Solar Panels: Are They Worth It and Can You Afford Them?

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If you are looking into renewable energy and have been debating whether or not solar panel costs are worth it, it is best to do some research on installation benefits and drawbacks. The primary benefit and most important factor to consider is the long-term cost savings. But solar panels have several other advantages, including helping the environment and increasing a home’s value. Keep reading to learn more.

Are Solar Panels Worth the Cost?

The easiest way to figure out if the cost of solar panels is worth it is to use a solar panel cost calculator. This will help you find the actual savings you might receive. First, input your current energy usage which you can find on a recent energy bill and the typical number of solar hours for your region. Then it’ll be easier to understand the costs and savings around solar panels, net metering and electricity rates.

On average, the total cost of solar panel installation can range between $15,000 to $25,000, according to the Center for Sustainable Energy. However, solar panel installations can cost much more or less than that depending on the system size you’re installing and how comprehensive you want it to be. Here are five key things to consider with solar panel costs:

1. How long do solar panels last?
2. The cost savings from solar panels.
3. How long does it take for solar panels to pay for themselves?
4. Environmental benefits from solar panels.
5. Will solar panels increase the value of your home?
6. Your Federal Solar Tax Credit qualifications.

1. How Long Do Solar Panels Last?

According to EnergySage, the majority of solar panels will last at least 25 years — even as much as 30 years if they’re kept in good condition. When factoring in the advancements in technology, they can possibly last even longer.

Energy output decreases over time — about 0.8% per year — but older solar panels will still generate electricity, just less. Although it may be common sense, regular cleaning and maintenance can help ensure longevity with solar panels.

2. The Cost Savings From Solar Panels

Solar panels can generate 100% of a home’s electricity needs in some circumstances and can cut normal costs by 75%. With average electricity bills ranging from $100 to $200, the savings add up once the initial solar project hits its breakeven point.

3. How Long Does It Take for Solar Panels To Pay For Themselves?

So, how long does it take for solar panels to pay off? This depends on energy prices in each state, how much electricity is used in a household and whether a solar loan is used. 

Some states, like Hawaii and Massachusetts, take as little as five years to fully pay off. In other cases, such as Louisiana and North Dakota, it could be as much as 16 years. All in all, average estimates fall between nine and 12 years for the length of time it takes to pay off solar panels.

4. Environmental Benefits From Solar Panels

Being powered naturally by the sun, solar energy is renewable. Solar panels help every individual contribute to a smaller carbon footprint. A push by more consumers toward solar panels will lead to fewer fossil fuels being burned, which helps reduce air pollution and carbon emissions.

5. Solar Panels Can Increase the Value of Your Home

Some studies conducted by Zillow suggest that solar panels can increase the value of a home by up to 4%. This can be an excellent incentive to research solar companies to see what solar panel systems cost in your area if you are looking to sell your home.

6. Federal Solar Tax Credit 2023

From 2022 to 2032, U.S. taxpayers can take advantage of a 30% tax credit on solar photovoltaic installations. Anyone who has installed a solar PV system between 2017 and 2034 can also apply for a tax credit. Not only are solar panels better for the environment and your monthly electricity bill, but you also get government-backed incentives and rebates to install them. 

The tax credit can be used against labor costs, such as installation and inspection as well as sales tax and specific equipment. Energy storage devices generating more than three kilowatt-hours are also covered. Below is a rough idea of how much a solar installation will cost in 2023 once federal tax credits are deducted.

Solar Panel Costs With Federal Tax Credit Benefit

Which States Have the Cheapest Solar Panels?

The price of starter solar panels — or any type, for that matter — can vary significantly depending on the area of residence. As the average cost per watt of energy depends on the state, some areas will be more positively affected than others.

There are some states that offer savings on solar panel costs, thanks to the U.S. government’s trillion-dollar infrastructure bill. Illinois, New Jersey, New York and New Mexico offer solar panel cost savings of 20%. For Washington, D.C. and Colorado, 50% savings are expected. 

Where Can You Get Solar Panels?

Several renewable energy companies sell and install solar panels in the U.S. Some of the top options to choose from include:

• Sunrun
• SunPower
• Sungevity
• ADT Solar
• Blue Raven Solar
• Green Home Systems
• Palmetto Solar
• Tesla

Final Take To GO

Solar panels are a good investment for consumers who want long-term cost savings on their electricity bills. However, there is a stiff up-front cost. Nonetheless, when tax incentives and home valuations are taken into account, solar panels are worthwhile for those sitting on an extra stash of cash.

David Granahan contributed to the reporting for this article.

Data is accurate as of Sept. 1, 2023, and is subject to change.

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