With the cost of electricity increasing steadily, many homeowners see sense in investing in solar energy systems.
Homeowners who invest in solar panels can enjoy many benefits, including reduced electricity bills, potentially higher property values, and reduced carbon emissions. These benefits, however, are offset by the sizable cost of installation and maintenance, and the gains made vary significantly from one home to the next.
Before investing in a solar power system for your home, you should consider the initial cost of installing solar panels. On average, buying the entire system and installing it can end up costing $15,000 to $25,000. The exact cost will actually depend on your home’s specific needs, the company installing the solar panels, and the state in which you live.
How Does a Solar Energy System Work?
Also called photovoltaics (PV), solar panels capture sunshine and turn it into electricity. You can then feed this electricity into your home’s central electricity supply.
Solar panels consist of numerous cells made with layers of a semi-conducting material, usually silicon. When the sun shines on solar panels, they generate renewable energy for your home and create a flow of electricity.
The electricity your solar panels produce can power any home appliances you’re currently using. Then you can send any unused electricity back to the grid and get paid.
What’s the Initial Cost of Installing Solar Panels?
Buying and setting up a solar power system is the biggest part of the initial investment, and there are also additional startup expenses. You’ll need batteries, which could cost as much as $10,000 or even more, and an inverter, which might cost at least $1,000. After installing the solar power system, you’ll need to cover their maintenance costs, which might be about $400 per year.
Before going for a solar power system, you should do a thorough site survey to identify and work out any extra costs related to the project, including roof replacement, electrical upgrades, tree removal, and utility factors. You may discover that you’ll need to repair or upgrade your roof to accommodate the panels.
What Affects Solar Panels’ Cost?
Several factors determine the total initial price of solar panels and whether they’ll be a worthwhile long-term investment.
Your home’s location plays a crucial role in the viability of solar panels. If your area receives plenty of sun exposure all year round, you’ll benefit more from a solar power system than others. According to the data analysis website Stacker, the ten states that get the most sunlight exposure in the U.S. are:
While many locations in states such as Arizona, California, and Texas are perfect for setting up a solar energy system, your system may not produce enough power if nearby buildings or trees shade your home.
All in all, the more sunlight exposure your solar panels get, the more energy they’ll generate, and the quicker will your solar energy system be able to pay for itself.
The Installation Company
The solar power installation company you pick will affect the initial installation cost, as will the price of local contractors. Also, larger national solar installation firms may have different prices than local startups. Before making your final decision, evaluate your options and get several quotes.
State Tax Credit
Different states offer different state tax credits. The top 10 states that offer the highest incentives for solar power system installation include:
Federal Tax Credit
Homeowners may receive federal tax credits once they install solar panels. For solar systems installed in 2022, homeowners will receive a 26 percent tax credit. Systems set up in 2023 will receive a 22 percent tax credit.
The design of your roof will also determine the viability of your solar energy system. As such, it’s best to invest in a roof with a vast surface area featuring only a few chimneys, skylights, or other features so you can have your panels installed with ease.
The best roof slope for installing solar panels is 30-45 degrees. Anything beyond that will pose installation problems for technicians and lead to higher costs of labor and additional costs of mounting equipment.
Solar panels produce energy and can significantly lower your monthly electricity cost or even do away with it. The more you pay for electricity, the more likely switching to solar power will benefit you.
However, it’s important to note that electricity usage and rates—which contribute to most of the bill—fluctuate from time to time. In other words, if electricity rates fluctuate, so might your amount of savings. Likewise, if your energy usage changes, it can also affect your amount of savings.
Should I Invest in Solar Panels?
Yes, you should. If you have high electricity bills and live in an area with lots of sunlight at the moment, it could take five years for your solar power system to repay your investment in energy cost savings. Other homeowners might need to wait 10-20 years for their system to repay the initial investment.
Overall, a solar energy system will eventually benefit most homeowners—it could take a couple of decades for this to happen. Whether it’s worth your while to set up a solar system, therefore, typically boils down to a few less technical reasons like:
· The subsidies on offer in your area
· Whether you want to play your part in conserving the environment
· How long you’re going to live in your home
Benefits and Drawbacks of Installing Solar Panels
Of course, solar energy has its own pros and cons. However, the high initial cost may be offset by the decrease in your carbon emissions and the environmental benefits of installing solar panels.
· May qualify you for some tax breaks
· Produces green energy that decreases your carbon footprint
· Net metering policy lets you sell back the extra energy generated
· Solar works only when the sun’s shining
· High costs involved in installation and maintenance
· Parts of the solar power system need replacing every few years
· Homeowners may miss out on certain tax breaks if they’ve expired or will expire soon
When Should I Install Solar Panels?
It may seem counterintuitive, but the perfect time to set up solar panels is during winter. There’s obviously less demand for installation services at this time, so it should generally cost you less to install your solar power system.
Even if your area tends to be cold and cloudy, your solar panels can still produce energy. In fact, in some cases, they’ll even make more power than they would during warmer months.
Apart from being cost-effective, installing solar panels during winter is efficient. With solar system installation companies doing fewer projects during the off-season, they’ll likely install your panels fast, and they’ll be up and running shortly.
Are Solar Panels a Worthy Long-term Investment?
After paying the initial cost of buying and installing solar panels, you’ll eventually realize several financial benefits. Find out what your utility provider or city offers since many give credits that pay you for the surplus energy your solar panels produce. Moreover, the net metering policy in most states lets you sell back any unused electricity.
Most installation packages from solar power installation companies offer financing options, and you can get a payment schedule with fixed monthly payments that are less than your current energy bill.
With the best financing option for your specific home, you can start seeing savings right away with a lower monthly payment than your average utility bill. Solar is generally the cheapest type of energy. How much you will save will depend on several factors in your local area, including state and federal tax incentives, your solar power system’s size, and the cost of electricity in your area.
Will Solar Panels Eventually Pay for Themselves
It takes around 9-12 years for a solar energy system to pay for itself.
As time ticks away, you may recoup your initial investment and then continue enjoying savings in utility bills. How long your solar panels take to pay for themselves will depend on factors like the total upfront costs, amount of sun exposure in your area, and incentives offered in your area.
If your area often experiences power outages, your solar panels could keep your house running. In this regard, solar panels could be considered a worthy investment that will eventually pay for itself.
Whether you want to lower your carbon emissions, electricity bills, or both, you can make significant savings from investing in solar panels. In many areas, solar energy is an excellent option from a financial point of view.
Overall, solar energy can be costly, especially since it comes with upfront installation and maintenance costs. However, the efficiency it provides in the long-term can more than make up for the initial investment, significantly saving your utility bills for many years to come.