The cost of electricity is continually rising as the cost of home solar panel systems decline every year. Investing in a home solar installation is a better financial decision than it’s ever been before. The actual cost of install and the amount of money you can save, however, depends on many important factors.
Before making a decision, research your current electricity plan stipulations, the suitability of the are you reside, and how local and federal incentives can impact the total cost of a solar installation.
Look Over your Electricity Plan
Solar panels generate electricity during daylight hours on their own and can entirely offset your power bill every month. The more expensive your electric rates are currently, the more you can save from switching to solar. Electric usage amounts and kWh rates frequently fluctuate month-to-month and since it is generally the main expense on your power bills, the amount you will save each month varies.
As power prices change, so too does the amount of your potential savings. Also, if the amount of energy your household consumes frequently varies by the month, the amount of savings you attain by going solar may surge and deflate accordingly. The location of your home also significantly affects electricity rates along with the amount of sun/shade you receive.
Conduct a Solar Evaluation of your Home
If you live in an area the gets more sun, more power can be generated each day (and vice versa), and you’ll have more savings potential by switching to solar power. Your roof’s orientation in relation to the sun, your roof type, and the amount of shade your home receives on average also greatly affects solar panel electric output. Your neighborhood’s solar efficiency rating can be calculated by using a Solar Estimate Calculator tool online. Enter your zipcode, your home’s energy efficiency rating (which they help you calculate), and details about the roof area you wish to install the panels on.
Initial Cost of a Residential Solar Installation
Despite the downward price trend, solar panels can still be rather expensive. According to UK Power Ltd, “The standard solar PV costs associated with any installation depend on your system’s brand, efficiency and power generation capability. Standard costs include:
- Equipment and installation costs of between £2,500 and £15,000 depending on the size and quality of your system. (A typical 3.5kWp system, which has the potential to provide you with up to 75% of your electricity needs, costs around £6,500.)
- A fee of between £60 and £120 for an Energy Performance Certificate, which you need before you can receive payments under the Feed-In Tariff (FIT) scheme.
All these initial costs can be offset against future profits, and financial assistance is available for those who need it.”
The long-term power expenses of your home will help offset the initial installation expenses. High quality solar panels often come with 20+ year warrantees and don’t require much maintenance to operate at optimal efficiency. When calculating out all of the install expenditures, look over your power bill and consider how much electricity you normally use each day on average and decide on a suitable size and kWh production rating for your solar panel system. Ideally, your system should generate enough electricity to cover your needs most days.
There are many different solar panel installers across the California so be sure to shop around and compare installers the same way you would for other expensive items, like a car for example. Remember, solar companies are competing for your business and will often offer lower install costs through money-back rebates or other incentive programs. Get a quote from at least 3 to 5 installers before making a final decision.
Cash In on Government Incentives
Tax credits and local incentives vary by zipcode, but if your home is in an area with a high solar ranking, you could possibly be eligible for extra property tax exemptions, expedited permits, and waived fees in some cases. UK Power further states, “To encourage the take up of Solar PV, the government will pay you just for generating energy, even if you’re using it yourself. Also, if your Solar PV panels produce more electricity than you need, the excess can be sold back to the national grid through a Feed-In Tariff scheme. Consumers with a typical 3.5kWp Solar PV system could make combined saving and income of £628 per year (based on a solar PV system eligible for a generation tariff of 15.44p/kWh). What’s more, a typical Solar PV system will save around 30 tons of CO2 in its lifetime.” Look up local and government incentives and tax credits that might be available in your area online and speak with a solar contractor for additional advice.
Incentives won’t last long unfortunately and some may disappear entirely by 2020, so don’t wait for too long. As solar PV becomes less and less expensive, federal and local governments and utility companies are tightening the incentives available to homeowners.
If you’d like to upgrade your home with solar panels but can’t afford the initial expense, you can avoid the sticker shock be exploring PPA options through your utility company and zero-down solar loans. Leasing also offers a lower upfront cost, but since you don’t actually own the solar panels, they will not increase the value of your home and you would be ineligible for incentives. No matter how you invest in solar, you can expect decreased electric bills and will be actively supporting a greener planet.