Looking to reduce your carbon footprint and your monthly electricity bill? Investing in renewable energy sources like solar power can do just that.
And while you may see plenty of solar company ads that claim you can receive “FREE*” solar panels, it, unfortunately, isn’t that simple.
So what is the cost of solar power? And over what period of time will you get your full return on investment?
This article will cover all that and more.
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Since 2010, the average solar installation cost has slid by half, from $40,000 to closer to $20,000. Meanwhile, the cost of electricity has almost doubled in that time.
So what does that mean for you? Well, your costs break down in how large your sustainable energy system needs to be.
Solar energy systems are priced based on Watts. The Solar Energy Industries association detailed that in Q1 of 2021, the price was around $2.94 per watt.
Most homes require a solar-powered system between 5kWh and 10kWh, leading to a cost somewhere between $14,700 and $29,400. Hence why the average falls close to $20,000.
The exact costs of installing a solar panel system are relative. They’re based on your home size, your geographic location, the team you’re working with, and any fees they might have, as well as the general supply and demand for panels.
That’s not to mention additional components that may be required, such as inverters, power cells, or even re-roofing materials (depending on the age and condition of your roof).
Your first step is to analyze how much electricity you use on a monthly basis. This information is available on your utility bill statements. If the information isn’t there, you can contact the utility company and they will provide it.
The longer you’ve been in the home the better idea you’ll have of how much electricity you spend. Next, you’ll need to evaluate how much sun coverage your home gets.
A Florida beach-house is going to get more sun than a log cabin in Montana (or at least you would hope so!). This means that the beach-house would require fewer solar panels to cover your electricity needs than that log cabin.
For those in less extreme environments, you’ll need to evaluate your home’s surroundings. Trees, larger buildings, or other obstructions that shade your home will lower your overall output.
Professional estimates, such as those from Blue Raven Solar, can assist you in learning more about your home’s specific solar needs.
They’ll help you gauge the overall cost and how long it will take for you to get a return on your investment.
In 2020, Congress extended a 26% tax credit for solar panel systems that are installed through 2022. This tax credit decreases to 22% in 2023.
What this means is that would you install a solar system, 26% of the approved cost can be deducted from your taxes as a form of credit. Meaning the solar power pricing for a $20,000 system is credited to you for ~$5,000.
Certain state and local municipalities offer additional benefits as well.
The cost of solar power isn’t one that’s clear on paper. With federal credits, the monthly savings you’ll save from your utility company, and the environmental benefits, there’s no easy dollar number to estimate.
Look around for different solar panel installers in your area and get quotes and info that pertain to your home.
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