So you’re thinking about adding solar panels to the roof of your house, but you’re not sure whether it’s worth the time, money, and headache? You’re not alone and you’ve come to the right place! In this article, we’ll break down the costs and benefits so you can make the right choice for you.
First things first, let’s start with the bad news: how much it will cost you.
What does it cost to go solar?
There’s no two ways about it. Solar panels aren’t cheap. The upfront cost can be quite a chunk of change (between $4,500 and $36,000, depending on your location, home and system).
Later on, we’ll talk about how much money they could save you in the long term, but we should be clear at the outset here – if you want to know how quickly solar panels will make back the amount of money they cost you, you should be thinking in years, not weeks or months. It’s an investment, just like buying a house.
That said, there are a few major savings you’ll see by the time you file your next tax return.
Tax incentives for going solar
Did you know the government wants you to go solar? There are both federal and state tax credits for homeowners who install solar panels.
A tax credit is when the government takes whatever you owe on your taxes that year and literally subtracts the credit amount. If you owed $10,000 and you received a credit of $5,000, then you actually only owe $5,000.
No matter where you live in the U.S., homeowners who install solar panels on their properties can expect to receive a federal tax credit for up to 30% of the cost of installing a solar panel system. Then, depending on where you live in the country, there may also be state and local incentives that you are eligible for. In some instances, the federal, state, and local incentives combine to equal more than half the cost of the solar panels and installation – that’s a huge discount!
Of course, it’s not like a regular discount where the amount is subtracted at the time of purchase. You get that money back when you file your taxes, but it’s still a pretty significant amount of cashback in your pocket.
You don’t have to pay all at once
Don’t have thousands of dollars lying around burning a hole in your pocket? We get it! That doesn’t mean solar power is out of the question. Many solar installers offer financing options that let you pay over time, like a mortgage.
Solar companies also often offer leasing or power purchase agreements (PPAs), where you pay a fixed monthly amount based on the estimated amount of electricity the system will produce. This can be a great way to get started with solar without a large upfront cost. If you go this route, though, you are not eligible for any tax credits.
Big savings on your energy bill
Here’s where the magic happens! Once your solar panels are up and running, they start generating free energy for you, saving, on average, about $1,500 in annual savings on your monthly electricity bills if they cover all your energy usage.
That means, over the life of your solar panel system, which can be as long as 30 years, you can see savings of around $45,000, surpassing the initial cost of the solar panels.
Imagine a life where you no longer dread your electricity bill’s arrival. Instead, you’re watching the numbers drop month by month, all thanks to the power of the sun. It’s not a dream—it’s a reality for many homeowners who have made the switch to solar.
If you’re also thinking of making the switch to a heat pump, the addition of solar panels can really maximize your energy savings.
Boosting your property value
Another financial perk of going solar is the potential increase in your home’s value. Homes with solar energy systems often sell for more than comparable homes without solar power, with some buyers paying up to $15,000 more for solar-powered homes.
Buyers are increasingly aware of the benefits of solar energy and are willing to pay a premium for a solar-equipped home. This means that even if you decide to sell your home down the line, you could recoup your investment and potentially even make a profit.
So not only could you be saving on your monthly electricity bills, but you could also be making a smart investment in your property.
The bottom line: Is solar cheaper than electricity?
So, is solar the right choice for you? Only you can say for sure, but we’ve given you the tools you need to figure out the math. Here are the key questions you need to ask yourself:
- How much will the panels and installation cost? Reach out to several local solar installers to get quotes.
- How much money can you expect to get back in tax credits or rebates?
- How long do you expect to stay in your current home? The longer you’re planning on staying, the more worthwhile solar will be.
- How much do you currently spend on electricity? Remember, you can expect to save an average of $1,500 per year.
- Will you need a loan or can you pay for it outright? If you need to get a loan, you’ll want to check interest rates to make sure the monthly payment isn’t more than you are already paying for your regular electricity bill.
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