Are Solar Panels Worth It? | Eco Energy Services
Is Solar Worth It? Find Out If Solar Power Is a Good Investment for Your Home
What’s your opinion about solar power? That’s a lot like asking what you think about the sun. Pew research found an overwhelming majority of Americans, 89 percent, are in favor of expanding the use of solar power. Out of those surveyed, 40 percent of homeowners have seriously considered installing solar panels. The primary reason they have for wanting to go solar is to save money on utility bills. Secondarily, they want to help the environment.
Despite the vocal support, only 4 percent of the homeowners who participated in the Pew survey have actually installed solar panels. People may like the idea, but for the average homeowner, the question is, are solar panels worth it?
Calculating the ROI of Solar
Solar panels are an investment. When you invest in solar, you can expect a return. To determine your return on investment (ROI), the first thing you’re looking at is the cost of solar panels and installation versus the cost of electricity.
Determine the Cost of Electricity
The cost of electricity differs state-by-state, which has to do with the source. Power plants nationwide generate electricity from a variety of sources, including coal, natural gas, hydroelectric dams, and wind farms. The U.S. Energy Information Administration reports that a number of factors also come into play, such as the cost of running power plants and transmitting power, as well as weather conditions, and government regulations.
The actual cost of electricity varies minute-by-minute. You can look at your power bill history to determine what you pay on average. You pay per kilowatt-hour, but what you’re wanting to do is look at your payments for each bill and get a yearly total.
Add up your totals for an entire year and divide that number by 12. This is your average cost of electricity per month. The more months you’re able to look at combined, the more accurate your estimate. But keep in mind this number will change because electricity prices continue to rise yearly.
Estimate the Cost of Installing Solar Panels
Now it’s time to compare the cost of electricity and the cost of solar systems. One easy way to do this to get a free quote on what you can save by going solar. All you do is send us your electricity bill, and we provide you with a list of options regarding your potential savings. We do all the legwork for you.
Another way is to look at the cost of a solar lease in your area. With a solar lease, you pay no upfront cost. Instead, you pay monthly like you do with a regular electricity bill. Search for solar panel providers in your area and contact them about what you’ll pay monthly. Compare their numbers with your average monthly electricity cost. Or, Google’s Project Sunroof can give you an estimate of your savings. It will look something like this:
Keep in mind that if you buy the solar panels upfront instead of leasing them, you can take advantage of the solar investment tax credit, which is a 30 percent deduction on income taxes. With this incentive figured in, here’s what the cost to you may look like over 20 years:
Initially, your cost is $10,000 after incentives. But as you can see, the total 20-year cost is only $1,000. Compared to paying an average of, say, $90 per month for regular electricity, you’re looking at savings of $20,600 in the long-term.
Long-Term vs Short-Term: The Full Value of Solar Power
In the short-term, the upfront cost of buying solar panels is definitely something to consider when you’re asking if solar is worth it. Plenty of people can’t afford $10,000 upfront, which is why solar leases have become popular.
In the long-term, one advantage is that you won’t be subjected to the ever-increasing utility rates for electricity. It’s best to go solar now because electricity rates could continue rising by as much as 4.5 percent per year. If you buy or start leasing solar panels sooner than later, you’re not going to run up against rate increases. For a lease, you’ll pay a set fee per month. No more guessing how much you’ll need to pay for electricity in the months to come, and no more paying for dirty energy.
In the long-term, if you buy your solar panels now you’ll definitely pay less for power over the course of 20 years. What’s more, you’ll increase the value of your home.
How Solar Panels Affect Your Home Value
Are solar panels worth it? Once you see what they do to the value of your home, it’ll be hard not to make the investment.
Buying solar panels for your home could increase its value by $15,000 or more. Researchers from Lawrence Berkeley National Laboratory looked at sales data from 23,000 homes in eight states, 4,000 of which were equipped with solar panels. Overall, buyers were willing to pay a $15K premium for solar homes. The study was conducted more than a decade ago. The study sample consisted of houses sold between 2002 and 2013.
Since the cost of electricity is now higher in many states, solar panels could increase your home’s value by even more than $15K. Appraisers take solar panels and the market in your area into account when they’re appraising your home and determining its market value. One very attractive factor for buyers is the environmental impact of solar panels.
The Environmental Benefits of Solar Power
Beyond the question of whether solar is worth it, there’s the question of just how much clean solar power for your home can help the environment. Using solar power keeps you from relying on power plants, which generate greenhouse gas emissions. In that sense, you’re limiting air pollution. You’re also limiting water pollution. Power plants need to use water in their operations, which pollutes the water, while solar power does not affect water supply. Furthermore, you’re keeping fossil fuels that plants use to generate electricity in the ground where they belong.
But what are some actual numbers on solar energy’s environmental benefits from a single family home? Using Project Sunroof’s calculator for a home located in Somerville, MA, the breakdown looks like this:
For this particular home, getting solar panels would be like removing 0.6 cars from the road in a year, or 12 cars in 20 years. Over the course of 20 years, you’d keep 58 metric tons of carbon dioxide out of the air. Overall, installing solar panels would have an environmental impact equivalent to growing 147 tree seedlings for 20 years.
Is Solar a Good Investment?
Why not invest in the sun? You’ll be helping the environment, adding resale value to your home, and saving on electricity bills. Solar is worth it because there’s no doubt you can trust it. The sun won’t stop shining and creating energy. Meanwhile, dirty energy will get more and more expensive as fossil fuels become less plentiful and governments enact regulations and provide incentives to keep them in the ground.
Not everyone can handle the initial cost of buying solar panels. That’s why a solar lease or a power-purchase agreement (PPA) are attractive prospects. Yet, if you don’t buy your panels, you could be stuck with high monthly payments for the lease or PPA. Look into solar loans for no upfront payment and a low monthly payment, so you can own your panels outright, add resale value to your home, and reap the long-term rewards.
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