How Going Solar Can Save You Money

Have you thought about going solar but you’re not sure whether it would work for your home? Here’s what you should know about getting energy from the sun.

Have you noticed more and more homes with solar panels on the roof? Are you getting ads on social media offering you deals if you go solar? Whether you answered yes or no, you’re likely to see more solar panels on roofs and more ads in the future.

There’s a reason home solar energy systems are growing in popularity, and that reason is cost savings. While you will have to pay upfront costs if you want to own your own home solar energy system, once you do, you’ll see savings over time on your monthly utility bills.

How can you save with solar, and how exactly does it work? Take a look at what we’ve found out about going solar.

How a Home Solar Energy System Works

Essentially, the sun heats up cells inside the solar panels, and those cells send that energy to a solar inverter, which converts the energy into electricity for your home. You can choose to install a solar system with additional batteries that will store extra energy until you need it. 

Most home solar energy systems are still tied to the grid in case you need to purchase electricity from the city because you run out of solar power. One extra benefit of solar batteries is that if the power goes down in your area, you’ll still be able to draw electricity from your batteries.

Why You Should Consider Solar

There are two key reasons why you should consider going solar: it’s better for your bank account and the environment. Here’s how solar panels save you money and help the planet.

It Gets Cheaper Every Year

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If you want to completely own your home solar energy system, you should expect to pay anywhere in the $15,000-$35,000 range, depending on your area and your needs. While that may sound like a steep price, the good news is that you can expect it to decrease. 

Solar panels for home energy systems really only began to appear around 2008. Since 2009, the price of not only panels, but also installation, wiring, and other “soft costs” have all decreased. Experts predict that the cost of installing a home solar energy system will continue to drop as more people invest in solar.

Save on Your Federal Taxes

Did you know that the federal government wants you to go solar? The Inflation Reduction Act includes money specifically for that purpose. According to Consumer Reports, “With the new legislation’s Residential Clean Energy Credit, you can subtract 30 percent of the cost of installing solar heating, electricity generation, and other solar home products from your federal taxes.” That’s a lot of savings!

Oce you do the paperwork, you’ll receive the 30% tax credit no matter how much you spent. So whether you spent $10,000 or $75,000 on your solar energy system, you can expect to receive 30% of what you spend back through a credit on your federal tax bill.

It’s important to know that if 30% of the cost of your solar installation equals more than what you owe in federal taxes, you can’t get cash back. However, you can carry forward your savings to your federal taxes for the next year – so you’re still saving that full 30% of the cost of your system. 

Save on Your Energy Bills

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Of course, the main reason to install a home solar energy system is to save on utility bills. According to SolarReviews, “Yes, solar panels really do save you money. In many cases, panels can save well over $50,000 throughout their lifetime. You can expect your solar panels to pay themselves off after four to eight years. After that, your panels will be making you completely free electricity for the rest of their 25-30 year working life!”

Those savings are fantastic, but as with any investment, your mileage may vary. Speak with your solar installer to learn more about what kind of savings you can expect for your home.

Increase the Value of Your Home

Just like remodeling your kitchen will boost your home’s value, so will installing a home solar energy system. Buyers are willing to pay more (about $15,000 more) for a home that comes with solar panels. Solar homes also may sell faster than other homes.

If you’re not planning on owning your system but you want to contract with a third party who owns and operates the system instead, having the solar system installed could (possibly) still positively affect your home’s resale value. Studies have shown that a third-party solar energy system has either a neutral or positive effect.

Solar Helps the Environment

When you choose renewable energy, like solar or wind, over fossil fuels, you’re actively helping the environment. Burning fossil fuels emits carbon, polluting the air and water. Powering your home with solar energy instead of fossil fuels significantly helps the environment.

Read More: Save When You Switch to an Electric Stove

When Solar Won’t Work

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Solar panels aren’t the best option for everyone. Take a good look at your roof before you start contacting solar companies. If your roof is shaded by large trees, for example, then it’s unlikely your panels would receive enough sunlight to power your home. The condition of your roof matters, too. If your roof will need replacing soon, it’s a smart idea to wait to install solar until after you get a new roof.

Similarly, the slope of your roof and the direction it faces are also important factors. South-facing homes with roofs that are sloped between 30 and 45 degrees are the most ideal for solar energy systems.

How To Check Your Home

If your home doesn’t face south, that doesn’t mean that solar automatically won’t work for you. The best way to find out your home’s suitability for solar power is to work with a solar professional. Who should you work with? You can start by checking out Energy Sage, PVWatts, or Sun Number for an estimate of your home’s solar energy potential. 

You’ll also need to contact a local solar installer to have someone come directly to your house to offer you an assessment. However, it’s important to be careful before you sign on the dotted line. Research the solar company online and read reviews of the installer’s work before you sign on. 

If it’s possible in your area, only work with North American Board of Certified Energy Practitioners (NABCEP) solar installers. Check out this directory from the board itself. Choosing a home solar energy system can be expensive, so you want to work with the best to make sure your investment is treated right. Make sure you contact at least three solar installers for quotes.

Think About Electric Vehicles

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Do you own a Tesla, a Nissan Leaf, a Toyota Prius, or another electric vehicle? The power your vehicle requires affects how much electricity you’ll need, and therefore, it could affect your plans for your home solar energy system. Track how much kWh (kilowatts per hour) your electric vehicle needs and inform your installer.

Owning Versus Leasing Versus PPAs

There are three options when it comes to installing solar: you can purchase your system outright, you can lease a system, or you can agree to a power-purchase agreement. 

Purchasing your system outright will give you the most benefits on your taxes and when it’s time to sell your home. The second option, a solar lease agreement, is just like leasing a car. You’ll make scheduled monthly payments that allow you to take your energy from the panels and not from your local utility company. If your panels generate more energy than you use, you may be able to turn that extra energy into a credit on your lease payment.

With the third option, a solar power-purchase agreement (PPA), you won’t own or lease the system. Your benefit is simply that you’ll pay for the energy that comes from the panels, which is typically cheaper than the price of electricity from your local utility company, and it’s better for the environment. 

Alternatively, it may be possible to secure a solar loan, like a car loan, that enables you to own the system outright after you pay off the loan. Remember, you’ll only receive tax benefits if you own the system. 

Preparing to Install Solar

Contractor wearing yellow hard hat showing plans to young couple in front of home
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Installing solar isn’t as simple as finding a contractor and paying the fees. You may need to work with your local utility company directly as well as your HOA. Some housing associations may require that you submit your solar plan to them for approval. Check with your HOA early on in the process. 

Community Solar

Are you interested in solar energy, but your home isn’t situated for it or you don’t own your home? You still have options. Community solar is a way for you to invest in solar energy and receive an electricity bill credit for your share of the community solar array. 

The panels are located off-site, and community members can either buy or lease panels. Check out this article from the Department of Energy to learn more about how community solar works.

Solar energy can be a fantastic option for anyone who’s looking to cut down on utility bills. Remember to get quotes from at least three solar installers before you sign any agreements. Then, once you take the leap, you’ll be reaping the benefits of solar before you know it!

Read More: Save a Surprising Amount of Money on Your Utility Bills

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