Residential solar systems are a sustainable alternative to traditional power sources that can help reduce homeowners’ monthly energy bills. They also offer significant long-term financial benefits by offsetting electricity costs and avoiding future rate increases.
Darwin Solar panels absorb sunlight and convert it into usable electricity through a process known as inverting. The generated electricity can be used directly to power homes or sent back into the grid for credit on electric bills through a process called net metering.
Cost-Effectiveness
Whether you’re a homeowner who’s been thinking about a solar power system, or a homebuyer interested in purchasing a property with this technology already installed, it’s important to know how cost-effective solar energy is. Solar energy systems offer several benefits that can significantly impact your financial situation, primarily in the form of reduced utility bills and increased property values.
As energy costs rise, homeowners have the option to invest in a solar power system that will help offset electricity prices and save them money over time. The amount of savings will depend on the home’s electricity consumption, the size of the solar energy system, and its power generation capacity. A homeowner can also choose to lease a third-party-owned system and host it on their rooftop, which will allow them to purchase the electricity generated at a discounted rate that is less than the price that utilities charge customers and ensures locked-in rates for years.
Ultimately, the decision to invest in a solar energy system will come down to personal goals, and the ability of the homeowner to finance the upfront cost and take advantage of the available tax incentives. A typical solar setup will cost around $18,000 for a residential property before accounting for tax credits and other incentives. The good news is that a residential solar system can typically pay for itself in less than five to eight years.
In addition to the savings on electricity bills, a home solar energy system can produce more electricity than is needed at times. This excess electricity can feed back into the grid and reduce the load on local power sources, which will benefit all residents of the community in the long run. Alternatively, unused energy can be used to pay off the utility bill by receiving bill credits for the extra energy produced.
In some states, utilities have a tariff that offsets the retail sale price of electricity at peak hours. This can significantly extend the length of time it takes for a solar power system to become profitable. However, regardless of where a homeowner lives, they can still benefit from solar energy through net metering policies and other incentives that allow them to sell any excess electricity that their system produces.
Environmentally Friendly
Unlike fossil fuel-based power plants, solar energy systems do not produce carbon emissions. A typical residential solar panel system offsets 100 tons of CO2 during its lifespan. Solar-generated electricity also makes the air healthier for everyone to breathe. Fossil fuel-related pollutants can trigger asthma and other respiratory issues.
The sun is a renewable resource that will never run out, so harnessing its energy helps conserve natural resources. By reducing our reliance on coal and natural gas, we can preserve the planet’s ecosystems and other essential natural resources for future generations.
Another way solar energy reduces environmental impacts is by minimizing the use of land. Large utility-scale solar facilities such as photovoltaic (PV) and concentrated solar-thermal (CSP) require between 3 and 10 acres of land for every megawatt of power. Home solar systems, on the other hand, are often designed to minimize land-use impacts, so you can enjoy a clean environment without disturbing wildlife habitats or soil and water quality.
A homeowner can also take advantage of solar power through an outright purchase if they have the financial resources. This option allows homeowners to avoid financing through an outside source and maximize tax credits. However, upfront costs can be significant.
Alternatively, homeowners can finance their solar system through a loan or a mortgage. This can help them save on their monthly power bills and build equity in their property. To qualify, homeowners must have sufficient equity and credit to secure the loan.
The most cost-effective way to get solar is through a lease or power-purchase agreement (PPA). These types of agreements allow homeowners to reduce their monthly utility bill payments and redirect that money to paying for a clean energy company.
Another way to finance solar is through a solar energy loan, which is available from banks and credit unions across the country. This type of loan allows homeowners to receive a low-interest rate and reduce their overall borrowing costs. Homeowners can also reduce their monthly utility bills by using a process known as net metering. This allows them to sell excess electricity to their local utility companies, further lowering their bills.
Increased Property Value
One of the main advantages of residential solar services is that they increase home value, especially if you purchase a system and own it outright. Like a new kitchen or finished basement, having solar panels is an upgrade that home buyers are willing to pay for. A recent study found that homes with solar energy systems sold for 4.1% more than similar homes without them. That’s a premium that can easily cover the cost of your investment if not more than it.
However, it’s important to note that the property value of solar depends on your location and local electricity rates. In areas where electricity prices are high, homeowners tend to place a higher value on having a solar system.
In addition, if your state offers net metering or other policies that allow you to sell excess electricity back to the grid, that can add to the overall value of your solar energy system. Similarly, many states offer tax incentives that make it more attractive to own a home solar power system.
If you have a lease and plan on selling your house shortly, you’ll need to get in touch with your solar company to find out how to transfer the contract to the next homeowner. Some leases may require the new homeowner to meet certain criteria, such as a credit check. It’s also worth mentioning that if you’re looking to move soon, it may be difficult to find a buyer who will want to take over your current lease agreement.
Fortunately, this problem is avoidable by installing an ownership solar system. If you’re thinking about going with a solar energy solution, be sure to consider whether or not the long-term benefits of your decision will outweigh the inconvenience of having to rework the arrangement with your home seller.
If you have any questions about the benefits of solar energy or are interested in exploring the options for your own home, contact us today. We’ll help you identify the best options for your specific situation and can provide a free estimate on your potential solar installation.
Tax Incentives
Depending on where you live, there may be local or state tax incentives available to help make solar energy systems more affordable. This makes a solar power system an excellent investment for homeowners, especially those in locations with higher electricity rates or seasonal rate changes that can make using conventional power more expensive than necessary.
In addition to lowering the cost of your system, these rebates can also reduce the time it takes for the panels to pay for themselves. The average solar payback period is between six to 12 years, and this can be further reduced by a variety of factors including energy costs, electricity usage, and the availability of rebates and tax credits.
The federal investment tax credit is one of the most common and worthwhile solar incentives. This tax credit covers a percentage of the total solar panel cost, which can then be applied to your tax liability to lower your overall bill. The credit can be claimed on a cash purchase or financed system and it also applies to any balance-of-system equipment, sales taxes, and even energy storage devices.
Other rebates and incentives may be available at the state or local level as well. For instance, the state has several beneficial solar incentives that can significantly lower your upfront expenses. These include a sales tax exemption, property tax abatements, and net metering programs that can reduce your utility bills.
Incentives vary by state and location, but many are only available to residents who meet specific eligibility criteria. In addition, residents can take advantage of additional state-sponsored solar incentives such as the incentive program. This rebate, which is based on income and installation costs, can cover up to 30 percent of the project cost. The rebate is awarded to qualified homeowners by their solar installation contractors. The program is overseen by the homeowners interested in taking advantage of this incentive should contact their local installer to learn more about eligibility requirements.