The benefits and perks of solar energy are often well-covered, but the expensive up-front costs associated with a solar photovoltaic (PV) system may have you confused. You might be asking yourself, are solar panels worth it? We at the Home Media reviews team have researched the best solar companies in the United States to help you learn which homeowners will benefit most from installing a solar system and find which solar panels and installers are worth it. On Average, Homeowners Save $5,000–$20,000 with Solar Panels
When Are Solar Panels Worth It?
There are various ways solar panels pay off, from reducing your carbon footprint to increasing your home’s value. The National Renewable Energy Laboratory (NREL) found that homes with solar power increased in value by $20 for every dollar saved on energy. That is a 20-to-1 return on investment (ROI).
There are, however, some instances when solar panels may not yield as high returns as you want. According to Garrett Nilsen, the deputy director of the U.S. Department of Energy’s Solar Energy Technologies Office, local electricity rates, your total system cost, and whether you pay up-front, take out a loan, or lease your system can all affect your ROI. Changing compensation patterns with your local utility or an unexpected lapse in a system’s performance may cause your payback period to take longer. In these rare instances, Nilsen advises engaging with your installer to understand the expected production or why it’s not matching their estimate.
Here are some factors to help you maximize the value of your solar investment.
Location
The location of your home plays a vital role in the value of a solar power system. If you live in a part of the country that gets lots of sunlight exposure throughout the year, you will get more out of using solar panels than others. Though states like Florida, Texas, California and Arizona are excellent regions to install a solar system, solar panels may not generate enough energy to be worth the cost if your home experiences a lot of shade from trees or other buildings. Additionally, roofs facing south, southwest or west (in the northern hemisphere) receive more direct radiation from the sun, so the panels will generate more solar energy.
Your Home’s Roofing
The size, shape, and slope of a roof are also important factors to consider. According to Garrett Nilsen, the deputy director of the U.S. Department of Energy’s Solar Energy Technologies Office, roof structures can be one of the biggest roadblocks to going solar. “If there are trees near your home that create excessive shade on your roof, rooftop panels may not be the most ideal option,” he says. “Solar panels perform best on south-facing roofs with a slope between 15 and 40 degrees, though other roofs can be suitable too. Installers can model roofs to determine if the orientation and slope are suitable for energy generation.” Steep roofs make installation challenging and can increase labor costs or require additional mounting equipment. Roofs with plenty of surface area and few obstructions — such as skylights and chimneys — are ideal. You can still add solar panels to smaller roofs but should choose more efficient panels, such as monocrystalline panels, that generate more power using less space.
Local and Federal Tax Incentives
Solar tax incentives and rebates are offered on the federal and state levels. For example, the federal tax credit offers a 30% credit on installing residential solar systems through the solar investment tax credit (ITC). Other solar incentives vary from state to state. For example, Florida offers homeowners the Property Tax Abatement for Renewable Energy Property. This incentive adds more value to your solar installation through a 100% property tax exemption for residential renewable energy property, as well as an 80% property tax abatement for nonresidential renewable energy property. We encourage you to use the Database of State Incentives for Renewables & Efficiency to learn what other rebates and solar tax credits are available in your state.
Energy Consumption
Before installing solar, you should take stock of your monthly energy consumption. According to the U.S. Energy Information Administration, the average household uses around 893 kilowatt-hours (kWh) per month. A residential solar setup produces anywhere from 350 to 850 kWh per month. Therefore, you can save as much as 95% off your utility bill. If you experience higher electricity rates, switching to solar will likely be a good investment. However, if your home does not require a lot of energy consumption to operate day-to-day, you may not save enough to balance the installation cost. You should also reach out to your local utility company to see if they offer an established net-metering program. Net-metering is a billing tool in which the energy produced by your solar energy system is sent back out to the grid. The amount of energy produced is also deducted from your energy bill, saving you money and providing clean energy for your community.
How Much Do Solar Panels Cost?
The price of solar panels varies by brand and retailer. However, solar panels only make up a fraction of the total cost of installing a solar system. Ongoing maintenance and additional equipment, like inverters and solar batteries, make up the remaining solar panel system costs The total cost of solar panel installation varies from property to property. The Solar Energy Industries Association reports that the average cost of a residential solar panel system has dropped by an annual average of more than 60% over the past decade. In 2021, a standard 6-kWh system costs between $16,000 and $21,000 for professional installation and equipment.
