Aside from your retirement plan, owning a home is often considered the largest single investment of a person’s life, and as utility bills continue to soar and inflation keeps rising you may be wondering if solar energy might be a more cost-effective route to go for your home. While traditional electricity and natural gas is still used in majority of homes today, solar could provide you with a great deal of benefits you may not be aware of. In this article, we’ll take a look at the cost of solar energy for homeowners, pros and cons of using solar, financial benefits, and most importantly how long it really takes for you to see a return in a solar property investment.
Solar energy refers to the radiation from the sun that can be used to create power or electricity.
Considering how much solar and living a zero-net energy lifestyle is talked about nowadays, i’m sure you have a general idea of what solar energy is and the purpose of using it. However, for those who aren’t aware here is a quick summary of what it is and how it works. Solar energy refers to the radiation from the sun that can be used to create power or electricity. It is also a renewable source of energy that is better for the environment because of its role in reducing greenhouse gas emissions and doesn’t deplete when used. In retrospect the sun naturally renews its energy whereas energy for electricity generation is renewed by burning fossil fuels such as coal, natural gas, and petroleum. Many scientists suggest that solar energy can also mitigate climate change and help protect human life, wildlife, and other ecosystems in our atmosphere.
Solar energy works when the sun shines onto a solar panel, when this happens the photovoltaic (PV) cell inside the panel absorbs sunlight creating an electricity flow. This electrical flow allows us to perform all of the necessary functions that you’d otherwise use with gas or electric such as cooling and heating your home. The sun generates two primary forms of energy that we are able to use including heat and electricity and solar panels are able optimize both of these energy forms. Elon Musk has said, “The sun is converting over 4 million tons of mass to energy every second, we have a giant fusion reactor in the sky… you can actually power the entire United States with 100 miles by 100 miles of solar.”
If you’re thinking about using solar energy you’ll obviously want to consider pricing before pulling the trigger and going green. On average, installing solar on your home or business, and depending on square footage, will cost $15,000 to $25,000 for a 3kW solar system. $25,000 to $35,000 for a 5kW system, and $35,000 to $45,000 for a 7kW system. In short, the kW abbreviation refers to kilowatt which is a measure of power in terms of solar energy. The higher the kW the more energy you’ll be able to produce throughout your home or business. For a more in-depth look into solar measurements take a look at this article here.
For a more modest-sized house a 3kW solar system can be an effective option but most homeowners in the United States will need a 5kW system to power their entire home. To dial this in a bit better you’ll want to review your electric bills to see how much energy you’re consuming on a monthly basis. For example, a 5kW solar system with an average energy usage of 3,000 to 4,000 kWh per year will be able to efficiently power your home.
Installing solar panels on your home or commercial building can provide multiple benefits including reduced utility bills, higher property values, and long-term savings. The advantages of using solar has been a mainstream narrative for a while now, and the push to go fully green has been popularized through politics and media outlets throughout the U.S. and many other countries. Is it really that much better than using electric or gas to power your utilities though? Is it actually going to bring higher value to your home and help reduce harmful pollutants in the air? While you may not save the planet by installing a solar panel system on your home there are definitely benefits to using it. However, while solar may be a sustainable solution for you and your home, there are still plenty of factors and variables to consider before puling the trigger. Here is a list of the advantages and disadvantages of going solar…
Now, let’s break down some of these pros and cons to see if solar energy is a viable option worth considering. Before looking into pricing and installation options it’s important to figure out what type of local and federal tax and rebate options are available to you in your area. According to the Department of Energy, solar systems installed between 2022-2032 are eligible for a 30% tax credit. In order for you to capitalize on this tax return your solar system must be installed at a residence within the U.S., have purchased it through cash or financing options, and the system must be a ‘first-time installation’, meaning that if you bought your home with a system already installed you won’t be able to claim the tax benefits. To read more about this click here.
Other crucial factors to consider include roof space, structure, and the direction at which your roof is pointing to. Whether you’re looking into installing solar panels or solar shingles you’ll need to consider the space in order for the system to be effective. This all depends on the size of your home and how much power you’re looking to generate. The average amount of roof space that is considered practical for a home is about 200 square feet. The structure of your roof and how much sun exposure it receives will also determine whether solar is a suitable option. Homes facing north will receive considerably less sunlight than those facing south, southeast, or southwest.
The weather and climate in your area also plays a significant role in how efficient your home’s solar energy production will be. Areas that experience less sunshine can experience less efficiency, whereas areas that produce lots of sunshine will see a greater impact on energy production. The good news is that even in overcast climates solar can still be a productive source of energy for your home. If your area experiences lots of cloudy days, upon purchasing a solar panel system you can look into higher-efficiency panels or you may just need more panels altogether for greater energy production.
To reel in all the benefits of solar you’ll also want to make sure your home isn’t lacking in efficiency to begin with. Replacing old windows, updating worn appliances, and checking your insulation for any defects should all be done before looking into a solar panel system. Upgrading your home for better efficiency takes time and can be expensive so before you start looking into solar systems take the time to think about efficiency upgrades first. Aside from starting with a solid energy efficient foundation, upgrading your home will also likely mean you’ll need less solar panels.
Something else you may be wondering is what happens to my solar panels if I decide to move? While relocating with your solar panel system isn’t impossible it may not be worth it. Removing and reinstalling solar panels can be very expensive and depending on the warranty of your system it may not even be possible. Relocating your solar panel system really boils down to where you’re moving to, moving costs, warranty, and local regulations. If you’re interested in solar but plan on moving in a few years it might be better to hold off so you can avoid any hassle of transporting them.
Although we discussed some of the tax breaks available by going solar above, believe it or not, there are still other incentives and caveats to consider. Let’s dive a bit deeper into some other financial benefits and questions you may have, and then we’ll discuss how long it’ll be until you see a return in your solar system investment… if you decide to go that route. If you are in need of a roof replacement and you’re looking to install solar, the cost of your roof replacement may be eligible for a tax credit. While conventional roofing materials like asphalt shingles or clay tiles serve only as structural functions, some solar shingles and tiles can support power functions as well as structural functions making it a possibility to qualify for a credit. Additionally, if replacing your roof with solar increases your property value and the life of the roof increases, replacing your roof may qualify as a tax-deductible expense. Furthermore, you may also qualify for a utility rebate or energy credit incentive program by installing solar. There are a few different types of options here including rebates from your state government or utility company, rebates from the installer, and rebates from the manufactures. To understand more about the tax and rebate options of installing solar check these resources out…
Installing solar panels will eventually save you money but the real question is when? I mean that’s the meat and potatoes of the sales pitch right? “If you install solar you’ll not only help the environment but you’ll also be able to see financial benefits in the future.” Alright let’s get into this because unfortunately it’s just not that black and white. After installing solar, the average investment return period is typically around six to ten years. This is just an estimated range of time it may take considering the laundry list of factors that come into play when talking investment return. These factors include total cost of your system, additional incentives, electricity usage, energy production, cost of electricity, and solar tax credits and rebates. The time period or the “solar payback period” greatly depends on these factors, as well as the total efficiency of your solar panels. Even so, Solar payback factors are all generally calculated by assuming your solar panels offset 100% of your energy usage. With this in mind, not all solar systems are designed to offset 100% of your energy usage, some solar systems will produce less power than you need and some will generate more than you need. In the case that it produces more, which is obviously a good thing, you’ll be able to receive net metering credits. Net metering is a billing system where solar energy system owners are able to receive credits for the extra power they generate to the grid. Finally, understand that the life of your solar system will also determine the amount you’ll see on your investment return. Solar panels will slowly lose efficiency over time, so when they start too reach the end of their life you won’t be saving as much money. However, top-of-the-line solar panel systems can last 25 years or more which will be plenty of time to see a substantial return on your investment, and in that case “the juice will be worth the squeeze.”
The push to go solar isn’t as clear-cut as many make it out to be, and while there is definitely a good chance you’ll save money and see a substantial return in the long run, you’ll need to address a few factors first before going solar. That being said, solar can be an excellent option for those who have the capital upfront, are prepared for maintenance costs, understand the pros and cons, and are willing to wait a while before seeing a return. Don’t get me wrong there are plenty of benefits and perks associated with solar, it really all boils down to the individual’s needs and wants. If you are looking to install solar Condition One Commercial will be happy to help you answer any questions or concerns you might have. We are able to do complete installations as well as estimates and we can also help guide you in understanding how long it’ll take to see a return on your investment.
we are veteran owned & operated
