How Much Money Can I Save by Installing Solar Panels?
As electricity costs continue to rise, many homeowners think that installing solar panels can be one of the good ways to save money. However, whether or not solar panels will save you money and how much money the panels will save you will depend on a few different factors.
In order to fully understand how installing solar panels can help you save money and how much, there are some things you will need to review.
Determining If You Will Save Money Installing Solar Panels
Installing solar panels will cost you some money so you need to make sure that you are going to be saving money over time before you make the investment.
Review Your Electric Bill
Solar panels will help generate their own power and can offset your electricity bill or even eliminate it. The higher your bill currently is, the more you will benefit from switching to solar panels. It does help to note that electricity usage and rates are volatile. If electricity prices fluctuate then so can your savings. If your energy consumption changes then your savings will also vary. Your location will also affect electricity rates.
Look at Your Sunlight Exposure
More sun will mean more energy produced.
Certain states, such as California and Arizona, average more sunlight hours per day, which means you get more benefits from solar panels.
The amount of shade your home gets, the roof type, and the orientation toward the sun will also affect your panels' output.
You are able to estimate how well panels will do by using a solar estimate calculator.
Estimate the Cost
Most of the expenses with solar panels are the installation and the actual panels.
Many systems won’t actually require a lot of maintenance and are designed to last for 20 years or more. This means they won’t change the amount of electricity produced as the years go by. When you are figuring out the total cost of your panels, think about how much energy you typically consume and what size system will generate the amount you need.
It’s also best to comparison shop for solar panels just as you would for big-ticket items, such as a TV or car. Some companies will have lower installation costs through other programs and rebates. Before you settle on costs, be sure to get quotes from three to five contractors.
Look for Incentives
The government can offer you incentives for installing solar panels as an alternative. While federal tax benefits are nonrefundable, you can reduce and even eliminate the amount of money you owe on taxes.
Additional credits can also vary by location. Depending on where you live, you may get a property tax exemption or extra incentives. In some states, a homeowner with solar panels can sell excess power to local utility companies. However, benefits aren’t going to last forever. As solar becomes more affordable, city and state governments reduce the kind of incentives that are available.
What Determines Your Savings On Solar Panels?
There are some things that will play a bigger role in your savings for solar panels.
The Kind of Roof You Have
Solar panels will work best with durable and strong roofing materials, such as asphalt or composite shingles.
Your Local Climate
Solar energy can be generated in all sorts of climates. High-efficiency solar panels will covert both indirect and direct sunlight into electricity so these panels will work on even cloudy days. If your area is prone to severe weather then you want to check the durability of the panels you are considering installing.
How Much Sunlight Your Home Gets
It’s best to set up an appointment with an expert who can visit your home to look at the orientation, roof angle, and tree shading, in order to make sure that your home can get enough sunlight to meet your energy needs. How much sunlight your home gets is going to be an important factor if the cost of solar panels is going to be worth it. The more direct sunlight your home gets, the more power your panels will produce.
Advantages Of Solar Energy
There are a number of pros when it comes to installing solar panels.
Proven Technology
Solar panels are proven technology and it’s a source of clean energy that will continue into the future.
It Works in Many Climates
While some people think that solar panels won’t work in colder temperatures, that’s not the case. Solar panels can be efficient in cold weather since excessive heat actually reduces output voltage. Even though more hours of sun exposure does help create more electricity, panels can still generate energy in low-light situations.
Affordable
The price of solar has dropped a lot in recent years and prices continue to decline. Solar panels can even be less than conventional energy. With financial incentives available and a variety of financing options, it can be the right choice for you.
Benefits of the Whole Electricity Grid
Around the world, any extra solar energy is used by the traditional utility grid, which helps reduce the burden on the whole system. The solar panel owner may even be paid for this contribution. In many U.S. states, there are net metering policies. This is billing that pays solar users for their extra electricity and gives you a credit against the use of your electrical grid at night.
Long Lifespan
Solar panels can withstand harsh conditions and are durable.
Can Increase Home Values
Solar panels can increase your home value so not only does it give you benefits when it comes to living in your house but also when you plan on selling.
Disadvantages of Solar
Even though there are plenty of advantages to installing solar panels, you should also be aware of some disadvantages.
Solar Won’t Work at Night
If you plan on living completely off the grid, solar won’t work at night. While there are some solar companies that have battery storage solutions, batteries aren’t a widespread option for many homeowners. The energy needs to be used in real-time and the excess is given back to the utility grid.
Not Always the Best Look
Today’s panels are compact and can fit snugly against the roof but they are not always the most attractive option.
You Can’t Install the System Yourself
This is not something you want to handle by yourself. Professional solar installers have expertise in designing systems for businesses and homes. There may also be local permitting rules so, in order to make the process go as smoothly as possible, you need a professional to help you.
Not All Panels Are Created Equally
There are plenty of different types of panels on the market with different levels of durability, efficiency, design, and output. You need to do your research in order to find the right panels that are going to be the best for your situation.
How Do Solar Panels Work?
Solar panels are made up of solar cells. These cells are made with a negative and positive layer, which helps create an electric field, just like with a battery. When the sun’s photons hit a solar cell, they knock the electrons loose from the atoms. The positive and negative sides form an electrical circuit.
When it comes to your home solar system, the sunlight hits the solar panel and the panels convert energy to DC current, which then goes to the inventor. The inventor is necessary to convert the electricity from DC to AC, which you can use to power your home. It’s a pretty clean and simple process to give you more efficient electricity.
If you aren’t home to use the electricity your solar system is currently generating or you are using electricity at night when your system is not generating power, then you shouldn’t worry since you will still benefit from the system. During peak hours, the system will usually produce more energy than you currently need so excess energy is added back to the grid to be used somewhere else. You get credit for the excess energy your panels produce and then you use that credit to draw from the grid on cloudy days or at night.
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How Solar Panels Are Installed
The first step of installing solar panels is finding a solar installer. Once you find an installer there will be a home and site evaluation to determine the best types of solar panels and the components that you need. Once information is gathered in the second step then there is the design and permitting phase. The plan includes where your panels will go on the roof and how the system is connected. The design will make sure that you are compliant with local permits.
Once your permits are approved then the solar installation begins. This is actually the easiest part of installing solar. You may need to be present during this process so you can give the installers access to your roof and you want to make sure that if there are any pets in the home, they are safely secured. Solar installations can be done pretty quickly. After the panels are attached to the roof, the installer begins to clean up space and completes the inspections and interconnection.
Each county, city, and utility will have its own final inspection to make sure the system is installed correctly. This inspection process can vary depending on where you live and may take several weeks. Once the approvals are done the installer flips the switch and you start to see your electricity bill decline.
How Much Do Solar Panels Cost?
One of the first things you will need to ask is how much the actual panels cost. There won’t be a one-size-fits-all solution since every home is different. There are other variables, such as local tax incentives to consider and geographic variables. One of the things you can do to get an estimate is to contact a professional installer. The installer will look at your electricity bill and what your household uses and evaluates your home to figure out how many panels you need. They will also help you understand the incentives your community can offer to give you a picture of how much the panels will cost.
In addition to the panels, you are going to need to factor in the installation cost. The cost can vary by state, system size, and customer type. Some factors that will affect the cost are whether or not there are tax credits, how you are financing your system, and the characteristics and size of your roof. It can be possible to purchase a single solar panel for just about $100. However, a solar panel won’t work on its own. You need software and hardware to make electricity from the sun and you need more than one panel, cables, wiring, mounting hardware, and an inverter.
Once you have an estimate of your solar panel system then you will need to subtract what you currently spend on your utility bill so you can have an understanding of how solar impacts your financial situation.
How To Save On Solar Panels
One of the main ways to get help saving money on installing solar panels is to do your homework. You wouldn’t buy a car without learning about the features and comparing different models. Solar panels are going to remain on your roof for at least 25 years so you really need to do your research.
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Talk To Other Homeowners
Speak with other homeowners that have solar panels and how they are working in the area. Ask about the benefits and drawbacks and how long the installation took. Was the company easy to work with? Get Referrals
Search the company review sites and see if anyone has complained about misleading sales pitches, bad installation, or a confusing contract. Check with the state to make sure the company is licensed. A licensed contractor will need to carry insurance and you want to make sure that this is the case. Get Different Estimates: Along with getting different estimates, you want to make sure you are asking questions and don’t feel pressured to make any snap decisions when it comes to choosing a system.Learn What You Need
Systems are going to be sized based on your consumption, along with the space on your roof. The bigger the system, the more energy it will produce but the more expensive it is. This is why it’s necessary to learn what you need so you aren’t overpaying for a solar system.Don't Sign Unless You Understand the Whole Thing
This should include an expected return on investment and your break-even point.Know the Age Of the Roof
Solar panels will last about 25 years. If your roof is damaged or old then you should replace it before you install the panels.How Long You Will Stay In the Home
You won’t really know how solar panels increase the value of your home until you sell. You may want to stay put until the panels pay for themselves.Know Your Warranty
Most systems come with a warranty so you want to make sure that you understand this.Ask About Maintenance
Some panels need to be washed regularly and the company will give you this service for a certain cost. However, the rain will usually wash away routine dirt and bird droppings. Cleaning that is done professionally may be important in states such as California, Arizona, and New Mexico because they are dusty and dry.
Paying For Your Solar Panels
There are different ways to pay for your solar panels.
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A solar loan is a loan specifically designed to incorporate solar in your home. Solar loans are offered at many credit unions, banks, and loan companies. Those with low credit scores may qualify for the PACE program, which is a financing option that adds an assessment to your property tax bill.
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Solar leases work similarly to leasing a car. You pay a monthly fee and then a leasing company puts the panels on the roof and leases the services to you.
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Power purchase agreements are where you pay for the power the panels produce each month from a solar company, just like you would with a regular utility. However, you get a reduced price for the length of the contract. A solar company services and installs the panels. This is an option for those who prefer the convenience of a lease but only want to pay for the power from their panels. The savings are usually the same with a lease but could be different if there are a lot of cloudy days.
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With this option, you pay for your solar system outright and you get all the solar benefits without ongoing costs. This will give you the most savings.
To Sum up
Solar panels have a lot of benefits and a few disadvantages. When it comes to installing solar panels, you need to check a few things in order to make sure that you are going to get the most benefit and save the maximum amount of money. Some people and homes are better candidates for solar. If you want to save on installing solar panels, there are some things you can do. Once solar panels are installed you get to reap all the benefits.