Wednesday, June 19, 2024

How To Determine If Solar Panels Are Worth It

One More Important Thing To Know About Solar

One Year Solar Update! – Is Do it Yourself Solar worth it?

Some factors could increase your payback period. Before installing solar panels, you need to inspect the condition of your roof. Panels can last 25 years, so if your roof is not in tip-top shape, you might have to make improvements before installing solar panels. If this applies to you, make sure to add these costs to your initial investment.

Overall, solar power can be an expensive proposition, especially with the upfront costs. However, the long-term efficiency they provide can more than offset the initial investment, leading to savings for years to come.

Which Solar Brand Do You Choose

The solar brand you choose will have an impact on the overall cost of your solar panel system.

Below we have featured a table that breaks down the cost per watt for all of the solar manufacturers found in the United States.

Bear in mind, you may not need such a large solar system. It is very possible that all you need is a 2.5 kW solar system to offset your energy consumption.

We will help you figure out your homes individual solar panel requirements further down in the article.


Recommended Reading: How To Measure Sunlight For Solar Panels

Frequently Asked Questions About Solar Payback Periods

Does solar really pay off?

Yes, solar really does pay off! The average EnergySage shopper sees a solar payback period of 8.7 years so given that most solar systems will last at least 25-30 years, you can definitely expect your solar system to be worth the investment.

Will I still have an electricity bill with solar panels?

While you may not owe anything on your electricity bill, youll still receive an electricity bill from your utility company as long as youre still connected to the grid.

How much does solar save you each month?

According to the U.S. Energy Information Administration , the average electricity consumption of a U.S. household is 893 kWh. Data from the EIA show that the average cost of electricity in November 2021 was 14.12 cents in the U.S. Thus, assuming that your system covers 100% of your electricity needs, youll save $126 each month on avoided electricity costs, on average.

Also Check: How Does A Grid Tied Solar System Work

How Much Does A Solar Panel Cost

Prices have been coming down steadily over the years. The total cost will depend on how many kilowatts of power your array will generate. According to consumer reports, after solar tax credits are accounted for, the cost for a solar panel system on an average-sized house in the U.S. in 2021 ranges from $11,000 to $15,000.

A Few Final Things To Consider

Are Solar Panels Worth It? What You Need to Know

Solar panels offer many benefits, but they might not be practical in every instance with the high costs and red tape associated with installing them. Fortunately, there are other ways to receive the benefit of solar energy without the expense.

You can use portable solar chargers to power your cell phone and other electronics. They’re inexpensive to buy, and you’re not tethered to a wall while you wait for your device to charge.

Additionally, some areas use community solar. With community solar, multiple units and divide up the costs, saving you money on your energy bills without having to pay the entire price of solar panels.

Discover more about solar panels with these helpful guides.

Also Check: How Large Is A Solar Panel

What Is The Florida Solar Tax Credit

When people refer to the Florida solar tax credit, they actually mean the 26% solar tax credit, known formally as the federal investment tax credit .

This is actually a federal incentive available in all 50 states. It allows tax-paying homeowners to claim 26% of their solar systems cost as a deduction on their income taxes. In other words, the federal tax credit offers you a 26% discount on your solar system. If your tax liability is less than 26% of your solar systems cost, you can roll the remaining balance over to the next period for up to 10 years.

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.

Also Check: How Much Does Vivint Solar Cost Per Month

How Can You Estimate Your Solar Payback Period

The initial costs of solar panels are often the biggest consideration when going solar, leading many homeowners to question whether solar power is worth it. While most homeowners can expect their investment to pay off in under 10 years, you can get a more specific estimate with a few calculations. If you want to calculate a rough estimate for how long it will take for solar panels to pay for themselves, you can use this formula:

/ = estimated payoff period

Heres an example:

Your new solar system costs $15,000 and you received a tax credit for $3,900 in addition to a $1,500 rebate from your state. In this case, your gross solar system cost is $15,000 with the upfront incentives totalling $5,400. This means that your combined cost is $9,600.

Now, say that your power bill is $100 every month and your solar system produces enough energy to cover your energy needs. Your annual savings is your monthly power bill, multiplied by 12 months, meaning in the first year of having solar, youll save $1,200 on your electricity bills. Some states and utilities also provide incentives that pay you extra for the solar energy your panels generate, like SRECs or the SMART program in Massachusetts: its not uncommon for those incentives to put an additional $600 a year into your pocket beyond your electricity savings, meaning an annual benefit of $1,800.

Costs And Affordability: Dont Be Blinded By The Light

TWO YEAR Solar Update!! – Is Do it Yourself Solar Worth it?!

The main obstacle to the widespread use of solar panels in Québec is the substantial initial investment, combined with limited yearly savings. Here are a few examples of false promises made by some solar panel vendors in Québec and a few important points to keep in mind when deciding whether to go ahead with your project. Get informed!

Recommended Reading: Is Solar Worth The Cost

Wrap Up: Is Solar Worth It

Under the right conditions, solar is worth it for the average American homeowner in 2022. However, its not a one-size-fits all type of energy solution. Consider the following to assess if youre a good candidate for solar:

  • Access to sunlight: Does your roof have access to direct sunlight?
  • Roof fit for solar: Does your roof face south or west? Does it have enough room for at least 15 solar panels?
  • Existing electricity bills: If your bills are already below-average, a solar installation wont provide as much value.
  • Local policy: Does your state or utility offer a net metering program? If so, what is the buy-back rate?

Though these factors can help you get a good idea of whether solar is worth it, the best way to get an accurate estimate is through connecting a local solar company. A local provider can analyze your electricity patterns, use satellite imagery to draw up a model on your roof and provide resources on prices and financing options.

Are Solar Panels With Battery Storage Worth It

One of the downsides to solar panels is that you usually have to use energy immediately. In most cases, if you’re not actively using it, the power your PV system generates is lost. You can remedy that situation with solar batteries.

Solar battery storage works just like any other battery: you store any electricity you don’t use so that you can go back and use it later.

You don’t need to know the ins and outs of solar batteries to use them, but their complexity does affect you. A solar battery system can cost you roughly £4,000, which may almost double the cost of your solar panels. If you’re comfortable spending that much, though, it will help you save more money.

Solar batteries will enable you to use PV power at night, further lowering your energy bill. Similarly, they make it easier to sell any energy you don’t use back to the grid. Keep in mind, though, that the added initial cost will mean it will take longer to make a return on investment.

Recommended Reading: Where To Open A Solo 401k

Compare This To The Cost Of Solar

Solar power only costs around 5 to 6 cents a kWh to produce, making it a no-brainer to run as much of your home as possible off solar power. So yes, solar power is worth it!

Solar power is fed into the home to be used as it is generated, so by using solar power, you are not buying power from the grid.

If you dont use the solar power as it is generated it is fed off to the grid and you will get paid a small amount for this from your energy retailer. Typically you will get around $10-$30 a quarter as a credit on your bill, and the smaller the credit the better as this means you are using most of your solar power as it is generated. For more information on this please read how solar power reduces your power bill.

To work out how much power you use during the day, simply read your meter in the morning and then again at night. Subtract one number from the other and it will tell you exactly how much power you have used during the hours . Detailed information on accurately sizing up a solar system.

With solar battery storage now available, it is also possible to further reduce your power bill and run your house almost entirely off solar power. Solar batteries store power that would otherwise be sent to the grid to be used in the evening. Click here for more information about solar battery storage.

System Size

Youre Not Eligible For Incentives And Rebates

Is Installing Solar Panels Worth It? What You Need to Know

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 some 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

Don’t Miss: How Much Will I Save With Solar

Solar Panels Require The Right Environment

Your roof is a vital consideration when considering solar panels. If there is too much shade from trees or nearby buildings, it will not receive the adequate sunlight needed to harness power.

You also want to consider potential regulations in your neighborhood. If you live in an area with a homeowner’s association, you need to seek approval before installing a system. And it is not a guarantee they will allow you to have one. If you don’t have an HOA, you still should check with your city, as many require permits before work begins.

Here Are The Top Takeaways:

Dont fixate on latitude and weather conditions where you live: utility rates and incentive programs can make a huge difference, making solar profitable in many northern locations that arent sunny year round.

Determining the cost per kilowatt-hour at your location is a bit tedious, but only an apples-to-apples comparison can give you the answer you need .

When it comes to solar power, think like an investor, not as a utility customer. You have to look at the cost/savings over the lifetime of your solar panels.

A solar lease may look like a good option for going solar, but in all likelihood, a solar loan is an even better option.

It’s never too late to start charting your solar strategy.

Also Check: How Much Is A 5kw Solar System

Picking A Solar Energy Provider: How Do I Choose The Right Installer

Your installer is one of the most important factors of your solar installation! When you choose a solar installer, you should review their certifications, licenses, track record and reputation in the market. You should also be aware that a recent report by the U.S. National Renewable Energy Laboratory revealed that large national solar companies charge more than their small counterparts for the same or lesser quality equipment. The recommendation from NRELs report: shop around and consider local companies.

A great installer, like those on the EnergySage Solar Marketplace, will also use subcontractors sparingly and warranty their workmanship. Most importantly, a good installer will be an effective partner ready to help you go solar. All of the installers you meet on EnergySage have been pre-vetted and meet our standards for all these variables. Whichever installer you use, dont be afraid to ask questions throughout the installation process.

This post originally appeared on Mother Earth News.

How Much Do Solar Panels Cost For Homes

4 Year Update – Are Solar Panels for Home Still Worth It?

On average, solar panel installation and the system together can run between $15,000 and $25,000, according to the latest information from the Center for Sustainable Energy.

Location largely affects electricity rates. The national average is about 14 cents per kilowatt-hour, according to year-to-date 2022 data from the U.S. Energy Information Administration.

Before you make the leap, learn how your electric bill, location and incentives can impact your wallet over time. Here are six steps to take to determine whether youll save more than you spend on solar panels.

» MORE: Find ways to save with NerdWallet

Also Check: How To Install Solar Lights

Is Solar Energy Worth It From An Environmental Conservation Standpoint

Is solar worth the investment if one of your main goals is to be a good citizen of the planet? Absolutely! Solar panels derive clean, renewable energy straight from the sun, making using solar power an excellent way to reduce our reliance on fossil fuels and other limited resources. Here is a collection of resources exploring the benefits of solar energy to the planet, the economy, and your household:

Which Solar Panels Are Best For Home

There are many ways to rank the best solar panels, including by value, efficiency, and performance. These brands tend to have the best overall solar panels:

You can read our expert summary and justifications for the ranking of top solar panel manufacturers in 2021 on our best solar panel brands expert reviews page.

Recommended Reading: Is It Good To Get Solar Panels

Are Residential Solar Panels Worth It In 2021

With the 26% federal tax credit reducing at the end of 2022, millions of American homeowners are asking themselves whether or not installing solar panels is worth it.

The answer depends on many factors including where you live, how much roof space you have, if your roof is shaded, how much power you use, what your local utility charges you for electricity, and the prices offered by local solar companies.

Our solar panels cost and savings calculator takes all of these factors into account when calculating the payback period and investment return for your specific home.

You can either dive straight into our calculator and get an accurate estimate of how much a solar installation can save you, or you can read on to get a closer look at how to determine if solar is worth it for your home.

When Solar Panel Installation Isnt Worth It:

How Many Solar Panels Do You Need
  • You already have low electricity bills
  • There are no incentives in your area
  • Your roof is very shaded
  • Thereâs nowhere to mount solar panels
  • You want to move or sell your home soon

If any of the above is true for you, solar panels may not be worth the cost. Particularly if your home experiences a lot of shade from trees or other buildings, they won’t be able to generate enough energy to offset the cost of installation.

Read Also: How Much Sun Needed For Solar Panels

What Criteria Should I Use When Selecting A Solar Panel

You can evaluate solar panels on a few main parameters: production, durability and manufacturer quality.

The amount of electricity a given solar panel can produce will produce is dependent on several factors, including the power rating, power tolerance, efficiency and temperature coefficient. Taken together, these factors will tell you how much power your panel will be able to produce.

Youll also want to look at indicators of panel manufacturer quality. Start with the warrantees and assurances that the manufacturer offers on their equipment. Like all things, solar panels degrade and become less efficient over time. Many manufacturers will guarantee that the power production of their panels doesnt fall below a certain threshold over twenty-five years. In addition, many panel manufacturers have a materials warranty in case the panels simply fail.

Most solar panels are very durable, but if you live in an area that has heavy snow or high wind, you should also be sure that the panels you install are designed to withstand the conditions in your area. Look for panels that meet the IEC 61215, a reliability standard established by the International Electrotechnical Commission . IEC 61215 uses an accelerated outdoor stress test for panels to ensure their durability.

Popular Articles
Related news