Installing residential photovoltaic systems, or residential solar panels used to cost homeowners a whopping $50,000 about 10 years ago. With enhanced technology, the cost of going solar has gone down roughly 60% in recent years.
With the average price being between $16,260 and $21,410 today, along with the benefit of tax credits, homeowners are rushing to have solar panels installed at their homes. But the affordability of the technology doesn’t necessarily mean going solar is going to benefit every homeowner.
If you’re wondering whether residential solar panels are worth it for your situation, keep on reading. We put all the information you’ll need together in this article.
Saving Money with Solar Panels
Keep in mind that the amount of money a homeowner can save by going solar tends to be dependent on where they are located. This is because various factors affect the amount that’s spent on utilities throughout the states.
The first step to getting a saving’s estimate is to calculate how much money you spend on electricity annually. Here’s an example: The average amount of electricity that was used in the average United States household in 2017 was 11,000 kilowatt-hours (kWh). When you multiply that by the average electricity rate that year, which was $0.13 per kWh, you will see that American families spend about $1,430 on electricity.
Next, you have to take fluctuating prices into consideration. This will help you come up with an estimate for electricity in upcoming years. In the past decade, the cost of electricity has changed each year.
After that, you’ll need to think about your solar panels. Some people are able to offset their electricity use 100% with their panels, while others still have to use a small amount of electricity. The outcome you prefer here can determine how many solar panels you will need.
In order to discover more about costs and how many panels will be necessary for you to meet your utility bill goals, set up consultations with a few companies before choosing which panels to buy. This will help ensure that you’re making the most cost-effective decision.
Are Residential Solar Panels Right for You?
Solar energy is a renewable and sustainable energy source that never runs out. Solar panels are a great way to cut down on your utility bills while also decreasing the size of your carbon footprint. But having them installed can cause more harm than good for some homeowners.
How do you know if solar panels are a good option for your living situation? Here are some questions you should be asking yourself to help make the right decision.
Will the Panels Have Access to Direct Sunlight?
This is the most important factor you should take into consideration because if there’s no access to direct sunlight, your solar panels are going to be useless.
For instance, if you have a lot of trees on your property, the chances of you reaping the full benefits of having a solar panel are very slim. This is because trees provide shade which, of course, will block the sunlight from coming in direct contact with your panels.
If your home is only partially shaded, the panels can be installed in a way that will avoid the shaded areas. You might even be able to add more panels to make up for the parts of your roof that tend to stay in the shadows.
Some homeowners have cut trees down in order to enjoy the use of solar panels, which is another factor you should take into consideration.
Have You Made Other Upgrades to Make Your Home More Efficient?
If you have problems such as leaky air ducts, subpar insulation, or drafty windows, you should address making those repairs to try to save energy before installing solar panels. These types of fixes are usually cheaper than the panels would be.
Plus with the upgrades made, you’ll need less solar panels installed on your roof, which will be less expensive for you.
How’s Your Roof?
The lifespan of a roof depends primarily on what materials were used during the building process. On average, a standard asphalt shingle roof lasts homeowners 20 years or more.
Before you even consider installing solar panels, you need to check on the health of your roof first. If it will need repairing or replacing within the next few years, it wouldn’t be worth it to install panels at this time.
It can cost you $2,000 or more to remove your solar panels so that repairs can be made to the roof. This pricing doesn’t even include the amount of the actual roof repair.
What Does Your Homeowners Association Say?
Solar access laws are enforced at a state level, so the answer to this question will vary. You will need to check the solar access rights for the specific state where you live.
If your state says you need approval from your homeowner’s association (HOA) prior to installing solar panels on your property, it’s possible that they can restrict you from installing them. In the cases where solar panels have been restricted, the majority were because of the glare and other appearance complaints.
However, if you live in a state where there is a solar access law, your HOA doesn’t have any legal authority as to whether you can install panels or not. In these states, you’re free to do what you want.
How Do You Plan on Paying for Your Solar Panels?
If you don’t want to put a lot of money into this project up front, you can choose to lease your solar panels. This option is becoming more popular among homeowners who would like to save money and decrease their own responsibility for the solar panels.
As part of a lease, the company you’re renting your solar panels from also maintains them for you. This means that if a panel is damaged in a storm, for example, you won’t be fiscally responsible.
However, the downside is the price of some leases can increase over time. Additionally, you might end up spending more money by making monthly payments for leased solar panels.
Take your time and compare your options before making this purchase. Will leasing, using a loan, or purchasing your solar panels in one transaction work best for your current financial situation and future goals?
Also, keep in mind that larger companies tend to inflate prices compared to smaller contractors for the same work. Additionally, whether you lease or buy can impact the value of your home.
What Are the Chances of Your Home Being Sold in the Near Future?
If you plan on selling your home sometime soon, having solar panels can either add to the home’s value or cause you a few headaches.
If you choose to lease your solar panels, they don’t add to the value of your home. So, by selling the house, you will either have to cancel your agreement early which can cause you to have to pay penalty fees. Or the person purchasing your home can take over the lease.
The problem here is what if the person doesn’t qualify to take over? Or what if they simply don’t want to deal with the paperwork from leased solar panels?
On the other hand, if you own your solar panels, they can add to the price of your home. This, however, isn’t as easy as adding the cost you spent on the solar panels to the price of the house.
Instead, the amount of money that’s saved on utilities throughout the remainder of the warranty will go into effect. Solar panels save homeowners roughly $80 each month in utility costs on average.
If there are 15 years still left on the warranty, the solar panels can add $14,000 to your home’s appraisal.
Have You Read Up on the Federal Tax Credits?
You can receive a federal tax credit if you choose to go solar. The rates will decline every year, so the sooner you do this, the better.
For example, the credit is at 30% right now. But after 2019, it will go down to 26%. And then down to 22% in 2020.
After 2021, you will no longer be able to receive a credit.
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