Rapidly Rising Electricity Costs
Lets face it, domestic electricity costs are rising rapidly across the nation, especially in Los Angeles, California where residential electricity rates have increased by over 10% from June 2020 to June 2021. Across California, prices have risen by 7% in the same time period.
There is no reason to expect that the rapid increase in electricity and home energy costs will be curtailed any time soon. In fact, with the rapid adoption of sustainability and ESG policies such as moving away from coal and fossil fuels, domestic energy costs are likely to continue to rise over the next decade, especially in states with limited natural resources.
A growing adoption of electric and plug-in hybrid electric vehicles also puts an increasing demand on the electric grid and existing infrastructure. Expanding and upgrading the existing infrastructure to support rapidly rising number of BEVs and PHEVs on the road will likely continue driving up electricity rates over the next 5-10 years. These dynamics are projected to accelerate as states like Washington, Oregon, California, and others incentivize or mandate policies that foster adoption of electric vehicles by 2030 and/or beyond.
If you are concerned about the rising electricity rates in your home state, then investing in a PV solar power system will help offset the effects of rising energy rates while also reducing or even eliminating your current electric utility bills.
Solar Panel Pros And Cons: Find Out If They’re Worth It For You
Here’s what you need to know about solar panels before you spend thousands.
Solar panels have a lot of benefits, but there are downsides too.
Solar panels provide emissions-free energy, reducing your carbon footprint. Their popularity skyrocketed in 2020 with a 43% increase in gigawatts compared to 2019. With countries adopting clean energy measures to slow the growing risks of climate change, it’s a wise time to consider adding solar panels to your home. But there are downsides to solar panels too.
Our guide tackles the advantages and disadvantages of using solar panels so you can make the best possible decision.
Review Your Electric Bill
Solar panels generate their own power and can therefore greatly offset your monthly electricity bill, if not eliminate it. The higher your bill, the more likely you’ll benefit from switching. But you should note that electricity rates and usage the main charges on your statement are volatile.
“If a utilitys electricity prices fluctuate, so could the amount of savings,” says Garrett Nilsen, deputy director for the U.S. Department of Energy’s solar energy technologies office. “Similarly, if energy consumption changes, the amount of savings can also vary.”
Visit the EIA website to view the most recent prices per state.
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How Am I Going To Finance My Home Solar System
Paying for your system outright will make sense if you have sufficient liquid assets available to invest. Solar provides a low-risk return rate relative to other investments, such as the stock market.
That said, many people choose to take out a loan to pay for their system. Financing your solar system through a lender reduces the upfront cost and can often be structured to eliminate your electric bill by effectively replacing it with a loan payment. The loan has a shorter term than the life of a solar power system, which means that you will get significantly more financial benefits when your loan is paid off.
El Paso Electric Company Net Metering
El Paso Electric has a net metering program for solar power systems with up to 50 kW of capacity or 100% of consumption, whichever is smaller. If necessary, EPE will install a bidirectional power meter at no cost for the client.
All electricity generation below your monthly consumption is credited at the full kWh price. If solar generation is higher than consumption, you get credit for the surplus kWh at the avoided cost rate, and this credit is carried to the next power bill. Once the balance in your favor reaches $50, EPE will send a check.
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Federal Tax Credits And Local Incentives
Whether you like it or not, Uncle Sam aka the US Congress has decided that going solar is good for you, which is why they have recently extended the 26% federal solar investment tax credit aka tax rebate through December 31st, 2022 .
At an average upfront cost of $15,000 to $25,000 for a domestic PV system, you can shave off some $3,900 to $6,500 of your tax bill come tax time.
But financial incentives dont end at the federal level, as there are also numerous state and local incentives including net metering rules that can make residential solar investment even more lucrative.
Higher Home Resale Value
Rooftop solar panels can increase your homes resale value with a return on investment that is higher than many other types of home improvements. According to Zillow, solar panels boost the selling price of a home by 4.1%.
Additionally, a 15-year, eight-state study by Lawrence Berkeley National Laboratory showed a home price premium between 0.78% and 1.05% per kilowatt of solar.
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What About Net Metering
Net metering is one of the most important solar policies and incentives in the residential solar industry. Essentially, it allows you to store any excess energy produced by your solar system in the electrical grid for use at a later time. With net metering, you wont receive a monthly payment: instead, you will receive utility bill credits for the electricity produced by your solar panels. Its important to note that not all states offer net metering, so youll want to check out the Database of State Incentives for Renewables and Efficiency , which tracks net metering and other policies.
Are Solar Panels Worth It In Houston Texas
Solar Payback Calculation For A 5kW Solar System In Houston, Texas
What is the average solar payback period Houston, Texas?
- City: Houston, Texas
- How big is the solar system?:5kW
- Solar installation capital cost = $13700 26% federal tax credit = $10138
- Irradiance at Houston, Tx = 1552 Peak Sun Hours
- Power produced by solar panels = 1552 x 5kw = 7760 kWhrs
- Houston residential electricity cost per unit = 10.98 cents/kWh
- Annual savings = solar production x elec cost = 7760 x 10.98 = $852
- Solar payback period Houston, Texas = solar cost/yearly savings = 10138/852 = 11.9 years
The payback period could be less than this, as low as 9 to 10 years. Professional installers can give really accurate assessments based on historical data, the irradiance in your location and the combination of panel array orientation and tilt angle.
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How To Buy Solar Panels In Texas
When buying solar panels its important to do your research and shop around. As you shop for your solar system, you may also want to consider:
- Whether you have an HOA. Depending on your neighborhood, an HOA might have rules around a solar system on your property or require approval before installation.
- The angle of your roof. The U.S. Department of Energy says that solar panels work best on south-facing roofs with a slope of 15 to 40 degrees.
- The condition and age of your roof. If your roof is old and will need to be replaced soon, it may not make sense to install solar now.
- The amount of sun your home gets. The more your solar panels are exposed to the sun, the more money you can save on electricity. But, if your home doesnt get a lot of sunshine, solar panels may not be a wise investment.
How Long Before Solar Panels Pay Themselves Off In Texas
This depends on the amount of electricity you consume each month and the size of the solar system you bought.
In Texas, the average monthly electricity consumption is 1,140kWh per month. The average cost per kWh in Texas is 11.96 cents per kWh.
Therefore the average home in Texas could expect to pay about $136,66 a month for electricity.
As already discussed, you would need a 7.6kW solar system to offset this amount of consumption. Your total cost for a 7.6kW solar system would be $22,496 .
Texas government allows residential customers to claim a 30 percent tax credit for the purchase and installation of solar systems.
Therefore, your total solar system cost would be $15,748.
$15,748 divided by $136,66 = 115 months.
115 months divided by 12 months = 9.5 years.
It will take a solar panel system 9.5 years to pay itself off, assuming you use around 1,140kWh a month. On average solar panels last between 25 30 years.
This means you will enjoy 20 years of free electricity and will save around $32,798 within that time span!
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You Might Be Moving Soon
Needless to say, if you are planning on moving in the next three to five years, then installing solar panels today will not give you the full benefit of owning solar panels. That said, you may still be able to sell your home at a profit because potential buyers will likely find your property more attractive thanks to the solar panels.
Tax Incentives Tax Credits And Rebates In Texas*
Federal Solar Investment Tax Credit **
The 26% federal solar tax credit is available for a purchased Texas home solar system installed by December 31, 2022.6
TXU Energy Renewable Buyback Plan
Bill credits for the excess solar power a home solar panel installation creates.7
Solar Energy System Property Tax Exemption
Property tax exemption on the added home value from the installed solar panels in Texas.8
Local Utility Company Solar Rebates
Rebate to reduce solars up-front cost or after systems installation.9,10,11,12
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Here Are The Reasons To Go Solar In Texas
Solar panels are worth it in Texas and across America because they allow homeowners to save money on power bills by creating your own energy that can be used within the home to power anything that runs on electricity. Chances are, youve probably driven down the road and noticed more and more houses with black and blue rectangular devices affixed to the roof
So the question that then pops up is, Are solar panels worth it in Texas? This article is designed to give you an overview of the benefits of going solar, and ultimately lead you down the path to answer that question.
Request a FREE online analysis of how much money you could save with solar power at your location!
Are Solar Panels Efficient
Some solar panels convert 22 percent of their available energy into electrical power. This is an actually amazing number if you consider the fact that we are paying a lot of our electricity bills every month. The solar panels are made of solar cells. A cell is a small disk of a semiconductor like silicon. They are attached by wire to a circuit. As light strikes the semiconductor, light is converted into electricity that flows through the circuit. As soon as the light is removed, the solar cell stops producing power.
A solar pool heating system uses the suns radiant energy to heat your water. The water is directed to the collectors, rising from the bottom to the top. As it gradually rises, its heated by the natural energy and then returned to your pool. This cycle continues until your pool water reaches the desired temperature. You can enjoy an added 10-13° to your water without any extra costs or air pollution!
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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.
Texas Is One Of The Best Solar States In Terms Of Pure Sun Exposure
Texas has an average of 234 sunny days per year, about 29 days more than the national average of 205 sunny days. Even if youre in the northern part of the state where its a bit cooler, the climate is still ripe for a residential solar system.
Heres a breakdown of sun hours per day by city:
Houston 5.9 hours per day
Austin 6.7 hours per day
Lubbock 7.5 hours per day
Corpus Christi 6.2 hours per day
Dallas Ft. Worth 6.9 hours per day
Midland 7.7 hours per day
El Paso 8.6 hours per day
The US country average for peak sun hours per day is 3-5, so any region in Texas is an above-average location for solar panels.
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Texas Solar Rebate Programs
While Texas doesnt have a statewide solar tax credit or solar rebate program, many utilities and local governments offer incentives to homeowners who want to go solar. Here are some examples:
- Austin Energy: If you live in Austin, you can get a rebate of $2,500. Plus, youre eligible for Austin Energys Value of Solar Tariff, which pays you $0.097 for every kilowatt-hour your solar panels can generate.
- CPS Energy: If youre a CPS Energy customer, you can receive up to $1.20/W of solar panels that you install on your roof. Like Austin Energy, the value of the incentive drops as more solar is installed, so nows the time to go solar if you are in the CPS Energy service area.
- Guadalupe Valley Electric Cooperative, and the City of Sunset Valley all also offer rebates for homeowners in their areas.
Determine Your Home Electrical Consumption
To find out the required size of the solar energy system, you need to determine your home electrical consumption as well as daily solar peak hours.
Your utility bill would give an accurate idea about your energy consumption.
Lets do some maths. A resident of Texas consumes an average of 1,200 kWh per month or 40 kWh per day. There is an average of 5.0 solar peak hours per day in Texas. Therefore, a system size of 40/5 = 8 kW would be required.
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How Does Solar Tracking Work
The suns seasonal arc is like a pendulum. Every day it swings higher and lower, varying in height by tens of degrees across the seasons because its angle changes throughout Earths annual orbit around the Sun. These movements can be separated into two axes: horizontal and vertical.
An automatic sun-tracker keeps the solar panel array perpendicular to the suns rays. This way, an optimal angle of incidence is maintained at all times.
A solar power system that tracks the sun vertically is called a single axis tracker and one which tracks both axes is called a dual-axis tracker.
In general, the more expensive dual-axis tracking will recover more energy than its cheaper counterpart over time but an experienced installer can help you find out whats best for your needs.
Solar Power In Texas Simply Makes Sense
Adopting a solar panel can be a fantastic way of helping you save money on your energy bills. Think of how much money you already spend on your utility bills, especially during the hottest parts of the year. Wouldnt you like to shave a few dollars off of your bill?
In fact, Texas may be able to produce more solar energy than any other state if the local government in Texas really works at encouraging residents to adopt solar energy with added incentives like rebates and tax breaks.
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The Cost Of Electricity In Texas
According to the Energy Information Administration, the average cost of electricity in Texas as of August 2021 was 12.03 cents per kilowatt hour . This is slightly lower than the national average which can make it seem like you may not need solar, but lets dig a little deeper.
The average Texas home uses approximately 39.2kWh per day, thats more than 10kWh more than the national average. This could be caused by increased air conditioning and other climate control equipment among other things. This high electricity usage results in monthly electricity bills ranging from $126 to $142 per month.
You Gain Some Energy Independence
Solar panels use photovoltaic cells to harness radiation from the sun. Once converted from a direct to an alternating current, the panels allow your home to use the energy. In turn, you gain an energy source independent from the utility company, saving you money relative to using traditional energy sources for all of your power needs.
You can earn more on your investment through the sale of offsets. Some states allow you to sell your excess energy back to utility companies, which must purchase some of their power from renewable energy sources.
Moreover, if your utility experiences a power outage, you can use the energy stored in solar panels to keep your home powered through the storm. Overall, solar panels give you a level of power stability and financial flexibility not found in traditional sources.
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