Solar panels are a worthwhile investment in most cases, but they may not be the best option for you. However, even renters may have solar alternatives if their property owners or managers are receptive; if not, they may be able to enroll in nearby community solar projects. This essay will answer the issue, "Is it worthwhile to purchase solar panels? "
When solar panels are a good investment and when they are not
Solar panels are often the best investment if:
You own your property: renters or business owners who do not own their property must consult with the property owner before installing a solar system.
You pay a high electricity price: The higher your electric cost, the quicker your solar panel system will save you money. Solar buyers "break-even" on their investment within seven to eight years.
You get a good price for solar: In 2023, an average 10 kilowatt (kW) solar panel installation will cost approximately $20,020.
If you meet these conditions, solar panels are likely worthwhile! In addition, houses and businesses that do not satisfy these requirements can benefit from solar with the proper installation (or community solar subscription).
When do solar panels become unprofitable? Solar energy may not be appropriate for you if:
You rent your property: Community solar, which does not require you to install solar panels on your land, is a better option for you because you rent your home.
You pay a low price for electricity: You pay a low electricity price; the major method solar saves money is by offsetting power costs with free electricity from the sun. If you already pay a cheap cost for power, it may take a very long time for your solar investment to "break even."
You're paying too much upfront for solar: You are paying too much forward for solar: just as having a low power rate makes solar less attractive, so do big upfront expenditures. Be aware of solar contractors who charge exorbitant costs; the easiest way to ensure you're getting a decent bargain is to compare solar quotations.
The most important message is that if you own a home and have an electric bill, solar panels are probably worthwhile! Solar panels continue to decrease in price so that you will save money in the long term.
How much will solar savings be? Estimating your expenditures and savings
How much money will you save? This is likely the first thing that comes to mind when considering solar energy. With justification! After all, solar is an investment, so you'll want to know your payback period before making any selections. Over the course of a solar panel system's lifetime, the average household can save between $10,000 and $30,000. Most property owners will recoup their solar investment in eight to nine years. However, there are a few things you should consider to estimate your return on investment:
What is the cost of your electricity?
Your existing energy bill is the primary determinant of how much you will save by adding solar panels. Knowing how much electricity you use and how much you pay for it is the first step in determining your potential savings with solar energy. You pay your local utility company per kilowatt-hour (kWh) of energy consumed, and your rate varies greatly based on where you live. In some regions of the country, such as the South, your electricity supplier may charge less than 12 cents per kilowatt-hour; in others, such as the Northeast, you may pay 20 cents or more. When you go solar, you lower or eliminate your monthly electricity expense; therefore, your utility bills and the local cost of electricity greatly impact your savings.
What will the cost of installing solar panels be?
Several factors affect the total cost of your solar panel installation, so you should conduct some preliminary study. As solar deployment continues to increase, the cost of solar will undoubtedly continue to decline. Still, the following elements will have the most impact on your array's price - and, consequently, your savings:
System size: the amount of electricity you consume is proportional to the amount of energy you will need to generate, hence the size of your solar array. Generally, a larger system with more panels would have a higher average cost than a smaller one with fewer panels.
Equipment: High-quality equipment will frequently result in higher long-term savings than purchasing cheaper solar panels.
Roof characteristics: a single, south-facing roof plane that slopes at a 30-degree angle is great for solar! This doesn't mean solar isn't worth it if you don't have a perfect solar roof, but your installation may be more complicated (and hence more expensive). Your sun exposure may be less direct (meaning potentially fewer savings).
Labor: Even when installing identical equipment, labor costs might vary significantly among solar firms. Different solar installation businesses provide varying labor guarantees and levels of expertise, which is why it's essential to locate pre-screened, high-quality installers.
Location: solar prices vary by state; in general, you'll notice a lower price per Watt ($/W) in warm states and a higher $/W in cold states, although you may need a larger system size in a warm state. Rebates and incentives are additional considerations that vary by location and affect your solar savings.
Which discounts and incentives are offered?
Rebates and incentives dramatically cut the total cost of solar energy and can put money in your pocket every month, resulting in large long-term savings. The best solar incentive is the investment tax credit (ITC), which allows you to deduct 30 percent of your solar installation costs from your federal income taxes. There is no cap on its value, but your tax liability will determine whether you can take advantage of this incentive to its fullest extent.
Local incentives such as state tax credits, cash rebates, solar renewable energy certificates (SRECs), and performance-based incentives (PBIs) can boost your solar savings by up to 50 percent, depending on where you reside. You may also be eligible for exemptions on the solar photovoltaic (PV) system's sales tax and the increase in your property taxes.
Net metering is the final policy to remember, and it is one of the most crucial in the residential solar sector. Essentially, it enables you to store extra energy generated by your solar system in the electrical grid for later consumption. With net metering, you will not receive a monthly payment; instead, you will receive credits on your utility bill for the electricity generated by your solar panels. Not all states allow net metering. Therefore, you should consult the Database of State Incentives for Renewables and Efficiency (DSIRE), which keeps track of net metering and other laws.
In the next ten years, do you intend to sell your home?
Purchasing a solar system may not be worthwhile if you plan to relocate in the near future. If you plan to relocate in the near future, investing in a solar energy system may not be worthwhile. Consider alternatives, such as community solar, that do not tie you to panels on your roof for decades, such as community solar. It is also crucial to realize that installing a solar system can considerably raise the value of your home, so solar can still be worthwhile. Leasing your solar panels may also be possible, but bear in mind that leases are often long-term and difficult to cancel, making selling your property more challenging.
How to increase solar savings
Solar energy will result in financial benefits, but how may these savings be maximized? We offer a few recommendations to help you maximize your solar system:
1. Get several quotes
As with any expensive purchase, purchasing solar takes significant research and deliberation, including a comprehensive evaluation of local firms. By comparing numerous solar installation bids, you will enhance competition for your business and achieve greater transparency, resulting in a higher quality installation at the best price.
2. Investigate smaller installers.
Exploring all their solar options is crucial, not just for the installers with the largest advertising budgets. The same 2017 NREL analysis noted above indicated that estimates from major installers were, on average, 10 percent higher than those from mid-sized and small installers. If you obtain bids from any of the industry's larger businesses, compare them with quotes from local installers to avoid paying too much for solar.
3. Compare equipment options
Comparing the equipment given by each installer will also be possible if you obtain multiple bids. There are numerous factors to consider when searching for the best solar equipment, such as solar panels and inverters. While some equipment will have higher efficiency ratings than others, investing in premium solar equipment does not always result in greater savings. The only way to determine the optimal system for your property is to compare bids with various equipment and financing options.