In the United States, solar energy is expanding steadily. In fact, according to the Department of Energy, there are now enough solar panels to power 18 million American homes, and that number is only rising.
Well, it certainly isn’t too late to jump on the bandwagon, but is solar really worth it? Let’s talk about the benefits of solar power and how it can save you money.
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How Does A Home With Solar Work?
There are some misconceptions about the average home adding solar panels that we want to clear up. First, solar panels do not necessarily make your home “off-grid”. Think about it. Even on the sunniest of days, solar panels can only provide you with so much electricity, and then the sun goes away at night.
The only way to become fully off-grid with solar panels is to have large batteries for several kilowatt-hours for your home. To power the average home for a couple of days, you would need quite a few of these batteries.
Instead, what solar panels do is work with the grid to clean up some of your energy. You will still be receiving energy from your utility company, but it will be heavily subsidized by the solar panels you have on your home.
Although technology is increasing rapidly, the prospects for going off-grid are not far from reality. In most cases, however, you will still be receiving supplemental energy from outside sources.
How Do the Panels Work?
Solar panels are black, which absorbs light the best, when panels are placed in sunlight, whether directly or indirectly, the panels absorb that light into PV cells that move in response and convert the energy into electricity, which can then flow to your desired power source or battery.
Even if it is cloudy or in the middle of winter, your solar panels will still be working more efficiently than you may think. Solar technology has come a long way in recent years.
In fact, if your panels aren’t covered in snow, the added reflection from the white snow may even help increase your panel’s efficiency, allowing them to operate smoothly all year round.
Why Do People Get Solar Panels?
People choose to use solar for a variety of different reasons, whether they be financial, environmental, or status symbols. There are plenty of reasons to use them, and many that everybody can enjoy, but we’ll talk more about that later.
Solar panels will start saving money on utility bills within the first month of installation, but it greatly depends on the amount of sun you get or your home’s solar hours.
Your team will be able to give you a fair estimate of the amount of energy you will be able to receive from your panels, but even limited sunlight will dramatically reduce your bill.
Where Do The Panels Go?
In most cases, solar panels will go on your roof. You’ve probably seen them on several homes before, and maybe even in people’s yards. Different homes will have different requirements.
If you have an old roof or one that is incapable of supporting solar panels, then you may need an alternative location or a new roof prior to installation. Your solar team will be able to identify the best solution for your particular home.
How Do Solar Panels Save You Money?
The big question is whether or not solar panels are worth the investment. Well, we can tell you that the downsides are very limited. There are no increased safety issues within your home, no added interruptions to your energy output, and a limited need for maintenance.
Believe it or not, there are a number of ways in which solar panels save you money beyond simply lowering your long-term electricity costs. Here are just a few examples.
Federal Tax Credit
Even with such a massive deduction, the solar tax credit is one of the most overlooked tax deductions of the year.
In 2021, the federal government will offer you a 26% tax credit for the installation costs. For most homeowners, this simply translates to a 26% discount on your transition to energy independence.
More financial incentives are likely to be a part of President Biden’s plan to bring the country’s energy to 45% solar by 2050, so don’t be surprised if these benefits increase in the coming years.
However, at the current moment, the federal tax incentive is actually declining, meaning that the sooner that you pay for installation, the more you will save.
State Tax Credits
There are plenty of different state incentives for renewables that vary between each state, but nearly every state offers some type of incentive. You can always check out the Database of Incentives for Renewables to see how much you can save at tax time by making the switch.
California, Minnesota, and Texas lead the way in terms of incentives, with nearly every other state offering some type of benefit on top of the federal tax credit.
Massachusetts offers some unique tax incentives in their SMART program, offering up to an additional 15% rebate for your installation costs. Combined with the federal tax incentive, that’s 41%, meaning that solar panel installation that costs $20,000 could save you over $8,000 at tax time.
You will also avoid the 6.25% sales tax associated with most sales in the state under this program, offering nearly half the upfront costs in return total.
Solar panels offer an impressive ROI. In fact, homes with solar panels often see a $6,000 increase per kilowatt or a 4% increase in resale values because of all of the financial benefits of ownership.
That means that if your house is valued at $400,000, you’ll see an average increase of $16,000 in your resell value. Not a bad boost to retirement and buying power. That can offer you a return on your interest for your mortgage.
Cost of Solar
Often, the cost of solar installation is the only major expense, but that isn’t always the case. While solar panels used to be a major status symbol in certain neighborhoods, many homeowners opt for solar leasing instead, which most solar companies offer.
Solar leasing or solar loans work by reducing your electricity rates while you simply pay the difference to your solar company. That means that you will lease the solar panels and pay the same amount as your usual utility bill until the cost of the panels is paid off.
Essentially, you won’t pay any extra throughout the entire lease duration, and in 5 to 20 years, you will own the panels completely, and they will only save you money on your electric bill well into retirement. This allows average homeowners to receive the benefits of solar panels at no additional cost.
This means that you’ll still be saving money in the long run without spending an extra dime upfront, and if you have your mortgage paid off, you’ll be minimizing your expenses for retirement.
Either way, the cost of installation for 10-kilowatt panels will be an average of $20,000 total, but system costs will vary by company and state. Again, that’s often with no money down and no additional monthly costs.
Overall, the cost will be determined by the company, location, scale of the project, labor, and the characteristics of your roof. You will need an individual estimate to get a better idea of what to expect to pay.
Not only are there major financial benefits when it comes to solar installation, but there are also serious benefits that come with owning solar panels that you don’t get from your utility company. Here are a few examples.
Protection from Power Outages
Energy independence is a great reason to opt for solar panels. Again, it will help you stretch your retirement savings for longer, but it will also help you stay ahead of power outages, especially if you add a battery.
When you have a backup battery, it eliminates the need for noisy and gas-guzzling generators. You won’t need to run to the store to refill your tank, as a fully-charged battery can last you until the power comes back on during a storm or power outage.
Reduced Carbon Footprint
Many of us look for ways to reduce our carbon footprint as the need for renewables increases. Well, you can get ahead of the curve.
Remember, you can drive an electric vehicle, but it won’t even make a dent in your carbon footprint if you’re filling it up with electricity that comes from fossil fuel sources like your utility company offers.
If you switch to getting the majority of your energy from solar power, use electric heat, and drive a rechargeable hybrid or electric vehicle, you will go a long way toward drastically reducing your carbon output.
Let’s face it, houses with solar panels look futuristic and neat. If you’re one of the first houses in your neighborhood to get solar panels, it will help your home stand out from the rest.
Solar panels are also a great conversation starter. You may even encourage your neighbors to follow suit, which will dramatically reduce the carbon footprint in your area. This is especially true if you’re able to tell them about all of the financial benefits that come with solar ownership.
Protect Your Roof
Solar panels don’t cause any damage to the structure of your roof. In fact, it’s quite the opposite. Solar panels provide a protective layer between your roof and outside elements, which can actually keep your roof in good shape for longer.
The average asphalt shingle roof (the most common type) only lasts 16 years, especially in snowy areas, and they’re very expensive to fix. Offering any protection is always a welcome benefit for most homeowners.
Is Solar Power Right For Me?
Now that you know the benefits of solar power, the only way thing left to determine if solar panels are right for your home is to consider all of these factors, find out how much you can save, and consider the pricing options.
Also, not every home and energy system is ready for solar energy. Some will require upgrades in order to receive the benefits of solar power.
The best way to do find out if solar energy is right for you is to speak with a team of solar professionals and determine how much you should expect to pay and receive from your investment.
However, if you are looking to reduce your carbon footprint, achieve energy independence, increase your home’s value, and save money throughout your retirement, then there is no easier way than adding solar panels to your home.
It is a long-term investment that will pay off for the rest of your life, and you can rest assured knowing that you are reducing your mark on the environment.
There’s only one other factor to consider, and that’s talking to your home insurance provider to determine if solar panels will affect your policy at all. It may be negative, and it may be positive, but there’s only one way to find out!
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Now that you know what solar power can do for your home, there’s no time like the present to start saving money. You will be glad you did when tax time comes around or when your lease is up, and you start saving a fortune through retirement. Get started today, stay up to date with our latest news for homeowners, and feel free to contact us with any questions!