Are Solar Panels Worth It?
Without question, the most common question we hear from potential customers is: “Are solar panels worth it?” If you listen to the sales pitches made by solar companies, you would think that solar power is all upside with no negatives to consider. Even though there are plenty of positives, solar installation still isn’t quite the slam dunk some providers would have you think it is.
Therefore, it’s important that we do our best to answer this question as objectively as possible. Before you dive into the world of solar power, let’s walk through a few key points to determine whether solar is the right solution for your specific energy needs.
The first variable is where you live, and there are several important aspects of this factor as well. For starters, not all locations are created equal when it comes to the amount of sunshine your home or business receives on a typical day. Depending on where you live within the United States, you could receive just four hours or less of daily direct sunlight (if you’re located in the Pacific Northwest), or you could receive roughly twice that amount in some parts of the Southwest.
Obviously, the amount of direct sunlight your home or business receives on average is a significant factor when deciding whether solar panels are worthwhile, but there are other factors as well. The most important of these is how much you currently pay for electricity.
Energy costs can vary tremendously from one part of the country to another, as power in some parts of New England can cost upwards of 20 cents per kilowatt-hour, while some other areas pay half of that rate or even less. Therefore, if you live in a location that doesn’t receive much sunlight and has cheap energy, installing solar panels might not be the best option for you.
The next aspect to consider is how much it will cost you to have a solar panel system installed. The variables in this area are numerous. Are you purchasing high-quality, expensive panels that will last for decades? Or are you opting for more affordable solar panels that may not last as long? While your initial costs will be lower if you choose cheaper panels, your long-term costs might skyrocket if you have to replace them too soon.
Does the government offer tax credits or rebates in your area? No matter where you live in the U.S., the federal government provides a solar investment tax credit (ITC), which has helped the solar industry grow and thrive since it was enacted in 2006. While this tax credit used to be set at 30%, Congress decided to start phasing it out in 2020.
Still, anyone installing solar panels in 2020 will receive a 26% tax credit, while consumers in 2021 will benefit from a 22% credit. However, starting in 2022, residential installations will receive no federal tax credit at all, and commercial installations will only receive 10%. With this in mind, it’s a good idea to get your solar panel system installed sooner rather than later!
As we mentioned previously, some states have their own incentives for renewable energy, so we recommend taking a look at the Database of State Incentives for Renewables and Efficiency to learn about the programs available in your area.
Another issue you’ll want to consider is how you’re paying for your solar panels. Will you purchase them and reap the full rewards of your energy savings? Or will you make a smaller up-front commitment and lease solar panels, decreasing both your level of investment and your long-term savings? A well-structured lease can reduce your monthly bill.
If you’re interested in buying solar panels, you should review the HomeStyle Energy Program. This program was launched in 2016 and it allows homeowners the option to finance solar installations as part of their mortgage when buying or refinancing their homes. Available through Fannie Mae, this program gives consumers the opportunity to make clean-energy upgrades that total up to 15% of the home’s previously appraised value.
Of course, different solar installers charge different rates for their services as well. It may be tempting to use one of the “big names” in the industry, but keep in mind that the biggest companies don’t always have the lowest prices or the best service. Make sure to check with several installers in your area before making a final decision.
So, are solar panels worth it? While the level of economic benefit varies based on your location, solar power is typically cheaper than other forms of energy, and the environmental benefits speak for themselves. If you still have questions, contact one of our LGCY Power Energy Consultants today. They’ll answer all of your tough questions to help you determine if solar panel installation is the right move for you.