While solar energy has plenty of benefits, there are also high upfront costs associated with installing a home renewable energy system. So, at the end of the day, are solar panels worth it?
If you want to minimize your ecological impact while reducing or even eliminating monthly utility bills, solar panels may be well worth the money. But they may not be the best solution for every home. In this article, we'll review solar panel costs, longevity and return on investment to help you decide whether they're right for you.
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How Much Do Solar Panels Cost?
The first thing to be aware of is that installing a residential solar system is always going to be expensive. Yes, saving money on your monthly utility bills can help balance that startup expense, and you can get some incentives to help undercut the cost of solar panels (more on that in a moment). But ultimately, there's no way around it: Investing in a residential solar system can be pricey.
How pricey, exactly? Your total solar energy system cost will depend on a myriad of factors, including the type of solar panels you choose, the number of panels required for your home, and the specific solar panel installation company you hire.
With that said, according to Sunrun, the average cost of installing solar panels in 2021 is between $16,200 to $21,400. And it's worth noting that this actually represents a significant drop in the price tag for solar panels. Solar installation is becoming more and more affordable, even if the startup price remains a little daunting.
Offsetting the Cost of Solar Panels
Something else to be aware of is that, over the past decade or so, both the federal government and many state governments have unveiled programs to provide financial incentives for solar installation. These programs include local and federal tax credits and other rebates. Top solar companies are usually able to help you identify and apply to any programs you are eligible for.
The current federal solar tax credit, called an Investment Tax Credit (ITC) provides a 26% credit for systems installed between 2020 and 2022. State incentives can be added on top for even more savings. However, even with numerous solar incentives, pricing and solar panel installation costs can still be steep.
How Long Do Solar Panels Last?
As you think about the initial startup investment in solar panels, another question to consider is system longevity. After you buy solar panels, how long do they last? Will they function long enough for you to get your money's worth?
Again, the answer can vary slightly depending on the specific type of solar panels you choose. As a rule of thumb, however, most residential solar systems last between 20 and 30 years and require only the most minimal maintenance and upkeep. Most of the best solar panels come backed with fairly rigorous warranties, ensuring your system holds up for at least two decades. Of course, when purchasing a solar panel system, you'll want to take a close look at the warranty information offered.
The longevity of your solar panel system can also add to the value of your home. According to the U.S. Department of Energy, buyers nationwide have been willing to pay an average premium of about $15,000 for a home with a solar array. In many cases, that alone can cover most of all of your solar investment.
How Much Money Will You Save With Solar Panels?
Related to the question of panel longevity is the question of a solar power system's return on investment, or ROI. How much power is a home solar system going to generate? How much money will it save you? Will month-to-month electric bill savings mean that your solar system "pays for itself" after a few years?
The amount of money you save on your monthly utility costs can vary depending on the efficiency and power of your solar panels, as well as your household energy consumption habits. Keep in mind that your savings will be greater if you live in an area where electricity rates are higher; by contrast, if you live somewhere with a lower cost of electricity, the money you save from going solar may be comparatively meager.
EnergySage notes that, over the lifespan of your solar system, you're likely to save anywhere from $10,000 to $30,000 on utility costs. This may or may not be enough for the unit to "pay for itself," though an upside of solar power ROI is that it's fairly instantaneous. Once your system is installed, you'll be able to start saving money right away.
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Are Solar Panels Worth It for Your House?
Ultimately, whether solar panels are worth it will need to be evaluated on a case-by-case and home-by-home basis. Simply put, solar power is a smarter option for some than for others. The question is, how can you tell whether you're a good candidate for solar panels?
Best Candidates for Solar Power
Solar panels tend to be a better investment for homeowners who meet the following criteria:
- Ample exposure to sun: If you live in a part of the country that gets lots of exposure to sunlight throughout the year, then you'll probably get more mileage out of your solar panels. It's little wonder that solar power is most popular in places like Arizona, Texas, California and even North Carolina.
- Accommodating roof space: A good solar system will require plenty of surface area on your roof, unobstructed by skylights, chimneys or other fixtures. With a smaller roof, you can still potentially install a system, but you'll need to find the most efficient solar panels (which are often more expensive) to maximize your limited space.
- High electricity bills: The amount of money you save by going solar will be directly proportional to the amount you spend each month on electrical costs. So, if you live in a community where the price of electricity is pretty high, you stand to achieve greater savings when you go solar.
Who's Not a Good Candidate for Solar Power?
By contrast, some homes may not be as well-positioned to reap a high solar power ROI.
- Homes without much sun exposure: If you know anything about how solar panels work, it won't be a surprise that darker areas benefit less from this renewable energy source. In a place where there tends to be a lot of cloud coverage or more limited solar exposure for good chunks of the year, the jump to solar may not be as advantageous.
- Homes with too much shade: Similarly, if your roof tends to be shaded for long stretches of the day (for example, if your home is in the shadow of a larger building or a lot of dense trees), then your solar panels may not get the sun exposure they need to generate a solid ROI.
- You pay lower costs for electricity: If your electrical bills are already fairly minimal, then installing a residential solar system will yield more modest and measured savings.
- You don't have the right kind of roof: Certain types of roofs just aren't as well-suited for solar power installation. For example, older or historic homes that have particular kinds of tiled roofs and homes that have larger skylights may not be good matches for solar energy.
How to Determine Your Solar Power ROI
Is solar worth it for you and your household? There are a few steps you can take to weigh solar energy pros and cons and make an informed decision.
One option is to consult with a solar panel installation company that can assess your roof and your positioning in relation to the sun, then supply you with a basic estimate of how much money you could save by installing solar panels. Reputable installers can also provide greater detail about the different types of solar panels that are available and recommend the technology you'll need to realize a significant solar power ROI for your home.
Even before you take the initial step and meet with a solar installer, a number of solar companies offer online calculators, which you can use to estimate your monthly utility savings. We'll stress that these calculators only give a very rough estimate and should be taken lightly, but they can still create a basic sense of whether solar panels are worth it for your home.
So, Are Solar Panels Worth It? It All Depends...
The bottom line for homeowners: Solar energy represents one of the best ways to reduce your dependence on traditional utility companies. And for many homeowners, solar power ROI will be well worth it. With that said, the startup cost can be prohibitive, and not every homeowner will achieve the same bang for their buck.
As you consider whether solar panels are a sound investment for your home, make sure you take into account cost, warranty, longevity and overall efficiency, all while seeking guidance from qualified solar experts.