In 2021, the US will become home to over 3 million solar panel installations. That number will surpass 4 million in 2023.
Considering solar energy started just a few decades ago, it’s clear that the popularity of solar energy has grown tremendously in recent years.
But does it always make sense to install solar panels? Solar installation can set you back between $11,144 and $14,696 after solar credits. When you’re investing that much in solar, you want to be sure you’ll get value for your money.
In this guide, we outline five factors to consider so you make the right decision on whether solar is worth it for you.
1. Review Your Current Electric Bill
The current solar revolution is majorly due to the rising cost of energy from traditional sources. Given that solar panels generate their own power, investing in them can significantly offset your monthly energy bills. If your current electricity bill is high, then installing solar panels makes a lot of sense.
Note, however, that how much you save per month by switching solar depends on the electricity rates in your area and your power usage. If the electricity prices and your energy consumption fluctuate, so will be the amount of savings.
2. Determine How Long You Intend to Live in Your House
Note that it’ll be several years before your solar energy panel investment pays off. Sure, you’ll experience an immediate reduction in your power bills, but as we mentioned in the beginning, solar panels and their installation don’t come cheap.
It takes time to recoup the total costs of the project.
If you’re going to live in the same home for the long-term, then it’s a perfect idea to invest in solar panels. On the contrary, if you’re the type of person who’s constantly on the move, then it may be a better idea to look for other ways to cut energy costs instead of investing in solar. For instance, you may want to consider switching your light bulbs to LED ones.
3. Evaluate Your Home’s Sunlight Exposure
More sunlight exposure means that solar panels can produce more energy, which translates to greater potential to save with solar. That said, solar installation still makes sense even if you’re not in states that average more sunlight hours daily.
Other aspects that may affect your solar panels’ energy output include your home’s orientation towards the sun, its roof type, and the amount of shade the roof receives. If each of these aspects is perfect, then you can expect more efficiency from your solar system.
4. Your Financing Options
Generally, you can choose between purchasing solar panels or leasing them. The choice you make will have a significant impact on the long-term value of the system.
Homeowners with enough money to pay for solar panel installation in cash save more than any other financing option. But even using a solar loan to make the purchase can save you thousands or more in the long run.
Opting for a solar lease or a power purchase agreement (PPA) can be an attractive option for solar panel buyers as neither option requires you to put money down in the beginning. But the trade-off with these options is that your overall savings can be as little as 10 percent of your current electricity bill.
5. Consider Available Incentives
One of the greatest attractions of solar energy is that the government provides significant incentives to homeowners who opt to switch to solar. Homeowners can claim a residential federal tax credit, which is a considerable percentage of the installation costs.
Note that this credit will expire at the end of 2021, so this is the perfect time to invest in solar if you were planning to. Moreover, the credit is non-refundable, so you can’t get your savings in the form of a cash refund. However, you get to reduce or eliminate the amount you currently owe on your taxes.
Depending on the state, homeowners who install solar panels may be able to receive additional incentives. These incentives include property tax exemption, cashback, expedited permits, and waived fees. In certain states, you can even sell excess power to your local utility companies.
To know which credits are available in your location, review the database of state incentives for renewable energy. Note that, like the federal tax credit, these additional incentives aren’t guaranteed to last. If incentives are a huge part of your decision-making when considering the switch to solar, it won’t pay to wait too long.
Quick Tips for Solar Shoppers
Does investing in solar panels sound like the best move for you? If so, we’ve prepared two tips to help you make the best decision when choosing both your solar panels and installation contractors.
Get Multiple Quotes
Solar panel installation is a big-ticket purchase, so it only makes sense to do enough research before signing any papers. Conduct a thorough review of solar companies in your area, and get at least three quotes from reputable installers. Doing so helps you avoid paying inflated prices often charged by some large installers in the industry.
Get Familiar With Permits
Before you install solar panels, take the time to read relevant information about building permits. Ignoring the appropriate building permit is simply risking a hefty fine and being asked to re-do the entire system. It’s a costly, unpleasant affair.
Typically, building permits are issued at the local level, so it shouldn’t be a hassle to get one. You can apply to your municipality.
Before You Install Solar Panels, Know Whether It’s Worth It
The decision to switch to solar energy is a huge one. Before you join this growing revolution, it pays to assess whether you stand to save money once you install solar panels. If, after considering all relevant factors, solar panel installation makes fiscal sense, then don’t wait too long to make the switch.
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