How to Save Money With Solar Energy
Thursday, December 24, 2020, 6:00 AM | Leave Comment
Solar panels can save you money. They require minimal investment and protect you from increasing utility costs.
Many solar panel users get a complete return on their investment in less than eight years.
The system becomes profitable over the next 25 years. The amount of money you will save with solar power depends on where you live.
The following factors will influence how much you save.
Factors That Impact Solar Energy Savings
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Electricity Rates
If you live in a part of the country with high electricity rates, your savings will be greater. Energy rates vary from state to state and even fluctuate within states.
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Local Financial Incentives
Many states offer cash rebates and tax incentives for using solar panels. For example, New Mexico solar tax credits reward New Mexico residents who use solar panels. Incentives like SRECs encourage people to go solar.
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Solar Financing
Major companies offer solar financing, loans, and leases. Each option has its own value proposition and varying long-term return.
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How Much Can You Save with Solar?
The actual numbers may vary. But the following example illustrates basic savings without factoring in state or local incentives.
For example, your electric bill may be $100 a month. It increases by three percent each year. This factors in a net installation cost that subtracts the 30 percent federal tax credit.
In this scenario, your utility expenses for the next 20 years are approximately $25,000. That is what you would pay without solar.
Out-of-pocket, a basic solar installation will cost around $11,500. You are saving $100 on electricity each month. This equals $1,200 each year. In 10 years, you will have paid back the cost of the installation. The return on your investment is 10 percent each year. Over 20 years, you will save $19,000.
This is just a basic scenario. It does not factor in utility programs or state and local incentives that will minimize out-of-pocket expenses.
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Going Solar Increases Property Value
Studies show a three to four percent increase in home value by installing solar panels. Homes with solar panels sell for a higher rate than similar homes in the same neighborhood that do not have solar panels.
You can only increase your property value if you own the solar panels. If you lease solar panels, using a system like PPA, you are renting the solar panels. Since you don’t own the panels, they cannot be factored into the home’s value.
Not surprisingly, cities with high electric rates and strong solar incentive programs offer the highest return on investment for solar panels. This is great news for property owners who have solar systems. When it comes time to sell, they will recoup the initial cost of the system and receive a premium, maximizing their ROI.
The solar panel industry is creating comprehensive methods for determining the market value of going solar. These outline the financial value to properties that have solar powered systems installed.
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Going Solar Boosts the Local Economy
Besides the financial benefits of installing solar panels, the overall impact on the economy is positive. Solar energy is a national industry. It produces jobs across the United States. As more homes and businesses go solar, solar jobs in the country increase.
Since 2010, jobs in the solar field have increased by 167 percent in the United States. For the five-year time frame between 2014 and 2019, solar jobs grew five times faster than the rest of the economy.
Veterans perform eight percent of solar jobs in the United States. This is a higher proportion than what is seen in the overall economy.
Clean energy offers good pay for low and middle skilled workers. Solar power jobs pay more than similar industries. A mid-level solar installer in 2019 earned $23 an hour. This is compared to $18.58 for other US workers.
Solar installers are typically small businesses from the local area. Supporting these businesses adds money to the local economy.
Conclusion
Solar power is a major source of energy in the United States. As more people adopt solar power, the cost of producing it diminishes. This makes solar power more attractive to homeowners and businesses.
Solar energy is slowly accounting for a higher percentage of the US energy supply. This benefits the economy and the environment.
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