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.
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.
How Do Solar Panels Affect Property Values
In general, solar panels have been shown to increase property values. Most notably, a 2015 study published by Lawrence Berkeley Labs analyzed sales of solar-equipped homes in eight different states over 11 years. It found that homebuyers were willing to pay more for homes with a solar PV system across a variety of states, housing markets and home types. Lawrence Berkeley Labs estimated that the premium was about $4 per watt of installed solar capacity, approximately 8% lower than the installation price per watt at the time of the study . Assuming the premium is worth about 90% of the installation price per watt, a six-kilowatt system totaling roughly $15,800 prior to the federal tax credit would see a subsequent rise in home value of about $14,200.
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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.
Things To Consider With Solar Panels
Calculate your sun exposure, costs and savings. In some parts of the country, solar panels will save more money and add more value to your home than in 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. The average household pays about 13 cents per kilowatt-hour for 877 kilowatt-hours each month, according to 2019 data from the U.S. Energy Information Administration.
Then, figure out what size system youll need. You can use the Solar-Estimate calculator to see how many panels your home would need and how much energy they would generate.
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Is It Worth Getting Solar
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. With solar storage now available, it is also possible to further reduce your power bill and run your house almost entirely off solar power.
Are solar panels worth it 2019?
Yes, Solar Power Costs around 9p/kWh! This year saw the Feed-in Tariff closed to new applicants, leaving a very different landscape to the heady days of 2010, when the feed-in tariff scheme was first launched and the subsidy was around 43p per kWh.
Finding Your Current Electricity Rate
Utility bill sample
So in this example bill from a California utility, you would take $300.09 / 1500 kWh = $0.20/kWh.
But this is not really the most accurate number because it includes your fixed monthly charges, which inflate the cost per kWh. With solar panels, you would still stay connected to the grid and would continue to have fixed charges. Therefore, it would be better if you could find the total cost before the fixed charges. You can compare multiple monthly bills to see which charges are fixed from month to month, or speak to your utility to learn more about the fixed charges for solar customers.
If you dont want to dig up your past electricity bills, you can also use the 12-month average for your state . In the case of California, the state average for the past 12 months is $0.17/kWh, which is lower than the figure we calculated above.
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Solar Panels Wont Cost Too Much To Install In The Grand Scheme Of Things
The only thing that holds some people back from installing solar panels in California is the price tag on them. Theyre worried about how much that solar panels are going to cost them.
Solar panels are going to call for you to make an investment in your home. But theyre \ not usually going to break the bank. You should be able to pick up some solar panels that will fit well within your budget as long as you shop around for them.
As we alluded to earlier, youre also going to find that solar panels will pay for themselves over time. Theyll save you some money on your energy bills every month, and that money will go back into your pocket to offset the initial cost of solar in California.
The average cost of solar panels in California is always changing. But you should find that its not the astronomical cost that you might be imagining.
What Is Solar Power For The Home
Homeowners who install photovoltaic power systems 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.
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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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How Much Do You Pay For Electricity
Your current electricity bill is the largest factor in determining how much youll save by installing solar. You pay your utility company for every kilowatt-hour of electricity you use, and your rate varies significantly depending on where you live. In some parts of the country, like the South, you can pay under 12 cents per kWh in others, like the Northeast, you could pay 20 cents or more. When you go solar, you reduce or eliminate your monthly electricity bill, so the amount you pay for electricity substantially impacts your savings.
If youre not sure where to start in determining your solar savings, try using our Solar Calculator. Our calculator incorporates local electricity rate data to provide you with a customized estimate of what you can expect to save, and just how quickly your investment will pay off.
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Other Solar Payment Options
As previously noted, individuals who do not want to purchase a system but are interested in using solar power may consider solar loans, or solar leases and power purchase agreements . Solar loans are similar to many home improvement loans. Homeowners may borrow money from a bank or solar installer, agreeing to pay it back plus interest in monthly installments over the loan term. Solar loans can be secured or unsecured and work similarly to a typical loan.
As a second alternative, solar leases and PPAs allow homeowners to rent a solar panel system from the solar panel company that owns it. Homeowners receive the energy they produce, but do not own the panels themselves. As a result, households choosing this option will not receive additional solar incentives since those are solely given to the owner of the solar panel system in this case, the third-party owner.
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.
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What Is Grid Parity
In the case of Los Angeles, using the state average utility rate of $0.17/kWh and comparing that to the LCOE of $0.08/kWh, we see that solar energy makes financial sense, and you would save a significant amount of money over the lifetime of your panels.
Of course, if you live elsewhere, or learn that the cost is different than the $4/W we assumed, or that you can benefit from additional incentives, you need to run the numbers again . You can sharpen your pencils, sort them in descending order, take out your favorite notepad and prepare to spend some time on the math, or just use Sunmetrix Discover and save yourself the hassle.
To see how your state compares when it comes to residential solar, you can check out our interactive grid parity map. You can even adjust the cost of solar panels to reflect falling prices. If your state hasnt reached grid parity yet, you can see at what cost per watt it does. If you live in Canada, we have a map for you too.
You can easily see how critical the federal investment tax credit of 30% has been in stimulating the growth of the residential solar market. Just try switching it off with our interactive map and see what happens when there is no ITC. Its helped residential solar take off in many locations.
Remember, any additional state or municipal incentives will only improve the profitability of solar where you live.
To sum up, Ill just imagine what Yoda would have said about the topics we covered above:
What Maintenance Is Required For Solar Panels
There is very little maintenance required for solar panels. It is recommended that you clean your solar panels once or twice a year to avoid dirt and buildup. However, this might not be necessary if your area gets regular rainfall or if your roof is steep, which allows debris to easily fall off.
It is worth checking to see that all junction boxes are sealed and watertight once every five years.
Because there is almost no maintenance required, you dont need to worry about additional maintenance costs.
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What Affects Your Solar Panels’ Payback Time
The amount you earn from either the SEG, the FIT or the savings you make by using the renewable electricity your system generates can be affected by:
- Electricity price changes These affect how much you save on your electricity bills by using the electricity generated by your system. The higher electricity prices go, the greater your savings.
- Solar panel installation cost A smaller upfront cost could mean that it’s quicker to break even, though if your system is also smaller then it may generate less electricity.
- SEG tariff rates These vary wildly between companies. A fixed tariff guarantees the same rates for the length of the deal, while variable tariffs change based on the price of electricity .
- Inflation This affects feed-in tariff payments, if youre signed up for them. They change in line with RPI each year.
Find out how much solar panels cost for your home.
Government Programs And Financial Incentives Via Rebate And Tax Credit
One of the heftiest savers for solar panel users is the series of government whether local or nationwide incentives for going solar.
You should look into this first in your own city, county, and state to best understand what the incentives are and how much youd save on your costs. This will also factor into the figures of how much of a payoff you get for your investment in solar panels.
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Estimate Solar System Size And Installation Costs To Answer Are Solar Panels Worth It
Next, youll need to determine what size solar panel system you need and the estimated cost of solar panels:
1. Estimate the size of your solar system. Use our solar panel cost calculator to determine what size system you would need to cover your usage. You just need the 2 two figures above, along with your ZIP code .
The calculator returns a system size and cost estimate to use for our purposes here. You can also compare the system size recommendation to our pre-packaged systems to hone in on an exact cost for solar financing.
Example: This 6.3 kW system produces about 870 kWh/month, perfect to offset our usage of 867 kWh/month from step 2. The system costs $9,669 at the time of publication. Well add another $1,500 as a rough estimate for taxes, shipping and permitting fees. Total cost estimate: $11,169.
2. Add installation costs. Local solar installers charge around $1/watt to install a system, which would amount to $6,300 for the 6.3 kW system linked above.
Many of our customers choose to install their own system to save this chunk of cash which dramatically changes the payback calculations. If you do decide to hire someone to complete the solar panel installation, add that fee to the total cost of going solar.
Example: $6,300 if installed by a contractor / $0 if you DIY install.
Do I Need To Buy A Solar Battery If I Install Solar Energy Panels On My House
In short, no.
In most areas, it is not necessary to buy a solar battery when you install solar panels on your roof. This is because most utilities offer some form of net metering, which effectively allows homeowners to sell the excess energy their solar panels produce to the power company, instead of physically storing it in a battery.
Even though battery storage is getting cheaper, it still has a relatively long payback period. For example, the Tesla Powerwall only costs around $12,000, including installation, but it will still take almost 10 years for it to pay for itself.
Another important factor when deciding are solar panels worth it is how high your electricity rates are and whether or not your utility offers retail net metering. Places with high electric rates and full retail net metering are often some of the best places to install solar.
With that said, it may be worth considering installing solar with a battery system if you live in an area that does not offer net metering.
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Sois Solar Power Worth It
For grid-tied homeowners, the math is clear: solar energy costs less than buying power from the utility company in the long run.
The payback period is around 8-9 years if you hire someone to install your system. When you measure that against the 25-year warranty on your panels, youre looking at serious energy bill savings over the life of ownership. And if you decide to install it yourself, that payback period accelerates to 5-6 years with the money saved on installation costs. More than anything, utilizing a solar power system reduces your carbon footprint and can minimize the effects on climate change.
Ready to learn more?
Grab a free copy of our Getting Started Guide or dive right into the DIY Solar Workshop for a step-by-step overview of the process of going solar.
What Are The Best Solar Panels For Residential Homes Cost
Top 3 solar panels by cost Hanwha Q CELLS Peak Duo: average price, REC Alpha Pure series: average price, LG NeON 2 series: average price, Keep in mind that the average total cost of a solar panel system is 15,000 to $25,000.
Costco Solar Panels How much does the Costco solar cell cost? For example, if your system totaled $ 20,000, the cost of your device could be between $ 5,000 and $ 10,000, which means you can get a Costco prepaid card worth between $ 500 and $ 1,000.Does Costco also offer solar panels?Solar systems for residential buildings. * Costco Shop Cards are valid only for the purchase of qualifying equipment . It does not apply to installation.You may also be
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