upfront cost between many members of a solar farm or subscribe on a monthly basis to a community solar provider with no upfront costs at all.

Foot-Dragging Among Utilities

Another barrier is high capital costs that impact utilities' sometimes slow embrace of solar energy, which can lead to customers facing unanticipated obstacles and delays. The nation's century-old grid was built to flow electricity in one direction — from utilities to consumers. In the long run, adding solar to the grid stabilizes it and lowers electricity costs, but the upfront costs for grid modernization are substantial, and delays in connecting new customers can occur.

Variability Based on Sun Exposure

It should come as a surprise to no one that the sun doesn't shine at night, that some days are cloudy, and that winter days are shorter than summer ones. Solar energy is inherently variable and not always available when it is needed. As solar energy becomes a larger and larger part of the world's electricity supply, grid planners and managers need to find creative ways to integrate variable renewable electricity into the power system. They rely on highly detailed weather forecasts to be able to predict how much energy will be available in the coming days and hours, which makes solar energy more predictable. Expanding the geographic range of a grid also allows grid managers to draw electricity from areas and time zones where the sun is shining and deliver it to areas where it is not.

Increasingly, grid managers and home owners can store their solar-generated electricity into large batteries to help smooth out solar's variability. New grid-scale batteries continue to set records for the largest battery in the world. In March 2021, Apple announced it was constructing a battery capable of storing 240 megawatt-hours of energy generated by its solar farm in California. That's enough energy to power over 7,000 homes for one day. 

At the end of 2019, 28% of new solar installations were paired with a battery. Energy storage in one form or another is a leading solution to integrating variable renewable energy sources like wind and solar, but the storage industry is perhaps a decade behind the solar industry in terms of developing a mature technology with agreed-upon industry standards and scalable manufacturing.

Immovability

If you move, it's unlikely that you'll be able to take your solar panels with you. Investing in solar is usually a long-term commitment, and it can take 7 to 10 years for an owner's initial investment to pay itself back. This presents obstacles for people whose living arrangements are more mobile, such as renters, or for homeowners with rooftop solar who decide to sell their home. Solar panels can add value to a home, according to Zillow Research, yet not all potential home buyers want solar panels on their next home, or are even knowledgeable about how to negotiate their purchase.

Environmental Impacts

While solar panels emit zero greenhouse gas emissions as they produce electricity for consumers, the production and disposal of those panels do have environmental impacts that need to be addressed. These include the extraction of raw materials, the production of wastewater and hazardous waste during manufacturing, land-use issues in the siting of solar arrays, and the recycling of panels no longer in use. By 2050, the International Renewable Energy Agency (IRENA) estimates that 6 million metric tons of solar e-waste will be produced annually.

Recent attempts to address these challenges include efforts by the Green Electronics Council to raise sustainability standards by creating “EPEAT ecolabels” for solar PV modules and inverters; laws in the European Union, Washington State, and elsewhere requiring the proper recycling of solar panels; changes in manufacturing process that reduce the amount and toxicity of waste materials; increasing the traceability of materials and practices in the entire solar supply chain; and co-location practices that integrate agriculture and solar panels rather than panels eliminating valuable agricultural land.

Is Solar Right for You?

Investing in solar energy may be the second-largest investment in your lifetime, after purchasing a home. It can be as expensive as purchasing a new vehicle, yet last years longer and be much less familiar. Knowing the pros and cons means less sticker shock and fewer surprises when speaking with a solar installer. It also pays to shop around, as costs and options can vary. Fortunately, there are many different ways of going solar, and the long-term economics are in your favor.

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