Jessica PirroJanuary 23, 202024391
But when looking at the cost of solar panels, and figuring out how much money they will save you is going to depend on a few key factors. Before getting a solar panel installation, here’s how your electric bill, location, and solar incentives can help you save over time.
Look at Your Electric Bill
Solar panels are going to generate solar power and can immensely impact, if not completely offset your monthly electricity bill. The higher your electricity bill is, the more likely you will benefit from a solar panel installation. You should keep in mind that electricity rates and usage and the main charges on your statement are liable to change.
The location is also going to play a huge role in affecting electricity rates. The national average is going to be 12.95 cents per kilowatt-hour. If you live in an area with higher electricity rates, the more you’re going to save by generating your power from a solar power system.
Study Your Sunlight Exposure
The more sun you get means, the more energy your solar panel installation will produce and the more potential savings you will have with solar power. States like Arizona and California are prime states for solar power systems because they average more sunlight hours a day. But they aren’t the only states where getting a solar panel installation is going to make sense.
Your home’s direction towards the sun, the amount of shade your rooftop gets and its roof type can also affect a solar power system’s output. An ideal orientation for a solar panel installation is going to be a south-facing rooftop.
Estimate the Cost of Solar for a Residential Solar Panel Installation
Solar panels aren’t going to cheap. When you factor in the solar panel installation, an average 5 kW solar power system is going to cost between $3 and $5 per watt, or $15,000 to $25,000, before the solar energy tax credits and solar incentives.
However, in the long run, the cost of solar is minimal, making up for the upfront expenses. Most solar panel installations aren’t going to require a lot of maintenance.
When you are calculating the total cost of solar, consider how much solar energy you regularly consume and what size solar power system is going to generate the amount of solar power that you need.
Some solar companies are going to offer lower solar panel installation costs through solar rebates and other solar incentives. It is recommended that homeowners should get quotes from three to five solar installers to find the best deals.
Search for Solar Incentives
The government offers significant solar incentives for homeowners who are interested in getting a solar panel installation. The federal investment tax credit offers taxpayers to claim 26% of installation costs for solar power systems installed throughout the 2020 year, the tax credit will fall to 22% 2021 until it expires December 31st, 2021.
Additional solar energy tax credits will vary based on location. If your state has a high solar energy ranking, you will most likely receive additional solar incentives, like cashback, property tax exemption, waived fees and expedited permits. In certain states, homeowners with solar panels can sell the excess solar power their solar panel installation generates to their local utility companies. You should look up the solar energy tax credits that are available in your state.
The Trade Policy
Changes in government trade policy are also going to impact the cost of solar. In January 2018, President Trump imposed a four-year tariff on imported solar panels, which started at 30% in 2018 and would drop by 5% each year through 2021. The tariffs were also placed on solar power inverters as well. However, at the beginning of 2020, the United States and China have begun phase 1 of trade negotiation.
Solar Panels Can Create Big Savings
Regardless if you’re looking at the finances or the carbon emissions, solar panel installations will generate a lot of savings for homeowners. The 20-year electricity savings from solar panels can be significant, ranging from the low end of $10,000 to nearly $30,000. As mentioned above, the deciding factor is going to be based on the cost of electricity, which will significantly vary depending on where you live. A good rule of thumb is going to be if you live in a state with middle - to upper-level utility rates, solar panels will be a risk-free investment that is going to offer you major returns!
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