How Long Does It Take To Recoup Your Investment
How long it takes to earn back your initial investment depends on how much you spend on your solar panel project. If you snag a system for under $11,000, it will take about seven years to recoup the cost. If your initial investment is closer to $26,000, it will take 12 years to break even. Once your solar panels have saved enough in energy costs to pay for themselves, all other savings are a bonus.
The Cons: Why You Should Use Great Caution
Here are the big reasons that you should not try to go it alone. Solar power is not your average DIY job, even though it is tempting to try. Here is why it makes sense to let a professional installer do it right. Lots of things can go very badly wrong.
Like electrocution, for starters.
Solar wiring is dangerous: it is very high voltage. Solar electricians dont just sit down with a one page instruction manual to know how to install your system safely. Nor should you.
Solar electricians first get an engineering or solar electricians degree, and are licensed with certification from NABCEP and state licensing showing that they can do a solar installation correctly so that they are safe during the installation and so you and your home are safe once your solar system begins operating.
Installing solar wiring can be dangerous.
This danger is another reason not to DIY, is that if your house is ever on fire, firefighters might be reluctant to get into contact with what might be a botched job on the safety features.
A professional installation will include the correctly installed ground-level-access fire safety switch that the utility has signed off on, that prevents any danger of electrocution to firefighters if they are up on the panels or the wiring.
If you live in one of these lawless states, where you can build anything without any kinds of permits then DIY solar is very tempting.
What Will Affect Your Solar Savings
We already mentioned some of the factors that will change how much you can save by going solar. But we thought it would be worth going into a bit more detail.
Here are some of their tips:
Review your utility bill to see how much energy you used last year and what it cost.
Evaluate how you use energy and whether or not you could make any reasonable reductions to your energy consumption.
Consider how long you plan on staying in your house.
Figure out what size of a system you would need to meet your needs.
Calculate the average number of direct sunlight hours your house is exposed to.
Calculate the pitch or angle of your roof.
Consider weather patterns which could affect your solar energy system.
Sounds like a lot of work, right? Well, it is. And how much any one of these factors will affect you and your home will be determined on a house-by-house basis.
Luckily, solar reps like those at Vivint Solar are experts in figuring out whether or not a solar energy system is right for you. Theyll let you know what they found and whether or not they would recommend you as a candidate for solar.
All you have to do is give us a call and let our representatives do the rest.
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Determine Your Return On Investment
Are solar panels worth it? Its time for the big payoff. To figure out how your solar investment compares against the cost of buying power from the utility, youll want to estimate your return on investment :
1. Subtract the lifetime cost of solar from the lifetime cost of utility power . The result is your return on investment the total amount youd save on energy bills over 25 years.
Example: $33,813 $16,117 = $17,696.
In this scenario, going solar would save you an estimated $17,696 over a 25-year period. Not too shabby!
Though solar is a significant investment upfront, it proves to be that solar is worth it in the long run. Over 25 years, going solar costs less than half what youd pay the utility to produce the same amount of energy.
Remember, this breakdown assumes that you hire an installer to complete your project. Many of our customers DIY their project which rapidly accelerates their payback period and makes solar panels an even better investment.
If you want to get the most bang for your buck, consider a DIY installation to put the maximum savings in your pocket. Use our solar ROI calculator to help you estimate your return.
A Money Printer On Your Roof
Solar is a clean and affordable way to generate electricity. With our price match guarantee, Tesla offers the lowest priced solar so homeowners can make money off of their system and put cash back in their pocket.
Energy produced by your Tesla solar panel system will directly power your home and reduce the amount of electricity you purchase from your utility. In addition, many utilities give you credit for any extra energy you produce during the day. This crediting process is referred to as Net Energy Metering .
You can reduce your utility electric bill as a result of your solar energy production and net metering credits. When financing a solar panel system with a loan, your monthly solar payment will typically be lower than the reduction on your utility bill.
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How Much Money Can Solar Panels Save You For Your Specific Home
One of the easiest ways to find out how much you can save with solar panels is by using our solar calculator. SolarReviews has the worlds first solar power calculator that shows the system size thats right for your home and what your return on investment could look like.
Estimate your solar savings
Our calculator provides savings estimates based on the following:
- Your location
- Your energy usage
- Current average price offered by solar companies in your area
We also outline what solar tax incentives and other rebates are available in your area that will help bring down the upfront cost of a solar power system.
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What Is Solar Energy
Solar energy is basically exactly what it says it isenergy provided by the sun, or more technically electromagnetic radiation from the suns rays. Solar electric systems, also referred to as photovoltaic, or PV systems, are designed to absorb the suns electromagnetic radiation through solar panels composed of semiconductor materials called solar cells. The radiation is converted into electricity and transferred throughout your home via a circuitry system. They are more effective in areas exposed to lots of sunlight but can be used in any geographic area that receives some amount of sun. Since sunlight is one of the few free things left on the planet, using it to power some, or all, of your home can be a great way to reduce your electric bill.
Save Money By Going Solar
Want to learn how to save money by adding solar power to your home or business? Beyond watching that monthly energy bill drop or even disappear, adding solar power is a home improvement that pays off. Once you know the true cost of going solar, it really makes sense. Read on to learn the benefits of going solar.
The use of solar technology has increased significantly over the past five years. Homeowners, businesses, and utility companies are going solar. According to the US Department of Energy Solar power is more affordable, accessible, and prevalent in the United States than ever beforeSince 2010, the average cost of solar PV panels has dropped more than 60%, and the cost of a solar electric system has dropped by about 50%.
It would be hard to overstate how impressive 2016 was for the solar industry, said Abigail Ross Hopper, Solar Energy Industry Association president and CEO. Prices dropped to all-time lows installations expanded in states across the country and job numbers soared. The bottom line is that more people are benefiting from solar now than at any point in the past, and while the market is changing, the broader trend over the next five years is going in one direction and thats up.
With the price of solar panels at an all time low, now is the time to save money by going solar.
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But You Might Be Surprised That One Of The Most Important Factors In Understanding If Solar Will Save You Money Isnt Related To The Sun At Allits About Mindset
Consider this quick illustration:
Imagine, for a moment…
What if you could cut a deal with your utility company?
Youd purchase all your energy for the next 20 years up front. In return, theyd give you a deala lower price.
And even as utility rates rose for your neighbors, even as inflation increased, youd hardly notice. Because each month, youd pay just a small fee for your utility meterabout the cost of a few pints of local beerto keep the energy youd already purchased flowing into your home.
How does that sound?
Your utility company won’t offer that to you.
Theyd lose money. That wouldnt work with their profit model.
But if that scenario sounded good, youre in luck. From a financial perspective, thats how switching to solar energy works: you buy future energy up frontso you can save month to month.
Only instead of finite fossil fuels, youll power up from the suns endless energy supply.
How Does Going Solar Save You Money
When considering going solar, one of the biggest advantages is saving money. On average, our solar systems pay for themselves within 4-7 years when purchased with cash. Homeowners that finance or lease their system can expect to see immediate savings on their electric bills, and save upwards of $100,000 over the life of their system.
With all the talk about saving money you may wonder how exactly this is accomplished. We spoke with Zack Lerman, resident solar expert, to better understand what happens behind the scenes to result in a $0 electric bill.
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The Amount Of Solar Energy Your System Will Produce
5kW systems are particularly popular. They produce a reasonable amount of energy and theyre not overly expensive to install or maintain. You also dont need an enormous roof. However, some people install systems as small as 3kW or 4kW, while others install systems as large as 15kW.
If you can afford it, and you have the roof size, then larger solar panel systems will save you more money in the long run, all things considered. The cost of installation per kWh goes down when youre installing more solar panels.
Q: What Are Solar Incentives And What Solar Incentives Are Available
A: To encourage homeowners to invest in solar, the federal government, New York State, and NYC offer financial incentives, rebates, and tax credits that make solar more affordable. Additional tax credits may be available to you on combined solar panel and storage systems. For most of our clients these incentives can cover up to 50% or more of the total system cost, which is a big deal!
A popular tax credit, known as the federal investment tax credit or ITC, allows you to deduct a portion of the cost of your solar system from the taxes. The ITC rate currently stands at 26%. One of the best incentives, however, is net metering.
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Affordable Solar For Everyone
Get instant approval on Blue Ravens BluePower Plus+ with a qualified credit score and receive 18 months of free solar power upfront.
Once approved we take care of all the normal upfront costs of sizing and designing your customized system, all the necessary paperwork & permits with your local city, and installing your solar panel system.
Are Solar Panels Worth It If Youre Not In The Sunny Southwest
Solar loves the sun, but you dont have to live in the sunny Southwest to achieve solar savings! In fact, solar systems can sometimes cost more in these areas because you need a larger system to cover your electricity needs due to air conditioning. Some of the states with the most installed solar in the country are in the Northeast even though theyre more famous for their cold snowy winters than their sunny summer days! These areas often have higher electricity costs and better local incentives than other states, leading to greater savings down the line.
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How To Save Money Going Solar
One of the biggest advantages of installing residential solar panels is a 30% federal tax credit on the total cost of a system. That means homeowners but not renters can subtract the credit from the federal income taxes they owe, in effect reducing the price of their solar purchase by nearly one-third.
Congress authorized the credit through 2019, but it will decline to 26% in 2020 and 22% in 2021 and then disappear. The credit could save the average homeowner $5,000 or more , according to EnergySage, a solar marketplace with a calculator to help estimate savings.
It may seem obvious, but access to sunlight is important. If your roof is deeply shaded by trees, mountains or buildings, solar panels wont work well. Unsurprisingly, California leads the nation in residential solar capacity, but some of the others in the top 10 may surprise you.
Its important to have a basic idea of how the panels work as well. Also known as photovoltaic panels, they are mounted on the roof of a house and use sunlight to produce electricity. An important part of any solar system is a box called an inverter, which often is installed in the garage and converts electricity produced by the panels into the kind thats required to operate home appliances .
Best Candidates For Solar Power
Solar panels tend to be a better investment for homeowners who meet the following criteria:
- You have ample exposure to sun: If you live in a part of the country that gets lots of exposure to sunlight throughout the year, then you’ll probably get more mileage out of your solar panels. It’s little wonder that solar power is most popular in places like Arizona, Texas, California and even North Carolina.
- You have accommodating roof space: A good solar system will require plenty of surface area on your roof, unobstructed by skylights, chimneys or other fixtures. With a smaller roof, you can still potentially install a system, but you’ll need to find the most efficient solar panels to maximize your limited space.
- Your electricity bills are high: The amount of money you save by going solar will be directly proportional to the amount you spend each month on electrical costs. So, if you live in a community where the price of electricity is pretty high, you stand to achieve greater savings when you go solar.
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It Starts With Your Mindset
Investing in solar is for future planners.
If youve got a sunny roof, your solar panels offset your electricity use pretty evenly, and your utility company offers a good net metering system, youre probably in good shape to save short term on your utility bills. Perhaps significantly. Many of our clients do. But still, the biggest financial gains are long-termtypically, 8-12 years down the roadwhen youve paid off your solar investment but your electricity is still mostly covered each month.
So before even looking at how sunny your roof is, ask yourself:
Are you thinking short-term right now? Like a robin digging for worms for breakfast?
Or are you in a long-term frame of mind, like when the same robin flies up high to find the perfect branch to build a nest?
Once your solar panels are up and running, what youll pay each month depends on several factors.
Homeowners tend to land in one of three categories.
Estimate How Long It Will Take To Pay Off Your Solar Panels
First, multiply your solar panel cost by 0.26, which is the tax credit you receive for installing your system. If you spend $20,000 on it initially, your tax credit is $5,200. That takes your initial investment down to $14,800.
Now, let’s factor in energy savings. Divide your initial investment by the $1,500 you typically pay the electric company per year that’s how long it’ll take for your savings to equal the amount you spend. Using the example above, you’d divide your initial investment of $14,800 by $1,500: The result is a payback period of just under 10 years.
That might seem like a long time on the surface, but solar panels can easily last 25 years.
You can further expedite your payback period by selling renewable energy certificates, or RECs. These are measured in megawatt hours of electricity that come from a renewable source. Electric companies must purchase some electricity from renewable sources, meaning you could save more by selling energy generated by your solar panels.
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