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The total expenses and savings of solar panels depend on several variables. In the past few decades, home solar installations have become increasingly popular as people understand the role of solar energy in lowering your carbon footprint and monthly power costs.
However, your expected solar panel savings vary greatly depending on geography, product, and some other factors.
Learn how solar energy savings can be calculated for your home here.
How Much Do Residential Solar Panels Cost?
Based on recent data from the Center for Sustainable Energy, the cost of installing solar panels and their whole system can range between $15,000 and $25,000.
The cost of electricity varies by location. The U.S. Energy Information Administration’s year-to-date 2022 statistics show that the nationwide average is around 15 cents per kilowatt-hour.
Be sure to consider how the location, power bill, and local incentives may affect the pocketbook over time before you take the plunge.
How Do Solar Panels Reduce Costs?
Solar panels save you money by reducing the amount of power you need to purchase from a utility provider. Installing solar panels on your roof allows them to generate power.
An inverter receives power from solar panels, which is then delivered to your house to power up appliances. You minimize utilizing the grid by relying on the solar energy produced on the roof, which lowers your total electricity expense.
Solar panels may help you save money even after the sun sets if you live somewhere that offers net metering. Daytime is when solar panels produce the most power, perhaps more than the required amount for your house. The extra solar electricity is then routed back into the local grid and utilized to power the neighbor’s house.
The utility will compensate you for the additional energy you send to the grid under net metering, often in the shape of a bill credit. When the solar panels need to generate more energy to power all of the devices later in the day, the credit pays for the cost of electricity your house requires from the grid.
This implies that you may ultimately install sufficient solar panels to meet your total household energy needs and reduce your power costs. In rare circumstances, net metering might completely erase your utility charges!
How to Assess If Solar Panels Are Worth It for You?
There are some steps you can take to check if installing solar panels would be a cost-effective venture for you.
1. Determine Your Up-Front Expenses
It would help if you first made an educated guess about the size of your initial investment. You should factor in possible installation expenses, additional fees, and system costs when setting up the service. Look up local cost projections and continue from there.
2. Tax Breaks Are Beneficial
A one-time solar tax credit of 26% off the cost of a solar system may be obtained by homeowners. If the first solar panel investment in your location is approximately $20,000, the federal solar tax credit will result in a profit of $5,200 when you submit the next tax.
Additionally, some utilities provide rebates and incentives for installing solar electricity. If the local energy provider offers any incentives, do make the most of them.
3. You Must Be Aware of Your Monthly Power Bill Payment
The estimate is predicated on solar power providing all household energy needs. While some homeowners will be capable of getting all of their power from solar energy or perhaps even sell some excess energy back to the local grid, others will continue to pay their electric bills to cover any gaps in their consumption.
It will vary significantly from house to house based on factors like the number of solar panels placed, typical energy use, and more. Find additional calculators to determine the possible solar panel savings from your house here.
Now that you know the amount of energy you would save, go into the account with the electric utility provider and average the most recent power bills. If you can, go back a minimum of six months to consider the seasonal temperature changes and other price variations.
Suppose for the moment that you get all your energy needs from solar panels and that the monthly power costs are now, on average, $125 or $1,500 annually. You now possess the knowledge necessary to calculate the solar panel payback time.
4. Analyze How Much Sun You’re Getting
Additional sun equals more energy generated and more possibilities for solar savings. California and Arizona, for example, have more daylight hours on average than other states.
The solar system’s output is also influenced by the roof style, the amount of shadow the property receives, and the home’s direction toward the sun. Using a SolarReviews calculator, you may determine the effectiveness of the solar panels on the house.
5. Pay Attention to Trade Policy
Prices are also affected by shifts in government trade policies. In the past ten years, there have been a variety of levies on imported solar cells and panels that have impacted prices and supplies. As per EnergySage, tariffs led to an average customer price rise of 16 cents per watt in 2018; this equated to a $960 total increase for a 6-kW system, and the policy is still effective in 2022.
What Factors Affect Solar Panel Cost Savings?
Your solar panel system’s size is the primary aspect that influences cost savings. The savings increase with system size. A large enough solar array may generate enough electricity to power the house completely and still have excess energy to send out to the utility provider. While larger solar systems do provide significant cost savings, you still need to consider the additional costs that you would incur to get them installed.
So, does solar energy really save money? Well, yes! It does. But you have to consider the installation costs of solar panel systems and determine whether the payback time works for you.
Do keep in mind that this is a means of sustainably producing electricity. So, solar energy benefits more than just your wallet; it does wonders to help the planet too!