From property value boosts to getting a discount on your electric bill, homeowners across the country are turning to solar panels to fill a greater portion of their home energy needs. If you’re a new homeowner, you might be considering the benefits of adding a solar system to your home yourself.
Perhaps you’ve been planning to install them for a long time, and you finally have the time and money to do so. Perhaps this is the first time you’ve looked into the idea of powering your home with solar energy. Wherever you fit in the spectrum, it’s important to get all of the facts on renewable energy before you commit to a solar panel installation to be sure that you’re getting the right value for your money. Read on to learn everything you need to know about solar panels, what they cost, and who should consider this popular source of renewable home energy.
What are the Benefits of Using Solar Panels?
Solar panels are photovoltaic cells mounted on a framework that is then installed on your roof and integrated with your home’s electric system. Solar panels isolate energy created by the sun’s rays and transfer it to your property for use by your family. This allows you to rely on your local electric company for a lower percentage of your energy needs, saving money on your electric bill while also saving the environment.
Here are a few of the biggest benefits that homeowners take advantage of when they use solar energy to power their properties.
If you install solar panels as the main source of energy in your home, you will no longer have to rely on power plants as much, which are mainly powered by fossil fuels. You can enjoy the fact that you power your household with clean energy. In making sure a percentage of your energy comes from the sun, you will reduce your carbon footprint, and eventually, you may even generate more energy from the solar panels than you as a homeowner actually end up using each month.
Investment Tax Credit
Two years ago, the U.S. Congress passed an act that gives Investment Tax Credit (ITC) to homeowners who install solar panel systems on their property. The act will give the homeowner a 26% tax break on their income taxes for any solar panel systems installed in the years 2020-2022, and for systems installed in 2023, the tax break is to be 22%.
Monthly electric bill will decrease dramatically
You will likely notice a decrease in your electric bill the first month or two after solar panel installation. Not only will your home’s power come from the sun, but it’s very possible that your home’s solar panel system will generate more power than it consumes. If that’s the case, you could even get rebates from net metering or become a zero net energy residency.
Net metering is when your home has more energy generation than energy consumption, and that energy is therefore fed back into the power grid. Your home essentially becomes a tiny power plant that is energy efficient enough to produce more energy than it uses. You may just eliminate your utility bills entirely if you don’t use much energy or if you have a smaller property.
Increase the value of your home
If you ever do need to sell your home complete with a solar energy system, it can increase the resale value of your property. Solar panel systems increase the value of your home by around $9,000, depending on the age of the system and the amount of energy it produces. Even if you aren’t planning on living in your current home long-term. Learn more about The Best Solar Panels for Your Home.
What are the Disadvantages of Using Solar Panels?
While solar panel systems come with a host of benefits for your property, they also have a few notable drawbacks. Make sure you consider the following points before you decide to book your solar installation.
If you would like to power your home with clean energy but you don’t live in a sunny area, solar panels might not be the way to go. You can consider other forms of renewable energy sources like wind power if your home gets less than five hours of full sunlight per day.
Solar panels still absorb sunlight on cloudy or rainy days, and days of full sunlight can make up for those days because excess energy that is collected can be sent to battery storage in your solar panel system like the Tesla Powerwall. However, solar batteries are sold separately from your main solar system, which means that adding a battery will come at an additional cost. You’ll need to consider this extra investment if you live in an area known for frequent overcast.
Check out: Best 12V Solar Battery Chargers.
High upfront costs
If you’re purchasing solar panels yourself, it can be a costly investment even with the incentives and the federal tax credit. This is why so many businesses and even homeowners choose to let solar companies perform the installation so they don’t have to pay anything upfront. These companies earn money while you get to save on your energy bills, which means that they’re incentivized to keep prices low. Still, the average cost of a solar energy system can be upwards of $20,000, which most homeowners will need to finance in some capacity.
Because there is not a large amount of long-term information about the effects of discarded photovoltaic panels on the environment, we’re still not sure how the materials used to make solar panels impact our planet in the long run. Producing and then discarding solar panels can be compared to purchasing an all-new electric car when your ten-year-old sedan was just fine. It’s all about long-term environmental impact, because unfortunately, these materials can cause pollution if discarded carelessly.
Who are Solar Panels Best Suited For?
While anyone can benefit from solar panels, the upfront cost and other drawbacks make them not ideal for every situation. The following users will get the most value from their solar panel installation.
People with smaller homes
If you have a small home that doesn’t use much power, investing in a solar panel system can actually end up saving you money. By simply covering one plane of your roof with solar panels, your home solar energy system can power your entire home and you will still have energy left over that you can store in a solar battery or that goes back into the power grid.
People who live in suitable environments
Photovoltaic panels are hardy and tested to withstand strong winds, heavy rain, and even two-inch hail. However, if you live somewhere where these weather phenomena are frequent, solar energy may not be the best choice for you. High sun exposure and minimal winds are the best conditions for solar panels to absorb energy, and this will allow them to be the most efficient for your home.
Learn about The Top Solar Friendly States.
Businesses who have the capital
If you’re a business that has the upfront capital to purchase and install your own solar panel system as the primary source of energy to your building, this can be a great way to take advantage of solar tax credit benefits. If you only operate commercial activities in your business space and you own the building, your solar investment might even be considered a deductible business expense.
Even if you can’t deduct the cost of your system from your commercial taxes, you will eventually see a return on investment for your purchase of a clean energy system. Your business will see nearly instant results with the savings on your power bill. The average payback period for solar panel systems is six to ten years, so before you know it, you will have paid for your system.
How Much Do Solar Panels Cost?
Most solar panels cost between $2 and $3 dollars per watt. That means that the average cost of a solar panel system can range from $4 to $10 per square foot. Most homes need about 20 to 30 15-square-foot panels to create an energy-efficient system that covers a large enough percentage of their in-home energy needs to justify the high upfront cost.
For a 5-kilowatt-hour system, which is standard, you need to make sure you have 300 square feet of available space. For a 10-kilowatt-hour system, you’ll need twice that. There are several factors that can change the cost of an individual solar panel, including the following.
|Cost factor||How it influences solar panel price|
|Efficiency||More efficient panels produce more energy, increasing the price|
|Warranty||Opting for a longer warranty increases your system cost|
|Type of cells||There are multiple types of solar cells; monocrystalline cells tend to be more efficient, causing them to cost more|
|Raw material cost||The cost of raw materials like silicon is constantly changing; shortage periods may result in higher prices|
|Location||If you live in an area that gets a large amount of overcast, you’ll need more panels to generate energy, increasing the cost of your system|
|Roof type||Shingled roofs and ribbed roofs require specialized racks to attach your solar panels, leading to a higher cost|
Solar Panel Costs
The average cost of solar panels is anywhere from $4 to $10 per square foot, as we mentioned above. But what accounts for that cost difference between panels of different solar power systems? The following factors are a few of the details that will influence the price that you pay for your solar panel system.
Energy efficiency is measured by the energy usage it takes to perform a particular task. A solar panel is more efficient if it uses less energy to provide the same amount of electricity to your home than another solar panel uses. The more efficient a solar panel is, the more it costs.
Solar energy providers give you at least 25 years on your solar panel warranty — some give 30 years as a general inclusion. However, some of these warranties are limited, if any damage or malfunction is caused by human error, this renders these warranties void. Most, however, are unlimited for decades, which means that the solar company will make any repairs and perform maintenance needed on your solar power system. If you buy a panel system with a longer or more robust warranty, you’ll pay more for your panel system.
The price for raw materials needed to produce photovoltaic cells and lithium batteries for solar power systems fluctuates depending on market factors out of our control. If in one year the materials are difficult for manufacturers to acquire, this will raise the cost of solar panels.
Solar Panel Installation Cost
Beyond the cost of the actual panels that make up your solar energy system, you have to be prepared for the installation costs as well. What factors affect the price of installing your solar panels? The following will play a role in the price companies charge to install your panels after purchase.
The trickier your roof is to navigate, the more it will cost you to have your solar panel system installed. If the pitch is at an awkward angle for those who have to go up there, they will definitely charge you more. If there are obstacles on your roof, like skylights or windows, this will add to the installation cost.
If your roof is ready to be replaced, it’s best to go ahead and do so before you have a solar panel system placed on top of it. This is because if and when you decide to replace your roof, the solar company that installed the panels will need to remove them from your roof while the roof is undergoing repairs or replacement. This process will come at an additional cost, which is why it’s a good idea to seek roofing repairs or replacements before you begin exploring the potential of solar power.
Solar panel systems are not illegal in any state. However, some states and HOAs make it difficult for residences to install solar panel systems. Even though the tax credit is a federal incentive, states are still free to come up with any restriction, like additional taxes or energy caps, to discourage the use of solar panels. These laws are mostly instituted to benefit local utility companies at the expense of homeowners.
Even though solar panel systems are more affordable for homeowners than they’ve ever been before, depending on where you live, state restrictions may make installation nearly impossible. For example, Kansas utility companies are allowed to financially penalize homeowners for taking advantage of net monitoring programs, while Oklahoma utility companies can charge homeowners for requesting net monitoring.
Other system parts
If you want to be able to store excess energy your solar panel system produces, you need to purchase at least one battery, and that means you also need an inverter. This inverter keeps the energy flowing into your power system level, without spikes and drops. The batteries allow you to use electricity even when the system isn’t collecting much, like on cloudy or rainy days.
The average U.S. household pays between $15,000 and $20,000 for both the solar panels and the installation of the system. For further information on your state’s rules, restrictions, and incentives, you can check out the Database of State Incentives for Renewables & Efficiency, funded in part by the U.S. Department of Energy.
Can You Get Solar Panels for Free?
No, solar panels are never truly “free.” You either purchase them yourself and pay for the installation or a solar company installs them for you. Then you essentially pay the solar company monthly energy fees for using the system while they get the solar incentives and tax credits. You’re still paying someone something. If you pay for and install them yourself, you’ll be paying off a solar loan, which usually takes around six to eight years.
If you have a solar company install your solar panels for you, you never actually own the panels. They own the panels, which is why they reap the rewards of federal incentives from the installation and use of the solar panels. You pay them for up to 25 years under a PPA, or a “power purchase agreement.” You pay the solar company (or even your local utility company if they’re the ones who own the panels) each month for the energy you use each month.
Although solar panels will never be free, there are plenty of inexpensive solar panel options on the market.
How Efficient are Solar Panels?
As we mentioned earlier, efficiency has to do with the amount of energy it takes to accomplish a task. A more efficient solar panel consumes less energy to provide power to something. Most solar panels have about 15% efficiency, but some brands go all the way up to almost 23% efficiency. This means that they turn 23% of the energy they absorb from the sun into usable electricity for your home or business.
There have been advancements in laboratory solar cell efficiency by using them in tandem or stacking them on top of each other. One lab even achieved almost 50% efficiency with a six-layered cell, according to Popular Mechanics. However, household technology like that is still years away, and 15 to 22% efficiency per cell is more than enough to power a home.
How Much Does Solar Save on Energy Bills?
The solar savings you can expect from installing a solar panel system on your property are significant, adding up to paying for your system twice over the next 25 years. The average U.S. household with a solar energy system saves $1,500 annually on energy costs, and this only increases the longer they use the system. This is why having a solar panel system can add value to your home and make it more desirable to buyers should you have to move.
How Long Do Solar Panels Take to Pay for Themselves?
Because the average cost on the lower end of the spectrum for a solar panel system is about $16,000, and the average family saves $1,500 per year on their electricity rates after installation, this calculation gives us about a decade before solar panels pay for themselves. Some homes pay them off in six years or more than ten years — it depends on the energy efficiency of the panels and how much electricity they use. You must also consider the incentives and tax breaks that come with solar investment. The simple answer is about ten years.
How Long Do Solar Panels Last?
Scientists don’t yet have an average idea of how long homeowners can expect their solar panel systems to last. We know that solar panels cannot last forever, but we also know that solar panels manufactured decades ago are still in working order today. Just like any machinery or appliance, they do need maintenance, but solar panels are built to last, and warranties start at 25 years. In fact, 25 to 30 years is the industry standard life expectancy for a solar panel, but there are solar panels still maintaining efficiency that were installed in the 1980s.
How Many Solar Panels Do I Need?
The answer to this question will vary depending on the size of your home and the size of the panel itself. For residential use, most solar companies will install a five-kilowatt-hour system, and the panels in this system are 15 square feet in size. You will normally need about 20 of these panels, but you can install more if your home is larger or if you’re powering multiple buildings.
Where to Buy Solar Panels
Are you ready to learn more about the benefits of investing in a solar panel system for your home? Consider exploring the following options when it comes time to invest in a panel system.
Learn about Leading Solar Panel Providers.
Bottom Line: Are Solar Panels Worth it?
If you live in a state that has few restrictions on solar energy and long, sunny days, solar panel systems are a huge benefit. If you can afford the installation yourself, you won’t be beholden to a solar company with a monthly PPA, and you can rest assured that after a decade, your solar energy system will be paid off.
If you have the capital or the good credit to secure a solar loan, if environmental sustainability and the discontinued use of fossil fuels are important to you, and if you live somewhere you can power your home efficiently using the sun then solar panels are definitely worth it. However, the upfront cost simply isn’t feasible for many homeowners to cover. If you’re looking for a long-term home improvement project but can’t invest in a solar system just yet, be sure to monitor continuing changes in federal and state tax incentives to make sure you’re investing at the best possible time.