Think about solar panel power if you have an expensive energy bill, reside in an ideal location, and are eligible for tax breaks and other financial savings.
The increasing cost of electricity from conventional sources makes solar installations appear to be a no-brainer for a lot of homeowners.
The actual price of solar panels and whether or not they’ll aid you to reduce your expenses is contingent on a handful of key elements. On average, the installation and the whole system could cost between $15,000 and $25,000, as per the Centre for Sustainable Energy.
The location of your home is a major factor in the electricity prices. The average national rate is 13 cents per kilowatt-hour, as per year-to-date data for 2021 obtained from U.S. Energy Information Administration.
Before you take the leap take a look at what your electrical bill, as well as the location of your home and incentives, will affect your finances in the long run. There are six steps you can consider to determine if you’ll be saving more than you pay for solar panels.
1. Review your electric bill using solar panel
Solar panels produce their own power, and can thus significantly lower your monthly energy bill even if you don’t entirely eliminate it completely. The more expensive your electric bill is, the more likely you are to benefit by switching to solar. It’s important to note that electricity usage and rates — the primary costs on your statement can fluctuate.
2. Evaluate your sunlight exposure
More sunlight is more energy generated and the possibility of saving money by using solar. Certain states, including Arizona and California, are more sun-lit days per year.
Your home’s position in relation to the sun, the amount of shade it receives and its roof’s type can also impact the output of a solar system. It is possible to estimate the efficiency of solar panels within your local area by employing this SolarReviews calculation tool. Enter your address, and the amount of the energy bills you pay each month.
3. Estimate residential solar panel cost
The largest expense associated with solar panels is the installation and purchase of the panels.
A small amount of long-term expense could offset the initial cost. “Most systems don’t require much maintenance and are designed to last for 20 years or more with little change to the amount of electricity produced,” Nilsen says.
When you are calculating the total cost takes into consideration how much energy you use regularly and your consumption is reflected on your utility bill each month — and the size of your system is able to produce the amount required. Certain tools, such as SolarReviews calculator, SolarReviews calculator, calculate the size of your system for you.
Installation-wise, a residential 5kW system will cost between $3 to five dollars per watt based on the CSE which is the range of $15,000-$25,000. The cost includes tax incentives or tax credits.
If you know the consumption of energy then you can estimate the amount you’ll have to cover the cost of solar panels.
Compare solar panels the same way you do for other expensive items such as a car, or television, suggests Vikram Aggarwal, the CEO of the marketplace for solar EnergySage. Certain companies reduce the cost of installation by offering rebates or other incentives.
Aggarwal advises you to get estimates from 3 to 5 contractors. EnergySage collects solar companies’ reviews, accreditations, Better Business Bureau profiles as well as other information to help you locate reliable companies.
4. Seek out incentives
The government provides homeowners with substantial incentives to install solar panel as an alternative energy source. For instance, a residential federal tax credit permits taxpayers to receive 26% of installation costs on systems that are put into service before December. 31st 2022. The credit will decrease to 22% by 2023 and will expire in 2024 unless renewed by Congress.
The federal tax credit is not refundable, which means you won’t receive the benefit through a refund. Instead, you’ll be able to reduce — or possibly even completely eliminate your tax bill.
Additional tax credits differ based on region. Based on the state you live in you could be eligible for additional incentives such as cashback, tax exemption for property waived fees, and speedy permits. In certain states, homeowners who have solar panels are able to sell excess power to utilities in their local area. Check out the credits that are available in your state, by looking at the list of state incentives for efficiency and renewable energy.
However, the benefits won’t last. “As solar becomes more affordable, state and local governments and utilities continue to diminish the types of incentives available,” Aggarwal says. “Incentives may truly disappear, and it may not be worthwhile to wait for too long.”
5. Be aware of trade policy
The changes in the trade policy of the government will also impact the price. In January of 2018 president Trump put a four-year tariff on solar cells imported from China and panels. It began at 30%. It was then set to decrease 5% per year up to February 2022. The 2020 rate of tariff in the 4th year of tariffs was increased from 15 percent to 18 percent. The increase in tariffs resulted in a 16c per watt increase for consumers on average for 2018. This translates into an overall increase of $960 for a 6-kW system, as per EnergySage.
The cost of imported solar panels will likely decrease, which could lessen the effect of tariffs in the long run.
6. Call the number
If you reside in an area that has the highest energy prices and a good solar rating and you can manage the initial cost It’s worth putting in solar panels at your home when the tax cut is in place to benefit the environment as well as your pocketbook. However, don’t expect to completely eliminate the power bill within a day.
If you choose to buy solar panels, do some research and find incentives. Be aware that you don’t need to purchase solar panel; they can be leased also. It’s a cheaper upfront cost, but because you don’t own the panels. They won’t increase the value of your house, and you might not be qualified to receive incentives.