Solar panels are good for the environment and should save you money. But do they?
The short answer is ‘yes,’ solar panels save you money. How much money they save differs for each home as it’s based on a large number of factors. The two most important factors are your roof’s pitch and the number of hours of sunlight the roof receives.
Of course, another factor is the electricity rates in your area as they differ throughout the country. Overall, solar panels should save you money – here’s how to tell if they are right for you.
You’re Locking in Utility Rates
Here’s why you save money with solar panels – electricity costs. Homeowners that rely on grid electricity alone are subject to rising electricity rates. On average, electricity rates increase by 2.2 percent each year. With an average utility cost of $1,500 per year per household, that’s a significant yearly increase.
When you have solar panels and generate your electricity, there aren’t any increasing rates. You already invested in the panels – your expenses are done, except for the electricity you need from the grid.
If you want to maximize your savings – install solar panels large enough to provide 100 percent of the energy you need, or as close to it as you can get.
Net Metering – What is It?
Most homeowners with solar panels still receive an electricity bill. Since the sun doesn’t shine 24 hours a day, you likely need electricity during evening hours. That means you’re drawing electricity from the grid, just not as much as you did before solar panels.
But, there’s an incentive called net metering. Your solar panel generates energy, oftentimes more energy than you use in a day. That energy is sent to the ‘grid’ which offsets your electricity costs when you use electricity from the grid at night.
The electric company credits you for the energy you sent. There may be months that you receive a bill with $0 due because you sent back more credits than you used.
Tax Credits Help Too
They may not last forever, but for now, homeowners still get a nice tax credit for installing solar panels. As of 2020, the credit is down to 22 percent, but that’s still a significant savings on the initial installation of solar panels.
Saving more than Money
Solar panels are great for reducing electricity costs and that’s often a homeowner’s number one concern – however, there’s another large savings – the environment.
When you reduce your carbon footprint, you do good for the environment. Reducing the greenhouse emissions your home releases into the air helps improve the atmosphere.
Whether solar panels save you money or not depend on the electricity rates in your area, how long you’ll be in the home, and the total cost of installation. Look at all factors when determining if you’ll save money. Everyone saves at least some money but determining if it’s worth it for you is a personal determination that relies on these key factors.