Is Solar really worth it? What are the savings from Solar Panels? And will you actually save money?

Assuming your home meets the criteria outlined in Part 1 (suitable for solar, utility charges 12 cents or more per kWh, and sufficient space for solar panels), here’s a breakdown of the potential savings from solar panels and whether it’s worth it:

Savings from Solar Panels:

1. Electric Savings: A well-designed solar system with enough solar panels can reduce your monthly electric bill by at least 90% or more. After going solar, most homes will have an average monthly electric bill of $10 or less. To calculate your electric savings, gather your last 12 months of electric bills, focusing on the electric section. Add up the dollar amounts you paid each month, then multiply that total by 0.9 to estimate your new electric bill after going solar. The 90% savings assumption is based on having enough solar panels; if you can’t fit all the necessary panels, your savings may be lower.

2. Tax Credits: Customers who purchase their solar panels are eligible for a one-time federal tax credit of 30% of the solar system’s cost. You can claim this tax credit on your federal income taxes. If your tax liability is less than the credit amount, you can spread the credit over the next 2 or 3 years.

3. State Incentives: Many states offer additional incentives for solar, which may include Solar Renewable Energy Credits (SREC’s), state tax credits, rebates, and property or sales tax abatements. These incentives can vary significantly from state to state.

Is Solar Worth It?

Whether solar is worth it depends on several factors, including the type of solar program you choose:

1. Purchase: If you can afford to pay for the solar system upfront, it can be a highly beneficial investment. You’ll recover your initial investment through electric savings, tax credits, and state-based financial incentives. Payback periods typically range from 5 to 15 years, depending on your state’s incentives. After that, you’ll continue to save on electricity for another 20 to 25 years.

2. Financed: Financing your solar panels means you’ll have lower upfront costs and monthly loan payments for 5 to 10 years. However, your monthly electric costs are likely to be 40% to 60% lower than your current electric bill. Once your loan payments are complete, you’ll continue to save on electricity and enjoy other incentives.

3. Lease/PPA: Renting a solar system through a lease or Power Purchase Agreement (PPA) typically results in monthly rental payments for the next 15 to 20 years. While your rentals will be 20% to 30% lower than your current electric costs, you won’t benefit from tax credits or own the solar panels.

In conclusion, solar panels can lead to significant savings on your electric bill and provide various financial incentives, such as tax credits and state incentives. The choice between purchasing, financing, or leasing/PPA depends on your financial situation and long-term goals. Overall, solar can be a worthwhile investment that not only saves you money but also contributes to a cleaner and more sustainable energy future. However, it’s essential to consult with a local solar installer to fully understand your state’s specific incentives and make an informed decision.