Will Solar Panels Affect The Value Of My Home
Don’t assume that solar PV installation will guarantee a comparable increase in the value of your property. In fact, the majority of estate agents we surveyed** think that having solar panels makes no difference to how much your home is worth.
Just 8% said they thought solar panels increased property value, and 17% said they decrease its value. But 67% of estate agent businesses told us that having solar panels makes no difference to the value of a property.
How To Calculate Solar Payback
At its simplest, solar panel payback is calculated by dividing the total cost of the system by the energy savings the system generates per year.
For example, if your high-quality 6.6kW system cost $8,200 to install and saves you $600 per quarter, then the payback is 3.4 years = 3.4)
But, how can you estimate the solar savings before your system is installed?
You need to drill down into more detail, including:
Where you live Your households energy consumption vs the size system you install Your feed-in tariff rate How much solar energy is self-consumed The quality of the equipment installed How the panels are positioned on your roof
As you can see, there are a few different variables in play.
But, theres something else to consider.
While payback can be a useful tool to work out solars break-even point, its a blunt instrument. It doesnt take into account the lifetime savings that your system generates. This is far more important than the short-term savings a system brings.
What About House Value
It is also worth pointing out that if you are a homeowner who is thinking of having solar panels installed, this can affect the value of the property. Clearly this has a bearing on the overall profitability of your solar panels.
There are a number of different issues you need to consider with the panels. For example, how old will they be when you sell the house? Very old panels could end up making no difference to the house price, or even contributing a negative. Brand new panels with a long lifespan should be a positive.
It can also be a case of how the panels affect the property aesthetically. Obvious panels are less sought-after than those hidden away behind the house.
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Calculating The Payback Period For Your Solar Energy System
Now that you understand the factors that influence the total costs and benefits of the installation, you can calculate your solar panel payback period.
To do so, follow these steps:
1. Calculate the total costs
Subtract the total value of all incentives and rebates from the total cost of your solar energy system.
2. Calculate your annual benefits
Add up all of the potential annual financial benefits, such as avoided electricity costs.
3. Subtract your total costs from your annual financial benefits.
This is the number of years it will take for your solar panels to pay for themselves. After this period, you will have passed the break even point. From here, you will be able to reap the full financial benefits of your solar panel system.
If youre just getting started with solar and want a ballpark estimate for an installation, use our Solar Calculator. It provides upfront costs and long-term savings estimates. For those looking for a quote, call 683-8835 to speak with one of our knowledgeable solar energy specialists!
How Much Youll Pay For Solar
The first step in calculating your solar payback period is to determine how much youll pay for solar. The cost you pay for your system is dependent upon the size of the system and the equipment that you select.
For the payback period calculation, its important to also consider what solar incentives, tax credits, and rebates youre eligible for, as well as the timing of those incentives: do you receive them upfront, in year one, or over ten years?
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Myth #: Solar Panels Are Not That Green
This myth gets stirred up every now and then, but is notbacked up by any tangible data. What thedata does show is that the emissions of solarpanels are far less than the emissions relating to coal or naturalgas energy.
The overall emissions seem greater than they are since solarpanels require all of their energy up-front. But when dispersed over 30 years of emission-free generation, they proveto be much cleaner than the common alternatives.
Even when the energy to mine, clean, process, andmanufacture the solar panels is taken into account, the overall emissionintensity is 3x to 10x less than traditional fossil fuels.
Besides the emissions benefits, solar panels have an energypayback period of about 2 to 3 years according to the U.S. Department of Energy. This is about 40%faster than a standard coal-fired power plant will pay back its energy.
No energy generation method is without its faults, there are many positiveand negative environmental impacts of solar power.
Key Takeaway: Solar panels produce far less emissions perkWh of energy than coal or natural gas and payback their energy faster thancoal or natural gas.
How Long Is The Solar Panels Payback Period
The payback period varies depending on the solar panel system. However, you can expect this period to range anywhere between 5 to 14 years in the USA. The average optimum range lies around the eight-year mark.
Despite this, solar panels tend to last nearly 30 years. Hence, you can get tremendous benefits after covering the initial cost.
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Frequently Asked Questions: Solar Panel Payback
What is the payback period for solar panels?
In the U.S., the payback period for solar panels is about eight years on average, but this can vary quite a bit from one homeowner to the next. In fact, your solar payback period may fall anywhere between five and 15 years.
Do solar panels really pay for themselves?
A well-designed and properly installed solar panel system will usually pay for itself, though it will take several years to reach this point. Beyond the break-even point, every month that you operate your solar system can be considered financial gain.
How much money do you get back from solar?
The federal tax credit will allow you to recoup 26% of your investment right off the bat. Additional savings can be obtained through local and state-level incentives, net metering programs, and savings on your month-to-month electric expenses.
How do you calculate the payback period for solar?
The basic formula for calculating a payback period for solar is to divide the cost of the system, including tax rebates and financial incentives, by the annual amount you’ll save on utility bills. This will give you the number of years required for you to “break even” with your solar panels.
Sunlight Conditions Change Too Rapidly Where You Live
The sun isnt always out so solar panels cant always provide energy even when you need it. This may lead to your system running out of power before the day is over, which will mean youll have little choice but to use the traditional electricity supply for a short time if theres no battery backup available.
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Solar Power For The Home: Benefits
A significant benefit to PV installation is a lower energy bill, but the magnitude of this benefit depends on the amount of solar energy that can be produced given the available conditions and the way in which utilities charge for electricity.
The first consideration is the solar irradiation levels available in the home’s geographical location. When it comes to using solar panels, being closer to the equator is generally better, but other factors must be considered. The National Renewable Energy Laboratory produces maps for the U.S. showing solar irradiation levels the tools on its website provide detailed solar information for specific locations within the U.S.
Similar maps and data are available in other countries as well, often from government environmental agencies or renewable energy organizations. Equally important is the home’s orientation for rooftop arrays, a south-facing roof without trees or other objects obstructing sunlight maximizes the available solar energy. If this is not available, panels can be mounted on external supports and installed away from the house, incurring additional costs for the extra hardware and cables.
The final benefit is the potential effect on a home’s value due to the addition of a solar array. In general, it is reasonable to assume that solar panels would raise the value of most homes.
Will Solar Panels Pay For Themselves
Yes, solar panels will be able to pay for themselves within their lifespan. However, the time it will take to reach the payback time or the earnings that can be obtained are deeply varied and site dependent. Below are the main factors that influence this timescale.
Factors such as solar panel costs, incentives, the type of solar panels, and your location influence the payback period of your system. Nevertheless, across the US it is possible to assure that the solar panels will pay for themselves in their lifetime no matter where they are located. Actually, by establishing an average in many states of the US, a solar panel system would be able to pay for itself between 9-12 years. If you are worried about the cost of installing solar panels initially, dont be, as a lot of solar companies throughout the USA will provide solar financing.
In order to estimate the payback times of solar panels, we must first understand how these factors affect the break-even point of a solar system.
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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What About Some Numbers
With this in mind, we are now interested in figuring out if investing in solar panels in the north of England is a good idea or not. This means if lower sunlight hours are significant enough to make the investment pointless or if solar panels will actually work well and thus pay for themselves in a few years.
Checking some numbers, we get to the expected results: cities in the south come out with the lowest payback years. While the national average is 9.5 years, it takes only 8.4 years in Plymouth, Exeter and Truro for a domestic solar panel installation to pay for itself. However, cities in the north are not as left behind as one would expect.
So, installing solar panels in the north remains a good deal! If you are interested in green energy, you can switch to solar energy and be proud of being a first mover in this area. Furthermore, as the government is concerned about reaching its green tariffs by 2020, there are many incentive programs that you can benefit from .
Fill in the contact form above to get your solar panel installed as fast as possible. GreenMatch will provide you with up to four free quotes, without any further obligation.
The Verdict: Is Solar Worth It
So, to answer the question, are solar panels worth it? In most cases, yes especially if you can connect to the grid and reduce the burden of energy storage costs, or if you need to provide power in a remote location.
DIY grid-tied systems pay for themselves in about 5 years on average, and contractors extend that window to 8 to 10 years. Considering panels are warrantied for 25 years, both options become a profitable investment in the long run.
Off-grid considerations are slightly different. Batteries add a significant up-front cost, and they will also need to be replaced over the life of the system. But it allows you to buy affordable, rural land and produce clean power where you need it.
System costs must be evaluated against other means of delivering energy to the property. Running power lines to your property can cost an estimated $20,000 for a half-mile run. Though battery storage is expensive, it may still be cheaper than the alternatives.
Calculating The Amount Of Monthly Savings On Energy
Its easy enough to compare the difference in your utility bills once you get started with your solar panels. Just take the current solar bill from the current month and compare it with your electric bill from the same month during the previous year . Simply subtract the difference to come up with your savings for that particular month. If you do this each month, you will get a good idea of how your savings will likely be projected by years end.
Working through an example is the best way to understand the payoff time with solar panels. Lets say the final cost of your system ends up at $8,100 . If you save $92 a month , you would break even at about 7.3 years. If you finance to own your solar panels, you will find yourself saving a lot of money on your energy bills for many years to come.
Theres a reason that you are noticing more solar panels within your neighborhood. More and more people are working out the math to realize that this is an option that will save them money in the long run. Once you work out the numbers related to your specific home, you may notice the same to be true for your situation as well.
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