Are Solar Panels Worth The Investment?
There are certainly several considerations to determine whether solar panels are worth it. Do you live in a sunny location? Do you plan to live for many years in your solar-powered home? Are there tax subsidies available in your area to help you save on energy expenses? If all these factors check out, you may find making the switch to solar a worthy, long-term investment and here are 5 reasons why:
1. Free Electricity
If you look at your solar power system as a financial investment, you could expect it to generate annual returns ranging from 10 to 30 percent or more over time. While this may vary depending on your state’s incentives and tax rebates, on average it’s estimated that a solar power investment is paid off within eight years by slashing electric utility bills. Today’s solar panels last for upwards of 25 years, with few associated maintenance costs, automatically generating savings for more than two decades.
2. Increasing ROI
Residential electricity costs are setting new record highs! According to the latest report, the average monthly cost of electricity in the US hit 15 cents per kilowatt-hour in June, increasing the average American’s utility bill by 11% from last year.
Average electric bill costs differ, and some states are more affordable than others. Still, it does not matter which state you live in, because the cost of electricity increases every year. This means that switching to solar generates an annual return on investment as you save money on higher energy costs well into the future.
3. Federal, Local and State-Level Tax Incentives
As of August 2022, the federal government has offered a Solar Tax Credit to qualified residents. If you install solar energy equipment in your home any time this year through the end of 2032, you are entitled to a nonrefundable credit off your federal income taxes, equal to 30 percent of eligible expenses.
Some states offer incentive programs that may make installing solar panels worth the investment. For example, in California, if a solar system is placed in service in 2022, you will qualify for a 26% tax credit instead of 22%. You must purchase the system to claim the Investment Tax Credit (ITC). Depending on the cost of the system and the taxpayer’s finances, this could be reason enough to consider it.
4. Sell Surplus Solar Electricity
If your home generates more solar electricity than it needs, you can sell the excess back to the grid and make money. You receive monthly bill credits for that energy at the retail rate. For example, PG&E in California is running a Net Surplus Compensation (NSC) program for qualified residents per the California Assembly Bill 920 which allows state utilities to offer payment for surplus energy sent back to the electric grid by your home or business’ renewable energy systems.
5. Increase in Property Value
More and more property buyers want eco-friendly homes with a pre-installed solar panel system. With the growing concern for the climate and the rising cost of traditional sources of energy, the market is leaning towards renewable, solar electricity to boost property values. Solar shingles designed to blend in with your roof’s existing slates command top-dollar in today's home market.
Thinking about investing in solar panels?
Even if the initial cost of installing solar panels is more expensive than electricity purchased from a utility, investing now will help you avoid the increasing cost of energy in the future. And having peace-of-mind from independently generating clean and renewable electricity to power your home, is its own reward.
If you decide that going solar is right for your home, contact us for free advice. We help with the design and set up of solar panel equipment, installation, including financing and warranties.