How Much Can You Save By Installing Solar Panels
You can reduce your power bill by up to 75% by switching to solar panels. In the US, residents usually spend between $100 and $200 per month on electricity, with an average annual energy expense of $1500.
A widespread myth is that solar panels can completely eliminate your electricity costs. They can’t, at least not yet. However, they can indeed cut your monthly electricity expenditure by a significant amount. Depending on how much you pay upfront, you can expect to break even in 7-10 years.
The Bottom Line: Are Solar Panels Worth It
Solar panels can be a beneficial investment for your home by saving you money long-term on the cost of electricity and increasing the value of your property. However, there are factors that you should consider before making the switch, including how much sunlight directly hits your house daily and the layout and direction of your roof. Residential solar systems in states that are, on average, sunnier will typically perform better, and south-, west- or southwest-facing roofs get more sun exposure.
You should also take a close look at your monthly electricity bill and compare it against your states average energy cost. Solar panels may be a good solution if you have consistently high payments or your cost is more expensive than in other areas of your state. On the other hand, you may not see enough cost savings to justify the expense of installing a home solar system if you have relatively low bills or can find ways to cut down electricity usage significantly.
Its also crucial to determine what incentives, if any, your state offers for solar energy, including a net metering program and tax credits. Remember that you can only take advantage of these incentives if you own your panels, either by paying for them outright or through a loan, so you need to consider whether your budget allows for a purchase rather than a lease. Fill out this online form to get quotes from top solar installers in your area.
Tesla Solar Roof Cost In Florida
An alternative to installing solar panels on your existing roof is to replace your roof with a Tesla solar roof. This is a blend of solar and inactive tiles that cover your entire home. It has a more subtle appearance with more curb appeal than the installation of solar panels on the roof. You cover the areas where the sun is more likely to hit with the solar tiles, and the areas of your roof that are in the shade in the inactive tiles. Since the tiles cover the entire roof, it has a more cohesive appearance than panels mounted on another material, which can be attractive.
Costs to install this roof type fluctuate tremendously, with new updates to the cost of the inactive tiles meaning their cost depends on your roofs complexity. The more complex your roof, the higher the cost. It is estimated that the average homeowner in Florida can spend between $35,000 and $70,000 on a 2,000 sq.ft. Tesla Solar roof. The variation in cost is because of the different layouts and difference in the solar versus inactive tiles and their positioning on the roof.
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Additional Components To The System
If youre looking to install additional components while installing the solar panels, this will increase your cost of equipment but can decrease the installation costs. Whether youre planning to install a solar battery storage system or additional features like pigeon proofing your panels, it is best to club them with installing the panels, so that you can decrease the installation cost.
How Much Does A Solar System Cost
Solar system cost is fairly consistent across markets, and consistently getting lower with time. That said, there are a number of variables that drive the cost of a commercial or residential rooftop solar system:
- What is your roof made of?
- Is your roof easy to get to?
- Does your roof have a lot of space?
- Do you want basic panels, high-efficiency panels, or something in between?
If you need to generate a lot of power but have limited space on your roof, you may need to pay a premium for a more efficient panel. Higher quality panels capture more energy from the same amount of sunlight.
The solar systems we install typically cost between $2.80 and $3.80 per Watt. Considering most residential systems run between 4 and 15 kW , were looking at about $11,000 on the low end, and $60,000 on the high end. Thats a big range, we know, but to be a little more specific, the large majority of home systems run between $20,000 and $30,000 . Many people consider solar system cost to be well worth it, not only because theyre sticking it to oil-exporting despots by buying less of their product, but because over its lifespan, a solar system will typically save you 2 1/2 times its cost in free energy. Read our Solar Cost/Benefit Analysis for more detail.
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What Size Solar Panel System Do You Need
The average home uses 905 kWh per month, or around 10,850 kWh per year, in electricity. That means that an average-sized home with a decent amount of sunshine could install a 5 kW to 6 kW solar panel system to help reduce utility bills.
You may want to learn about your sun number score for solar, which is calculated based on your homes location and average sunlight exposure. Also, explore the different solar panel dimensions and sizes with your contractor for more context.
The larger the solar panel system you install for your home, the lower the cost per watt will be. The cost per watt including solar panels, parts, labor costs, permits, and overhead is between $6 a watt and $8 a watt.
With solar panels, the money you save on your electricity bills can more than earn back your initial installation costs in seven to 20 years. Solar rebates and incentives when available from both the government and local energy providers can also help speed up your return on investment. You may also be able to participate in selling excess electricity from your solar panels a process known as net metering in your area.
Look For Solar Incentives
The government offers homeowners significant incentives for installing solar panels as an alternate energy source. For example, a residential federal tax credit allows taxpayers to claim 26% of installation costs for systems placed in service by Dec. 31, 2022. The credit dwindles to 22% in 2023 and expires starting in 2024, barring renewal from Congress.
The federal tax benefit is nonrefundable, meaning you cant get the savings in the form of a refund. Instead, you can reduce and possibly eliminate the amount you owe on your taxes.
Additional credits vary by location. Depending on your state, you may receive extra incentives like cash back, property tax exemption, waived fees and expedited permits. In some states, homeowners with solar panels can sell excess power to their local utility companies. Look up credits available in your state by reviewing the database of state incentives for renewables and efficiency.
But benefits aren’t guaranteed to last. “As solar is becoming cheaper, state and city governments and utilities continue to reduce the kind of incentives that are available,” Aggarwal says. “Incentives may actually go away and it may not actually pay to wait for too long.”
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System Panels And Equipment
The cost of your system is also dependent on the number of panels you need and the type of panels you select.
The average home solar system is 5kW, although larger homes may require a 6kW system. Assuming your system uses 250-watt photovoltaic panels, that equates to approximately 20 panels per home, at the cost of roughly $11,000. Of course, prices increase from that starting point for larger systems requiring more panels.
Home solar systems also typically require an inverter. Most solar companies will design your solar system with these components included, but selecting specific inverters or batteries, such as a Tesla Powerwall, may increase your overall cost.
Final Thoughts On Home Value Increase With Solar Panels
If youre considering installing solar and also contemplating a move in the next few years, do it.
Not only are you going to save a bunch of money on your electricity bills in the short term, when it comes to selling your home, you can expect your home solar panel installation cost to be more than recouped in full. You can also expect your home to sell faster.
After all, solar is a smart, sleek investment. When shopping for a home, why wouldnt potential buyers want a more energy efficient home?
Find out how much you can save with solar
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Compare Your Solar Options: Rooftop Vs Community Solar
Perhaps one of the most exciting aspects of the residential solar energy sector is the list of options for homeowners who want to go solar but do not have a suitable roof. Ground mount solar installations and community solar subscriptions are two common ways to access power from the sun without actually installing anything on your rooftop. Community solar involves connecting with members of a group or your neighborhood to share a solar system, while ground-mounted arrays are an easy way to own and install your own system while bypassing any roofing hurdles.
Labor Cost To Install Solar Panels In Florida
The labor cost to install solar panels in Florida can vary depending on the area, panel type, size, and location. The average cost range for installation is between $0.88 and $1.14 a watt, making the average cost of installation for a 6 kW system between $5,280 and $6,840. The costs include racking and balancing the panels and their installation. Larger panels can require more time to , while panels installed on a steep roof may cost more than panels installed on an array mounted on the ground. For this reason, you see a wide fluctuation in costs. Below is the average cost of labor based on the solar panel system size.
|$8,800 – $11,400|
What Adds Up The Cost Of Solar Power System For A 3000 Square Foot House
Here cost is calculated for installation of solar panels only. Other components of solar panel system will add up the cost while making this system work.
Moreover, if you live in a region with less than normal sunshine, you will need more panels for same KWh of energy which will result in adding up the cost. Maintenance cost will also increase the estimated budget.
If you go on adding some extra electronic appliance in your house, you will require system with more power and energy increasing your previously calculated cost.
Other Types Of Solar Loans
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 and longer repayment terms than personal loans, making your monthly payment lower.
Compare a quote from a solar company with other options to find the least expensive one.
Home equity loan
If you already know how much your solar panels will cost, you can apply for a fixed-rate home equity loan. These loans have lower rates and longer repayment terms than unsecured loans because putting up your home as collateral lowers the risk for a lender.
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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, and you often have the option to pay only interest during the initial portion of the loan. Unlike personal and home equity loans, HELOCs have variable rates.
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A cash-out refinance is a new mortgage thats larger than your current mortgage. You use the new loan to pay the old loan and cash out the difference to purchase solar panels. 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
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Should You Lease Solar Panels
There are several payment options that bundle solar installation costs into a consumers electric bill, either as a solar panel leasing option or as a power purchase agreement . Solar leases allow the homeowner to install solar panels without paying anything up front reducing the overall solar panel cost. After the panels are installed, the homeowner pays only a flat monthly fee. The fee includes the installation costs, which are spread out over time, and the cost of electricity supply.
The Cost Of Installing A Solar System
There are many incentives available for solar owners. These need to be considered when examining the cost of a solar system.
Those incentives include:
- Reduced monthly electric bills
- Protection from rising energy rates and independence from your utility company
- The 26% tax credit can be used to recover prior year taxes and also carried forward 20 years for businesses and 5 years for homeowners
- Businesses and farms can quickly recover their investment through accelerated depreciation. Those who qualify can apply for a USDA Reap Grant and other local grants
- Its sustainable and good for the environment
With that in mind, below weve listed the average installation cost for commercial and residential solar energy systems.
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How Does Net Metering Work
Simply put, if your home is able to take advantage of solar net metering, solar energy that is collected in abundance and not needed in your home will run through your meter and out to the grid.
A digital meter on your house records electricity moving in either direction as it comes into the house and as it leaves. The net part of the term means that the homeowner pays the net amount for the electricity used by the house minus the extra sold back to the grid.
In states where net metering is in effect, consumers can sell the excess solar energy they produce back to their local utility. That lowers their electricity bill, shortening their payback period and raising their cost savings.
According to Solar Reviews, homeowners in Delaware, New Hampshire, Oregon and Washington, D.C. can take the best advantage of net metering because of a combination of factors including policy, inclusion, fees and rollover policies.
Factors That Affect The Cost Of Solar Panels
Before a solar professional can give you a cost estimate to install panels on your home, theyll ask you many questions about your energy usage and what you want out of a system, if your aim is to reduce energy bills and be more eco-friendly for example. Then, theyll calculate that cost based on the following factors:
- Your geographic locationSolar panels and the labor to install them cost more in different regions.
- How much power you want to offset
- The size of your roof
- Your usage patterns
- The efficiency of the home
- The cost of the equipment
- If you wish to add a storage system
- Other expenses like permits, warranties, and municipal fees.
Most homeowners install solar panels on their homes to save money on their energy bills. And according to Jamie Haenggi, executive vice president and chief operating officer of ADT Solar , ‘most consumers save on par or less of their regular energy bills.’ However, how much homeowners save varies. ‘You can have neighbors with identical systems, and they will see different levels of savings on their bills,’ says Jayson Waller, founder and CEO of pink energy . ‘Usage patterns, the efficiency of the homes, the location of the panels, amount of shading, and even how much you entertain are all contributing factors.’
Other top reasons to consider installing solar panels on your home include:
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Studies Linking Solar And Property Value Increases
The Appraisal Journal cited researchers Ruth Johnson and David Kaserman who report, Home value increases of about $20 for every dollar saved on annual energy costs.
So, in the case of the $200 monthly savings example above, you could expect the value of that solar home to be worth $48,000more than it was previously .
For a second example,a study by the Lawrence Berkeley National Laboratory yields a formula of a $5,000 resale value increase for every kilowatt of solar installed. To get that same $48,000 home value increase from the Appraisers Journal with this calculation, youd need a 9.6kW system .
With average installation costs around $3,500 per kW upfront, you could have this size system installed for $33,600. That difference in value gained relative to your investment potentially nets you an arbitrage opportunity of $1,500 per kW of installed solar.
That doesnt even include the federal investment tax credit, which allows you to recover 26% of the cost of your home solar installation. Additionally, in some states, your property value increase is even exempt from additional property taxes.
If youre looking to sell your home faster and at a premium, it might be worth having solar installed first! You can expect a quick return on investment for this type of clean energy home improvement.
While that estimate is simple, theres a lot of unaccounted for variables. For example, it doesnt take into account the size of the solar energy system.