Solar panels generate energy and help offset or even eliminate electricity bills. The amount you save depends on your average energy consumption, local electricity rates on the power grid and any rebates or incentives available in your area.
A 5-kilowatt system costs between $18,000 and $25,000 to purchase and install before tax credits. However, the minimal long-term costs can make up for the upfront investment.
Reduced Utility Bills
Solar panels generate their energy to offset, if not eliminate, your utility bills. But how much do solar panels save per month? You can save significantly each month depending on your system’s size and electricity rates.
The large black solar panels you see on homes and businesses are made of photovoltaic (PV) cells that absorb the sun’s energy to create a direct current of electricity. This electricity is then passed through an inverter to convert into a usable alternating current. Solar-produced electricity can be consumed immediately, stored in batteries for future use or sold back into the grid. Many states offer incentives to encourage the consumption of renewable energy.
The upfront costs of a solar system are high, but they will pay for themselves in just a few years with the savings on your electric bill. If you are still determining the upfront costs, consider a solar loan or solar leasing option. Whether you choose to buy your solar panel system or lease it, you will still benefit from the Federal Investment Tax Credit and local incentives to reduce the initial cost.
Increased Home Value
Home solar systems are more attractive to buyers than traditional electric bills, which can add up over the years. If your system is connected to the grid, you can sell any extra energy back to the utility company and increase your savings.
Solar power increases home value by reducing long-term electricity costs, allowing you to recoup your investment when it comes time to sell, and making your property more environmentally friendly. A rooftop solar system is especially appealing to environmentally concerned buyers, who will be pleased that your solar system reduces your reliance on fossil fuels and helps reduce greenhouse gas emissions.
A National Bureau of Economic Research study estimated that homes with solar energy systems sold for a 4% premium than similar homes without. However, this estimate needs to be more complex and consider the size of your solar energy system or other factors, such as your location or whether your local government incentivizes homeowners to switch to clean energy.
Solar systems are especially popular in states with abundant sun, and various solar options are available.
Reduced Carbon Footprint
Solar panels in homes and businesses are silicon semiconductors that create electricity by absorbing sunlight. The energy your solar panels generate can be used for any electrical needs you have at home — or sold to the local utility grid for credits or cash payouts through net metering. This can significantly reduce or even eliminate your electricity bills, allowing you to save money immediately and continue reaping the rewards over time.
Unlike fossil fuels, renewable solar energy does not generate greenhouse gases while creating electricity, and it’s one of the fastest-growing sources of power worldwide. That said, solar energy production has a carbon footprint produced by mining materials and manufacturing solar panels. Thankfully, this is diminishing as solar panel technology continues to advance. A recent study by NAU researchers found that solar power panels powered with a new type of solar cell known as a perovskite-perovskite tandem require less energy input to produce the same amount of electricity, resulting in fewer CO2 emissions than conventional cells.
Still, solar is an investment that will only be easily relocated if you decide to move. But, thanks to remarkable advancements in solar technology and $0 down options, homeowners can start reducing their electricity costs and shrinking their carbon footprint from day one — with little or no upfront investment.
Peace of Mind
Over the past 30 years, electricity rates have risen significantly. By investing in solar panels, homeowners can lock in a fixed rate for the life of their system, protecting them from future price increases.
In addition to locking in a fixed electricity rate, some states offer additional savings through solar incentives or programs such as net energy metering (NEM). This billing arrangement allows residential and commercial customers with solar panels to return any excess power they generate to the grid. When these credits are used to offset the cost of purchasing power from the utility, it can reduce bills even more.
Ty and his wife have been very careful about using a lot of electricity, but rising rates pushed them to investigate installing solar panels in their home near Atascadero. They’re generating significant power and are confident the system will pay for itself in 20 years or less.
When considering going solar, homeowners should look at their yearly electricity consumption and compare that number to the maximum kilowatt-hour output of a typical solar panel. They should also consider their location, which can impact sunlight hours, and their roof type and condition. Additionally, they should speak to their local energy company about the incentives available for homeowners who want to invest in solar.