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Are Solar Panels Worth the Cost?

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Alternative energy sources are currently a hot topic. Consumers are trading in their gas guzzlers for more efficient cars and their appliances for models that reduce energy use.

 If you’re concerned about the environment and looking for a way to reduce your carbon footprint, solar panels are a great investment. Solar energy is the single most abundant natural resource. It’s also clean since there is no emission from its use.

Affordability of Solar Panels

The cost of switching to solar energy can be high. There are many factors to consider when deciding if the switch will pay off in the long run.

Incentives

To incentivize Americans to invest in energy alternatives, the U.S. federal government offers rebates for solar panels. The current rate is a 26% tax credit that reduces at the end of 2022.

Pricing Trends

Since 2009, the cost of solar panels has trended down each year, making them a more affordable investment for many families. In fact, the cost has dropped 70% in the last decade.

Still, the upfront costs are expensive enough that most people have to take out a loan to pay for the installation. In 2020, homeowners spent an average of $10,000-$20,000 on solar panel installation.

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Breaking Even

At this rate, it takes roughly seven years to break even on the cost of solar panels. Once you break even, you can save tens of thousands of dollars over the panels’ 25-year lifespan by selling your unused energy back to your power company.

Resale Value

If you don’t know how long you’ll be in your current home, that may affect your decision to make the leap. Rest assured that solar panels increase home value by around $15,000 on average, according to a study by the Lawrence Berkeley National Laboratory. Homes with solar panels also tend to sell faster than those without.

Financing Options

You have three options for a solar panel system:

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While you save in the short term with a solar lease or power purchase agreement, you’re not eligible for the tax benefits. Plus, you won’t save as much over the life of the solar panels. Purchasing the system outright is the best long-term financial decision if you want to invest in solar panels.

What To Consider Before Buying Solar Panels

Everything has risks and benefits, and solar panels are no exception. Making an educated decision is important in making the best decision.

Pros of Solar Panels

Cons of Solar Panels

Other Considerations

Before buying solar panels, take a few things into consideration:

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Choosing the Right Solar Panels

There are two basic ways that solar panels work to convert sunlight into energy — photovoltaics and concentrating solar-thermal panels. 

Photovoltaics

PV materials work to convert solar energy into electricity. Each PV cell is called a panel. While the individual panels are less than a millimeter thick, solar installers place them in protective shields made of plastic or glass for longevity.

The number of panels you need depends on your home size and energy needs. Panels connect together to form an array for your home, and the array connects to your local power grid.

Additional pieces connect to the panels and convert the direct energy into electricity to power your appliances and other systems.

Concentrating Solar-Thermal Power

Instead of directly absorbing the energy, CSP solar panels are mirrors that reflect the sunlight to concentrate it onto a receiver. The heat produced spins a turbine or powers an engine to produce electricity for your home.

Mirrors may be arranged in a circle around a power tower or in a line with individual tube receivers.

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Understanding Cost

CSP solar panels are newer than PV solar panels, so they may be more expensive. Many factors influence the cost of your solar panel installation, including:

Selecting a Solar Company

Once you determine which solar companies perform installations in your area, read reviews of each one. You will want to:

You can also use Project Sunroof to get free estimates from approved solar panel installers in your area.

Good To Know

In the next few years, you may be able to save money by installing solar panels yourself after purchasing the system. The system is still in the process of being vetted and approved for use.