We have all heard about them and have seen them popping up on rooftops. Maybe even on your neighbours. The growth of residential solar panel installation in the United States has been fast and continues to grow every year.
Solar panel technology has proved itself to be a sustainable alternative to generate electricity, making it popular among the environmentally conscious. However, surprisingly, having an environmental concern isn’t the #1 reason why people install solar panels. In fact, it’s all about the money!
The #1 reason why U.S. citizens install solar panels is to save money on their electrical bill.
By seeing that rise in $/kWh every year on your energy bill, you may be considering solar panels for your own home. However, investing the upfront cost to install solar panels can be a hard choice. Let’s face it. The initial investment is a big block.
Surprisingly, with recent advances in solar technology, the cost is a lot less than you think. With all the savings from your electrical bill, you could pay off your installation in 5 to 8 years. After that, all those savings will be going directly into your pocket.
Before taking the leap into solar panel installation, let’s talk dollars and cents so you can understand how much solar panels can reduce your electric bill.
Recent Advances Have Lowered the Cost
Most Americans believe solar is a new technology when in fact it has been around for over 50 years. NASA has used solar technology to power their satellites since the 1960’s.
Solar technology has come a long way since the moon landing. Its efficiency has dramatically increased and cost has significantly dropped. Just in the last 10 years, solar panels have dropped in price by 70% making it incredibly feasible for residential application.
In the last 10 years, solar panels have dropped 70% in price.
With the reduction in cost and shift in environmental consciousness, solar panels are increasing in popularity with homeowners and business owners alike.
How do I Maximize my Savings?
Solar panels will generate electricity and reduce your energy bill. However, how much you will save depends on several different factors.
1. House Sun Exposure
The amount of money you save will depend on your house.
Want to find out how much your house can save you?
Wealtha recommends using the online calculator at Momentum Solar that checks the location of your house to determine if it makes sense to go solar.
Solar panels produce electricity with exposure to the sun. The more sunlight that hits your panels, the better. Ideally, your contractor would want to install panels on a south facing roof with little to no shade.
Where you are located in the United States also matters. Your home will generate more electricity the closer you are to the equator and more sunlight you get throughout the year.
In many areas in the United States, like Arizona, Florida and New Mexico, the savings from your electrical bill can pay off your solar panel install in less than 5 years. After that, all your savings goes right into your bank account.
2. Government Tax Credits and Rebates
The U.S. government fully supports residential solar panel installation. In fact, the federal solar investment tax incentive (ITC) will pay off 30% of the cost of your installation. Unfortunately, the federal government is lowering that credit to 26% in 2020 and 22% in 2021. In 2022, the tax incentive will be gone.
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For a solar panel installation that costs $12,000, you can save $1,360 by installing in 2019 instead of waiting until 2021. If you wait until 2022, you will miss out on a potential $4000 of savings.
If you want to install solar panels, you will save the most in 2019!
Solar panel cost has reduced dramatically over the last 10 years however, the price decrease is slowing down. That means if you are planning on waiting for the price of solar panels to go down, you may actually end up paying more after 2022 with the removal of the tax credit.
Other savings on installation include state tax incentives. Each state is different so your savings will vary based on where you live.
3. Current Electrical Cost
Electricity costs depend on where you live in the United States. Connecticut has the highest cost of electricity and Washington has the lowest cost of electricity on mainland USA. A high energy cost translates to higher savings on your bill.
In many cases, homes can generate more than they use, particularly during the summer months. When this happens, the electrical company will buy the electricity you make to help power other homes. Not only will you be contributing to your community, but you will also get a credit towards your electrical bill. You can use those savings on a summer vacation!
Protect Yourself From Rising Cost of Electricity
Initially, the reduction on your electrical bill will pay off the upfront cost of installation. In 5 years potentially, your solar system could be paid off and all the electricity you generate is free. You will consistently have a low electrical bill.
Something retirees, in particular, are concerned with is the rising cost of electricity. When living on a low fixed income, you want to ensure that your expenses stay low as well. Electricity has gone up by 40% since 1990. As more people purchase electric vehicles, the demand for electricity will be even higher than the last 30 years. More demand means higher prices.
With the growing popularity of electric vehicles, electrical costs are on track to increase dramatically in the United States.
By investing in a solar panel system, you are not only reducing your current electrical bills, but you are also protecting yourself from inflation of electricity in the future.
How Much Will My Home Save Me by Going Solar?
Are you curious to know the exact number your house can save you? Unfortunately, there isn’t a magic calculation to find out. Your solar savings can only be determined by the unique characteristics of your home.
To find out exactly, get a free estimate from a reputable solar panel company like Momentum Solar. Momentum Solar is known for their well built solar systems and excellent customer satisfaction. A big plus is they will provide curious homeowners a free, no obligation estimate.
With rising costs of electricity and the removal of the 30% federal tax credit, finding out how much switching to a solar will save you is a smart choice. Educate yourself with the cost of installation and the reduction in your electric bill so you can make smart financial choices for your future.
Find out how much switching to solar will save you!
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