The rising environmental and financial cost of traditional energy sources makes home solar panels seem like a smart idea for many homeowners. Solar energy is an energy-conscious choice that can also be a good investment opportunity for the future. However, many people are unsure whether switching to a solar system for home energy will actually save them money.
In simple terms, solar panels will save you money but the total amount you will save will vary depending on several different factors. For example, the number of direct hours of sunlight your home gets can drastically change how much money you save. Local electricity rates and the size of your pool are also factors that can determine how much your solar panel cost will be offset by your savings.
Learn more about how a solar energy system for your home can help you save money on your electric bill and reduce your carbon footprint.
How much does solar power save you on electric bills?
To get a better understanding of how much money home solar panels can save you over time, you will need to calculate how much you spend on your electric bills on a yearly basis. The higher your electric bill, the more likely you will save money from the solar installation. Additionally, the solar federal tax credit can lead to even larger savings which would be great for your wallet.
Here are some of the biggest reasons why you should consider investing in home solar panels:
- The price of energy has not gone down in years.
- Solar financing companies and more affordable installation costs has made it more accessible to install solar panels.
- There are long-term subsidy benefits to installing a solar energy system for your home.
- You can save money by reducing your monthly electricity bill.
- Solar panels are long-lasting and do not require much maintenance or upkeep.
Before you can calculate your total savings, you will need to evaluate your sunlight exposure. Naturally, areas of the country with more sunlight exposure such as Arizona, Florida, and California will average more savings than other areas with less sunlight hours per day. The orientation of your home towards the sun and the type of roof will also affect the solar system’s output.
Although you will still have an electric bill, you may be able to receive credits on your electric bill when your solar panels produce renewable energy that you do not immediately use. This policy called net metering is a great way to save money when you generate more electricity than you end up using. If you required some additional electricity from the grid that wasn’t offset by net metering credits, you will see the remaining charges on your bill.
Ultimately, solar panels can result in major savings over time. Data has shown that savings from switching to a solar energy system can result in $10k to almost $30k in savings over a 20-year period. One of the biggest factors when it comes to determining how long it will take for solar panels to pay for themselves is the cost of installation.
Continue reading to learn how much installing solar panels costs and some of the other benefits of switching over to solar energy.
Solar Panel Cost and Benefits
If you are trying to decide on whether to switch over to renewable energy with a solar energy system, it is important to understand how many solar panels cost. The total cost for solar installation can differ depending on how many panels you will need to generate energy for your home. Fortunately, the upfront cost of installation can quickly be returned once they start saving on their electricity bill.
A large portion of the cost of solar panels installation can be offset by the solar federal tax credit. The total amount of money you can save through the solar federal tax credit depends on when you install or plan to install a solar energy system.
- If you installed home solar panels between 2020 and 2022, you could claim a tax credit of 26% of the cost of installation.
- If you plan to install a solar energy system between 2023 and 2032, you could claim a tax credit of 30% of the cost of installation.
- If you plan to install a solar energy system in 2033, you could claim a tax credit of 26% of the cost of installation.
- If you plan to install a solar energy system in 2034, you could claim a tax credit of 22% of the cost of installation.
- The tax credit expires starting in 2035 unless Congress renews it.
Solar panels require minimal long-term expenses for maintenance so most of the cost is paid upfront.
You will also need to consider how much energy you consume regularly when calculating the total price of installing a solar system for your home large enough to cover that usage. You can find your total usage listed on your monthly utility bill. For example, average residential use is about a 5kW sized system which costs about $15,000 to $25,000 before any tax credits and incentives.
Another way to reduce solar installation costs, you should look for incentives from the government that can help you save money. In addition to the residential federal tax credit, you may be able to receive extra incentives such as cashback, waived fees, expedited permits, and more. In some states, residents who produce an excess of power have the option to sell electricity to their local utility companies.
Reducing Your Carbon Footprint with Home Solar Panels
Many people opt to switch to home solar panels to be environmentally conscious and reduce their overall carbon footprint. Although financial returns are a major incentive, solar energy is also a great way to help reduce damaging the environment through greenhouse gas emissions. Solar panels can not only save you money, but it can save the environment by reducing how much Carbon Dioxide is released into the atmosphere.
A simple way to understand it is to measure a 6kW (6,000 watts) solar panel system with the ability to offset the amount of fossil fuel emissions released by one automobile in a year. In short, switching to a unit of this size can be seen as “taking a car off the road”. If you reduce your energy consumption, you can reduce your overall carbon footprint even further.
Ultimately, switching to a solar energy system for your home can result in major financial savings and a reduction in carbon emissions. The main factor will be the cost of electricity where you live, but solar panels are generally a good investment in most areas. Switching to solar panels is an eco-conscious and financially beneficial investment in many cases.
