Wednesday, July 17, 2024

Do You Actually Save Money With Solar Panels

Do Solar Panels Really Save You Money

Buying solar panels: Is the investment worth it?

The straightforward response to the question do solar panels truly save you money? is yes. Having said that, the amount youll save is determined by a variety of circumstances. The number of direct hours of daily sunshine, as well as the size and angle of your roof, are all crucial factors in deciding how much solar can save you.

With so many trendy investment opportunities available today, its easy to be skeptical of new products that promise to save you tons of money. Solar panels are no exception saving money by lowering your electric bill is one of the main appeals and selling points for solar as a product and home upgrade.

Electrical Appliances That Consumes A Lot Of Power

Certain home equipment takes a lot of energy. You can switch some for energy-saving alternatives while keeping in mind that the amount of electricity they require may be sufficient for other products. This way, you may be more conscious of your consumption and perhaps save money.

Refrigerator Having a fridge at home is vital to keep food and produce fresh, but it typically consumes a lot of energy because it is switched on 24 hours a day, seven days a week. The average usage of a 16-cu. ft. refrigerator consumes 1,200 watt-hours every day. Choose a size that is appropriate for your familys requirements and keep it a few inches away from the wall for adequate ventilation.

Water heater Warm baths are quite pleasant, but if you enjoy taking long showers, keep in mind that a water heater may burn 4,500 watt-hours each day. While its fine to splurge every now and then, being conscious of your shower time might help you save money on both your electric and water bills.

Air conditioner While an air conditioner is a must-have during the summer months, it is also one of the most often abused equipment. The type of air conditioner, the size of the space youre cooling, and the length of time its running are all variables that contribute to a larger power cost. Set timers if feasible to keep track of your consumption.

How Much Will I Save

There are set-up costs for installing a solar system, so households that use a lot of power will benefit more initially, as their savings will more quickly pay off the investment cost.

However, solar can be effectively generated and used by any type of household so you can start saving money straight away.

Individual results will vary but our customers regularly save 50% and more off their power bill. And some savvy users have even saved up to 90% over the summer months, by making their home as energy efficient as possible.

Read Also: Do I Qualify For Solar Tax Credit

Youre Not Eligible For Incentives And Rebates

When it comes to solar power, government incentives and rebates are extremely important.

The most important of these is the solar Investment Tax Credit , which is offered by the federal government and has helped grow the solar industry by 10,000% since its enactment in 2006. The ITC is currently worth 26% you can use it to save over a quarter of the price of your solar system. This incentive can play a huge role in improving the payback period of a solar system purchase.

Additional incentives are usually available at the state level, and sometimes at the local level, as well. Right now, 38 states offer net metering, a valuable incentive that allows you to sell your electricity to the utility company at retail rates, while other states, such as New York, offer state tax credits worth thousands of dollars.

But if youre in a situation where you dont qualify for incentives the federal tax credit, for instance, only applies if you pay federal taxes to begin with then solar energy may not be right for you.

Learn more: Find out which solar incentives and rebates you qualify for

Why Solar Panels Are A Bad Investment

Do Solar Panels Really Save You Money? [YES]

The first and most obvious reason a solar energy system could be a bad investment for some people is the cost of initial settlement. The cost ranges anywhere between a few hundred dollars for small installations such as pool heating, RV rig, or hunting shelter up to several thousand dollars to fully install a home.

Is the sun a bad investment? Are solar panels a good investment for you? Solar panels can save you money on electricity by adding value to your home, but they are not suitable for everyone. Ultimately, sunglasses can be a solid investment and save you a lot of money in the long run.

Read Also: How To Save Solar Energy

Estimate Residential Solar Panel Cost

The brunt of the expense with solar panels is in installation and the purchase of the actual panels.

» MORE: Compare solar loans and apply

Minimal long-term expenses can make up for the upfront costs. Most systems dont require much maintenance and are designed to last for 20 years or more with little change to the amount of electricity produced, Nilsen says.

When calculating the total price, consider how much energy you regularly consume your usage is listed on your monthly utility bill and what size system will generate the amount needed. Some tools, like the SolarReviews calculator, estimate the system size for you.

With installation, an average residential 5kW size system costs between $3 and $5 per watt, according to the CSE, which results in the $15,000 to $25,000 range. That cost is before any tax credits and incentives.

If you know your current energy usage, you can calculate how much youll need to pay for solar panels.

» MORE: Calculate your monthly payments on a solar loan

Then comparison shop for solar panels as you would other big-ticket items, such as a car or TV, says Vikram Aggarwal, CEO of the solar marketplace EnergySage. Some companies lower installation costs through rebates and other programs.

Aggarwal recommends getting quotes from three to five contractors. EnergySage compiles solar companies customer reviews, certifications, Better Business Bureau profiles and other information to help you find reputable providers.

Keep An Eye On Trade Policy

Changes in government trade policy also impact prices. In January 2018, President Trump imposed a four-year tariff on imported solar cells and panels that started at 30% and was set to drop 5% each year until February 2022. In 2020, the tariff rate for the fourth year was raised from 15% to 18%. The tariff resulted in a 16 cent per watt increase for the average consumer in 2018, which translated to an overall increase of $960 for a six-kW system, according to EnergySage.

The cost of foreign-manufactured panels may still drop, lessening the tariffs effect over time.

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Your Roof Isnt Suitable For Solar Panels

When solar panels are installed on homes, they are nearly always on the roof. This is because the roof has the two necessary ingredients to host solar panels: surface space , and sun exposure .

But what if you dont have a roof to call your own, or you have a roof but it just isnt up to the job? Here are all the factors that could either prevent a successful solar installation or make it uneconomic:

Yes Your Solar Panels Can Make You Money Find Out When And How

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Find out how long it will take for your solar panels to start making you money.

How many years will it take before your solar panels start making you money?

Solar panel installations are expected to increase by 30% in 2021, according to research firm IHS Markit. But before you decide to invest in solar for your home, it’s important to understand how long it will take to pay off the initial cost.

Residential solar electric systems cost an average of $20,000 between the panels, other related hardware, labor and more, although that number can fluctuate dramatically depending on location and the number of panels. So how long does it take to break even on that initial investment before you can start saving money for real? We’ll show you how to estimate the payback period for solar panels.

Read more: 5 things to consider before you buy solar panels

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What Are The Disadvantages Of Solar Panels

Since we discuss the advantages of solar panels, it is only fair we also include the disadvantages. The main disadvantages of solar panels are the upfront costs, the weather dependency, and the fact that they take up a lot of space. Let us take a deeper dive into these three main disadvantages:

  • Upfront costs: Covering the solar panels, inverter, batteries, wiring, and a professional installation is not cheap. Many people take on a personal loan or a home equity line of credit to pay for these costs. However, it is essential to note that you will recoup 100 percent of your investment and eventually turn a profit by reducing and/or eliminating your monthly electric bill.
  • Weather dependency: The time your solar panels are the most productive is limited. Most places only have a few hours of peak sunlight hours, and if it is raining, cloudy, or snowing, you may notice a sizable difference in solar energy capacity.
  • Takes up a lot of space: Solar panels take up a considerable amount of space, and if you want to install an extensive solar system, your roof may not be large enough to accommodate all the solar panels.

From these three main disadvantages, the one that seems to get most peoples attention is the upfront costs. As solar energy and solar installations become less expensive, this will help persuade more people to become energy independent through solar technology.

Impact Of Solar Panels On Property Value

These factors can all have an impact, too:

  • the age of the solar panels
  • whether theyre owned by a company rather than the homeowner
  • their effect on the appearance of the property.

Also, remember that the system’s inverter might need changing over the 25-year period and that, over time, the panels will reduce in efficiency. These factors need to be considered if you invest in solar PV and want to sell your home later on.

If youre buying a property with solar panels installed, its worth getting a surveyor to check them.

We’ve spoken to solar panel experts and solar panel owners for their top tips onMake the most of your solar panels.

**NAEA Propertymark surveyed 1,252 estate agent businesses for Which? in June 2017.

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A Home Solar System Is Really That Good As We Think

To save money and energy, everyone prefers to get solar power. They believe solar power is both good for saving the environment and the cost as well. Proper using and maintaining it according to the specification, everyone can enjoy this system.

Sometimes it can go wrong and the question arises, do you still have an electric bill with solar panels? Few aspects make the use of solar power difficult which causes higher electricity bills.

You need to keep in mind the electric rate, energy production, and consumption as well. To reduce the electricity bill and keep it in your grip, you must know another important fact and that is the billing method.

Make yourself knowledgeable by knowing the billing method of the local utility company. Knowing everything about solar panels helps the owner to make a perfect plan.

Other Types Of Solar Loans

Do You Really Save Money With Solar Panels?

In-house financing

Some solar companies offer financing through third-party lenders. These loans can be similar to home improvement loans unsecured with no down payment required. The payment plans could have lower rates than personal loans and longer repayment terms, making your monthly payment lower.

Compare a quote from your solar company with other options to find the most affordable one.

Home equity loan

If you already know how much your solar panels will cost, you can apply for a home equity loan. These loans have lower rates and longer repayment terms than unsecured loans because putting up your home as collateral reduces some of the risk for a lender.

Home equity line of credit

A HELOC is another low-rate option that is secured by your home. Its more flexible than a home equity loan because you can draw on funds as you need them for the project, and you often have the option to only pay interest during the initial portion of the loan.

If youre considering a home-equity option, learn the pros and cons of each before you choose.

Cash-out refinance

A cash-out refinance can get you a new mortgage at a lower rate that includes the cost of solar panels and installation. Its a good option if current mortgage rates are lower than what youre paying and if you can keep closing costs low.

Leasing or getting a power purchase agreement

The U.S. Department of Energy has more details about the difference between a lease and power purchase agreement.

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What About Loans Versus Up Front Cash

Conventional wisdom says youll save more with a cash purchase.

Often, thats true.

But say youre ready to go solar… only you dont have that cash right now?

Or what if solar isnt the best use for those particular funds?

Its likely a solar loan will be a little more per month than your utility bill was. Look at it like a hedge against rising utilty rates . So while your neighbors utility bills get higher and higherwhile youre paying your system off, youre locked into one monthly fee you can safely plan for.

For a while, youve just shifted paying your monthly energy bill to your bank instead of your utility company.

So without spending your own money up front … your month to month bills have stayed roughly the same, or risen a little due to the loan payment being slightly higher$20 seems to be an average number for our homeowners who go solar with a loan.

The best part?

Those payments end once youve paid for your solar energy system. So while the rest of your neighbors are still paying their utility bills month after month, youve got extra funds each month for good wine, weekend trips, or who knows, maybe finally getting that electric car.

Interested in seeing whether a solar loan versus cash would make more sense for you?

Both are popular choices. We crunch all the numbersso you can get a clear picture of what makes most sense for you.

Investigating Whether Solar Panels Actually Save You Money On Your Energy Bills

Solar panels can be costly to install, leaving some homeowners wondering, do solar panels save money? Over the long term or maybe even short term, solar panels should pay for themself and save you money. In addition, they are environmentally friendly. When calculating the cost and savings that solar panels offer, you should consider tax rebates and other incentives. So, how much money do solar panels save? Keep reading to find out.

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You Really Can Save Money With Solar Panels

Solar panels can seem like an ideal energy solution. Once the system is in place, you may be able to kiss your electric bill goodbye. In some cases, you can even send excess energy back to the grid, allowing you to make money from your solar panel system. However, installing solar panels is expensive. On average, homeowners pay about $23,500 to install a system.

Even with the federal investment tax credit which is worth 26 percent of the installation cost in 2020 and 22 percent in 2021 and various state or local rebates, theres usually still a big deficit. If you are wondering, do solar panels really save you money, the answer is often yes. Heres how.

How Much Can Solar Panels Reduce Your Carbon Footprint

Solar Power Myths: Can you save money by going off-grid?

Financial returns are a major incentive for leveraging renewable energy, but money isnt the only thing that solar panels save. When you install solar, youre also improving the environment and reducing greenhouse gas emissions. Thats why the question How much can solar panels save? can be answered two ways: how much money solar can save and how much CO2it can save .

The Environmental Protection Agency provides a formula to help you calculate how various green practices result in carbon emissions reductions. The below table converts solar power energy production into greenhouse gas offsets using the metric converters 7.44 × 10-4 metric tons CO2 / kWh of energy produced and the national average for solar panel production ratio, 1.42 kWh / watt of power.

CO2 Reductions by Solar System Size

System size
21,300 15.8

A good comparison point to use when thinking about carbon emissions is that a typical vehicle emits 4.7 metric tons of carbon dioxide every year. This means that a 6 kW solar panel system comfortably offsets the emissions produced by one fossil fuel automobile in a year. In addition to significant bill savings, a solar system comes with the satisfaction of taking a car off the road, so to speak.

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You Need To Know How Much You Pay On Your Electric Bill

This estimate assumes you will get all of your power from solar. While some homes will be able to get 100% of their electricity from solar, or even sell some surplus energy back to the grid, others will still have an electric bill to supplement usage. This will vary widely from home to home, depending on how many solar panels are installed, normal energy consumption and more. Get more tools to calculate your home’s potential savings here.

Now you have a sense of how much energy you’ll save, login to your electric utility company account and calculate an average of your last several electricity bills. Go back at least six months, if possible, to account for seasonal temperature changes and other fluctuations in cost. Let’s assume you get 100% of your usage from the panels and currently pay an average of $125 per month in electricity bills, or $1,500 per year. Now you have the information you need to estimate the payback period for solar panels.

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