Many people know solar power can save you money in the long run, but did you know it could start saving you money immediately as well? In addition, solar power lowers your impact on the planet. To find out if solar is right for your home, keep reading this article.
At first, purchasing solar panels may seem like an unaffordable expense. However, many solar companies structure the payment such that the amount you pay each month is less than what you would pay each month on your electric bill. That means, if you can afford your electric bill, you can afford to go solar. How do they make that happen? Since your new solar installation is providing much of or all of the electricity for your home, your electric bill will be much lower or even non-existent. Your solar provider is able to take that new lower number, as well as break out the cost of your solar installation over an amount of time to determine an amount to be paid back each month, so that you can start saving money right away. On the other hand, if you don’t go solar, you can end up paying the electric company well over $50,000 over 20 years. Electricity prices are fairly high in areas across the United States and only increasing. Of course, if you wanted to pay for the entire installation up front most solar companies would be happy to do that as well.
Also, many utility companies use a program called net metering. Your solar installation will be designed such that it can meet most of or all of the electrical demands of your home. This means some months you’ll generate more power than you can use. Your utility company can store this additional amount as a credit. Then, in other months, for example in winter or on cloudy days, you’ll generate less than you use. Net metering allows you to use these credits to make up for the difference. That way, you’re not paying high electric bills in the winter. This also means you don’t have to install batteries to smooth out the highs and lows throughout the year or worry about cloudy days. However, if you are interested in batteries for your home most solar companies can help you with that as well.
How long does it take to pay off a solar system?
It’s a tough question to answer because the amount of energy you can harness from solar depends on many different property characteristics, but on average four to eight years should be expected. Some people may need a new roof or upgraded electrical system, however most solar companies can help you with that as well. One other positive financial impact of going solar is it can increase the value of your home. According to one of the most popular home real estate platforms Zillow, homes with solar power are worth about four percent more than houses without solar.
Environmental Benefit of Going Solar
Some people may not care about the cost and want to go solar for the environmental benefit. How much better is solar for the environment? Solar power does have some environmental impact initially because the solar panels need to be manufactured, shipped, and installed. However, as you can see here, one study shows that all of the impacts caused by solar power are much less than that caused by coal or natural gas, with the exception of depleting metals needed to create solar panels. If you compare greenhouse gases between solar and fossil fuels, you can’t even use the same scale to show the comparison. According to a different study, it only takes about 2.3 years for solar panels to create enough clean power that they offset the negative impacts caused, which is faster than the amount of time it’ll take you to pay off the system.
Solar Federal Tax Credit
There’s a federal tax credit you can get to reduce the system cost. The tax credit has changed each year, so check out my most recent article on the tax credit for the most up to date information. Now is a great time to go solar if you wait too long you’ll miss out on a huge cost savings, which means it’ll take longer to pay off the system. Also, some states are offering additional tax credits and incentives to help you save even more money.
One reason people hold off on going solar is that there might be better technology coming out. However, while solar panels are becoming more efficient, they aren’t becoming more efficient fast enough to make waiting the best option. For example, if you compared a solar panel today that is about 25 percent efficient with a solar panel in just one year from now that is 27 efficient which is a huge and unlikely jump in efficiency for a single year, would result in about a two percent energy gain. However, at the same time, the tax credit would decrease by about four percent. To give you an idea of what this means in dollars, an average 300 watt panel would increase to a 306 watt panel, which you can generate about six dollars worth of electricity with across the year. If you wait until 2021 that six dollars will cost you hundreds of dollars and if you wait until 2022 it’ll cost you thousands. So, the best move is to go solar now if the conditions are right for you.
In summary, solar panels may seem like they don’t make financial sense for you right now, but for many people, now may be one of the last best times. Electricity prices across the country are increasing, tax incentives that help reduce the payback period are disappearing, and the efficiency of new technology isn’t increasing fast enough to make waiting worth it. Given all of this, doing nothing is likely the most costly option on your wallet and on the environment.
If you’re interested in getting solar for your home check out EnergySage. They connect you with solar installers in your area and won’t bug you with dozens of phone calls or knocking on your door. They also make sure each provider is licensed, insured, and has been given positive reviews from their customers.
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