The Cost Of Solar Panel Installation
Solar does have a lot of benefits to offer. However, it isnt exactly a cheap investment. According to EnergySage, the average cost of solar panels in Florida is $2.46 per watt. The total cost of a 6kW solar panel system may range from $12,900 to $16,500.
There are several factors that contribute to the overall cost of solar panel installation. Here are some of them:
- Equipment such as solar inverters
- Location for installation
- Labor and contractor of your choice
Thankfully, the government offers incentives and possible tax credits for homeowners who choose to switch to solar. This can help decrease the overall cost of investment.
Solar Investment Tax Credits Are Available For Solar Energy Installations
In 2006, Congress enacted the Energy Policy Act, which created the Solar Investment Tax Credit. Known as the ITC, this very subsidy gave rise to the massive solar industry you see today. Since the ITC was passed, the U.S. solar industry has grown by more than 10,000%, hundreds of thousands of jobs have been created, and billions of dollars have been injected into the economy.6 All because of a tax rebate!
In 2019, the tax credit was 30%, and like wind credits, the government has plans to wind the tax credit down. However, it has been extended by two years since 2019 for residential customers. Today, the ITC is 26% off the taxes of any solar installation, from a small-scale rooftop array to a large-scale utility solar farm that powers thousands of homes. By 2024, ITC credit will only be available for utility-scale solar projects.
Theres no need to worry right now. You can still take advantage of this money-saving opportunity by investing in a home solar system that will pay for itself in a few years or take advantage of the credits right now and switch to a solar electricity plan.
Stagnating Or Declining Local Real Estate Values
While most homes have gone up in value by double digits during pandemic, there are likely to be some stagnating or declining real estate pockets developing within some of the local real estate markets such areas may not make a whole lot of financial sense to invest in because theyve either overshot the rest of the given local market or happen to have too many problems like high crime rates that may eventually force current residents to move out, leading to declining real estate values.
However, as the real estate markets are continually going up, those declining areas are currently few and very far between. But the market winds are subject to change, so always do your due diligence and consider the state of the local real estate market including the specific neighborhoods aka pockets within that market, especially if going solar is part of your property appreciation play.
Also Check: Is Solar The Cheapest Form Of Energy
Does My Utility Offer Net Metering
Net metering is a program offered by your local utility that allows you to receive credits on extra energy generated by your solar panels. In fact, its one of the most helpful ways to speed up your solar payback period and offset your monthly electricity bills.
You see, when excess energy is produced by your system, it is sent to the grid. Your local power company then buys that energy from you and you receive credits for the transaction. Most full-retail net metering programs allow you to roll over your credits on to the next month, which is especially useful for reducing energy bills during winter seasons.
In the below video, SolarReviews’ in-house solar expert Will White explains in more detail how net metering works.
Net metering rates and policies differ across the country. At the moment, solar net metering is available in 38 states and Washington D.C. Find out if your state participates here.
Things To Consider With Solar Panels
Calculate your sun exposure, costs and savings. Solar panels will help people in some parts of the country save more money than others. For example, someone in Seattle might not get the same value from solar panels as someone in Phoenix because of the disparity in sunshine.
To estimate your savings, you first need to know how many kilowatt-hours you use and how much youre paying for them. In 2020, the average household used 893 kilowatt-hours each month, according to the U.S. Energy Information Administration. In January 2022, homeowners paid an average 14 cents per kilowatt-hour.
Then, figure out what size system youll need. You can use a solar savings calculator to see how many panels your home would need and how much energy they would generate.
You May Like: How To Connect Solar Panels To The Grid
Your Electricity Costs Are Already Low
According to a survey by the Pew Research Center, 96% of homeowners have installed solar, or are considering doing so, to save money on utility bills.
This makes perfect sense. Many American households spend hundreds of dollars every month on their power bills and solar panels are often the most effective way to slash that amount.
Financial modeling by SolarReviews shows 25-year bill savings in the amount of $78,682 for solar panels installed in San Francisco in 2022, for instance.
However, some homeowners dont spend very much on electricity. This could be because of one or more of the following factors:
- You have a small home
- You have a small household size
- Your home and appliances are energy efficient
- You enjoy low electric rates from your local utility
If thats you, and you pay $50 or less a month for electricity, then installing solar probably isnt worth the time and effort.
Check whether a solar installation would be worth it for you with our calculator
Utility Incentives And Local Rebates
In some states, local utility companies offer various performance-based incentives to promote solar ownership. This type of incentive is based on the amount of solar power generated by the system it does not matter if the energy is used by your home or exported to the utility.
Upfront rebates from manufacturers or city-level programs provide even more savings for purchasing solar panels. However, these benefits are becoming less common nowadays, as prices for solar continue to decrease and the number of installations steadily increase.
Local incentives and rebates vary depending on your state. For more information on available solar incentives in your area and how to claim them, check out our solar panel rebate guide.
Don’t Miss: Pros And Cons On Solar Energy
Will You Still Get An Austin Energy Electricity Bill With Solar Panels
Yes, you will most likely still get an electricity bill from Austin Energy every month. There are a few reasons for this, one being that the Value of Solar rate is technically lower than what you pay for electricity from the grid once you consider all charges and fees. So, the utility pays you less for the energy your panels produce than what it charges you for the electricity your home used.
Not only that, but the buy-all, sell-all structure of the program makes it so your solar energy doesnt fully offset the costs of using energy. Usually, a utility will bill you based on the amount of energy you used from the grid, meaning if you used the energy your panels generated, you wouldnt be billed for it because you didnt take the energy from the grid.
Austin Energy, on the other hand, just bills you for all of your energy consumption, regardless if it came from your panels or the grid. Overall, this leads to lower savings and makes it difficult to offset all of your energy costs. Plus, the Value of Solar credits cannot be used to eliminate any charges or fees from the City of Austin, like taxes.
So, solar panels probably wont get rid of your entire electricity bill, but they can greatly reduce it because the Value of Solar rate isnt drastically lower than the retail rate. You can still see over $1,000 in electricity bill savings over the course of the year!
Offsetting Solar Panel Costs
Another big driver of solars growth are the federal and state-specific solar programs deployed to provide financial assistance for solar installations. These programs include local and federal tax credits and other rebates. Top solar companies should be able to help you identify and apply to any programs you are eligible for. These incentives have proven effective in areas like the Northeast, which may not be known for their sunshine but have made the benefits of solar available to a wide demographic.
The current federal solar investment tax credit provides a 26% credit for systems installed through the end of 2022. State incentives can be added on top of this for even more savings. Rather than cutting down the initial cost of solar, most statewide incentives focus more on rewarding you for the solar energy that your home produces to accelerate your ROI. You can learn more about your states incentives by searching the DSIRE database.
Read Also: Solar Panel With Ac Outlet
What Is The Smart Export Guarantee
Its a scheme introduced by the government that requires all energy suppliers with 150,000 customers or more to pay export tariffs. It started at the beginning of 2020 and its an attempt to make Solar PV panels financially attractive as well as environmentally sustainable.
If youre wondering what the difference is between FIT and SEG, its that SEG only provides payments for the electricity that you export. The previous Feed-in tariff paid homeowners for the energy they created as well as what they exported.
The new rules state that Smart Export Guarantee offered by suppliers apply to solar panels with a capacity of up to five megawatts and that use a meter there is no set rate that suppliers must pay for energy exported to the grid .
Suppliers will be responsible for setting their own SEG tariffs with the proviso that the government will intervene should energy suppliers not provide sufficiently competitive tariffs.
Read our Smart Export Guarantee Article to find out more.
What Is Solar Power For The Home
Homeowners who install solar power systems can receive numerous benefits: lower electric bills, lower carbon footprints, and potentially higher home values. But these benefits typically come with significant installation and maintenance costs and the magnitude of the gains can vary widely from one house to another.
This article will help homeowners make the financial calculations required to determine the viability of solar power in their homes.
Don’t Miss: How To Become A Solar Panel Contractor
Can You Get Incentives For Going Solar
Some states and local governments provide incentives to homeowners to encourage solar power usage. While these incentives may not make solar panels free, they can dramatically reduce the cost of a new solar array installation.
You can find out more information about incentives available to you by calling solar installers in your area. Solar installers are often up to date on the incentives available to homeowners they serve.
In addition, you can look up solar incentives on the Database of State Incentives for Renewables & Efficiency . This website is kept up to date with all the latest changes to solar incentives around the country. Just plug your ZIP code into the online form to find the incentives in your area. There’s also the federal solar Investment Tax Credit , which allows homeowners who install solar on their homes to claim a federal tax credit of 26% on systems installed through 2022.
How Much Money Will You Save With Solar Panels
One of the most common questions surrounding solar energy is: How much will you save with solar? Naturally, this depends on your energy needs, location, solar loan interest rates and budget. However, the average solar panel payback period is between five and 10 years.
When determining whether solar panels are worth it for your home, keep in mind that your savings will be greater if you live in an area where electricity rates are higher by contrast, if you live somewhere with a lower cost of electricity, the money you save using clean energy will be lesser.
Don’t Miss: What Is The Tax Credit For Solar
What Will It Cost You To Go Solar
Solar systems vary in price depending on multiple factors, such as the number of panels you purchase and the type and ease of installation. Buyers also shouldn’t forget about tax credits and incentives, like the 26% federal solar tax credit.
To find out how much you can expect to spend on your homes solar array, contact multiple solar installers in your area, get bids and compare. You want to compare not only the costs but also the efficiency of the panels and the product warranty. While a better system made from higher-quality materials may cost more, it may also last longer, have more efficient panels and require fewer repairs over time. This could make the higher cost worthwhile.
How Much Can You Save With Solar Panels
Taking a look at the initial costs of installation and the amount I make each year from the solar panels I originally calculated that it would take 12 years before Im into profit, even with the FIT payments.
But with the sudden hike in prices over 2021 and beyond, it means that I am saving money far quicker now. By my rough calculations, I should see a profit within 9 years.
Also Check: How Does A Grid Tied Solar System Work
Whats Your Home Electricity Consumption
Most importantly, youll want to consider how much energy your home uses in an average month, as your solar panels will slowly pay for themselves by reducing your electricity expenses. Solar panels are generally considered valuable in homes that use more than 500 kilowatt-hours every month. You can determine your average energy usage by looking at your past electric bills. In California, the typical consumption is just 572 kWh. Homeowners who use much less than the average might find that the return on investment is too low to make going solar a worthwhile endeavor. However, the average energy rate should also be considered. Well discuss this in greater depth below, but know that most CA residents will still benefit from solar conversion even if their energy needs are a bit low.
Estimate Solar Panel Costs
A solar cost calculator can give you a rough estimate on how much it would cost to install solar panels on your home and how much you could save.
When using a calculator, youll have to know how much energy you consume on average. That information should be listed on your monthly utility bill. Your monthly average will determine what size solar system you need to cover your electricity needs.
Depending on the calculator you use, you may be able to factor in tax incentives to get a more accurate picture of your savings .
If you want to save the most money, be sure to get quotes from three or four contractors and check the customer reviews for any manufacturer or installation company before you buy. An online marketplace like EnergySage is helpful because it enables you to compare costs in your local area.
Also Check: How Is Solar Energy Converted Into Electricity
Solar Energy Storage Is Expensive
Heres the hard reality: Energy storage devices for rooftop solar panels cost thousands and thousands of dollars. Perhaps the most advanced product on the market today, Teslas Powerwall costs around $7,200 as of April 2021 for one solar battery and how many you need depends on your current electricity bills Additionally, Tesla only sells the Powerwall to those who also buy solar panels.
The reason why solar storage and energy storage in general is so expensive is that its uncharted territory. In 2010, you would have paid $40,000 for an average residential solar system, whereas todaythe price is half that.11 Were optimistic that 10 years from now, solar storage along with the panels themselves will cost even less than they are today.
This is why most rooftop solar owners currently opt for a net metering setup. With this arrangement, your retail electricity provider agrees to buy excess solar power off your hands. Chariot Energy happens to be one of those providers! During peak generating hours, the excess solar energy you generate and dont use is added to the grid. In turn, your electricity company will pay you for the energy you supplement to your local area.
Is Solar Energy Worth The Investment
Chariot Energy is a solar power company, so of course wed say yes! But we also know this isnt always the case for everyone. You have to consider these pros and cons and determine for yourself whether you want to go solar.
And remember that rooftop solar systems are not the only option you have! While it may seem like the most popular option, there are so many other ways you can go solar. Take our solar electricity plans, for example. Chariot Energy offers 100% solar energy plans for those with or without panels. We make the going green part easy without having to spend a ton of green.
Don’t Miss: How Much Does Solar Power Cost
Are Solar Panels Worth It
This depends on three factors: the cost of the solar array, the amount of sunshine and the cost of energy in your area
Experts in the solar energy industry say the return on investment for a solar panel array depends on a handful of factors, including the original cost of your system, the cost of electricity in your area and how much energy your household consumes plus any costs you may incur for maintenance. The consensus is, however, that the investment tends to pay off over time.
