Solar power is one of the hottest (no pun intended) real estate trends. Almost everyone knows that solar power is great for the environment and could help Americans transition away from excessive fossil fuel usage.
What you might not know, however, is that solar power is surprisingly cost-efficient!
There are lots of options for financing solar panels, and they are customizable to your budget and timetable.
Whether you're buying or leasing your solar panels, they are always a great investment. Keep reading, and we'll tell you everything you need to know about solar panel cost and savings.
Factors of Solar Panel Cost
Starting your solar journey can be easy with the right professional help. Your solar panel provider should be able to give you a cost estimate based on a few factors.
Let's break down each of those factors so that you understand exactly what goes into your solar panel costs.
The more solar panels you get, the more your installation is going to cost. Most people install between 15 and 20 solar panels on their homes.
The number of solar panels you should install depends on your location and desires.
Different locations have different energy needs, which is why solar panel costs vary by location. We'll get to that in a moment.
Different homeowners also have different energy needs, and it is up to you to decide how much solar power you ideally want to generate. You don't have to switch completely to solar power, though many homeowners choose to.
Your options are: get a smaller solar panel system in order to offset some of your power usage, or; get a larger setup and switch completely (or almost completely) to solar power.
Either way, you will be doing a service to the environment and to your wallet. Smaller systems cost less money upfront, while larger systems cost more upfront but can offer you more savings down the line.
The cost per watt of solar power varies from state to state. The average cost per watt for solar panels is between $3 and $4 dollars for large projects and $4 and $5 dollars for small projects.
How your provider will calculate your system cost will follow a formula similar to this:
First: # of panels x wattage of panels = Total wattage of system
Second: Total wattage of system x $/watt = Gross system Cost
Example: Your solar provider quotes you needing a system that is 20 panels and they are using a 325 watt solar panel. (residential wattages can be anywhere from 285-450 but isn't indicative of quality)
20 panels x 325 watts = 6,500 watts (9.75 kW)
6,500 watts x $5.00 = $32,500 Gross System Cost not including any federal incentives or rebates.
These numbers may seem large, but keep in mind that you will not have to pay for your solar panels all at once. Most homeowners finance their solar panels on an efficient payment plan and often they get to trade their utility bill for a fixed payment that is less than what they currently pay on average.
When you hire solar panel experts, they will help you estimate how much solar power you will need to power your home. If you have a larger home, you will need a larger solar panel system.
If you work from home or use an unusually large amount of electricity (for example, if you have a recording studio in your home) you will also need a larger solar panel system.
This calculation will also be based on how much of your electricity bill you would like to offset.
If you'd like, you can run your home with a hybrid system of both solar and traditional power. You will not save as much money as you would by going completely solar, but you will still save considerably.
Ease of Installation
Part of the cost of solar panels is the labor involved in solar panel installation. Not all homes are built the same way, and some designed are much better suited for solar panel installation than others.
Depending on the shape of your roof, your solar panel installation might require more or less labor than usual.
Of course, more labor goes into installing a larger system than a smaller one.
The team that installs your solar panels will also be responsible for replacements and repairs in the future. Make sure you find a solar power provider that does good quality work at rates that seem fair to you.
Calculate Against Your Electricity Bill
You might be wondering: how does solar power work when the sun is not out? Luckily for you, there are a couple of ways to store your solar power so you can use it during the day and the night.
This is crucial because most people use more energy after the sun goes down. You are more likely to be at home and to have more lights on and use more appliances during the evening.
Batteries are one popular option for storing solar power. You can purchase home storage batteries and use them to store your solar energy for later use.
Unfortunately, these batteries can be quite pricey. If you're looking for a more cost-efficient option, you should look into net metering.
Net metering is a system that allows you to transition between solar and regular power as day turns into night.
Net metering works by ensuring that your solar panels generate enough power during the day that they offset the traditional electricity you use at night. Net metering is much more affordable than home storage solar batteries.
Your solar panel provider can help you use net metering to optimize your home's power usage. When you calculate the cost of your solar panels, consider how much money you will be saving by lowering your electricity bill.
Solar Panel Financing Options
You can either buy or lease the solar panels that you attach to your home. Let's break down buying vs. leasing so you can decide which solar strategy is right for you.
Leasing Solar Panels
Solar panel leasing is common. Many people are afraid of the investment of purchasing solar panels, or they prefer to cut down on upfront costs.
Leasing solar panels is a great option for those who want a low-commitment solar panel experience. If you aren't sure how long you plan on living in your current home, leasing solar panels is probably the best choice for you.
You probably want to be able to take advantage of the savings offered by solar panels for as long as possible. If you are planning to sell your home soon, you can lease your solar panel system now and buy one later!
Leasing solar panels also relieves you of maintenance and repair responsibilities.
Unfortunately, leasing solar panels does not offer you as much potential for saving as buying them does. It can also disqualify you from certain tax benefits.
However, leasing solar panels is still a smarter, more environmentally conscious choice than not installing them at all.
Buying Solar Panels
Buying solar panels is a sound investment. Most solar panels systems pay for themselves in less than ten years.
You can finance your solar panel system and pay for it with cheap monthly payments. Considering the amount of money you're going to save on electricity, those payments probably won't be difficult to make.
Even if you take out a personal loan to pay for your solar panels, they will most likely still pay for themselves quickly.
When you buy solar panels, it adds value to your property and sometimes qualifies you for certain tax benefits. You may end up saving money in ways that do not directly relate to your electricity usage.
If you can afford the investment, solar panels can be a great way to add value to your home so you can sell it at a profit. Even if you do not intend on staying in your home for a long time, buying solar panels can benefit you.
Solar Panel Incentives
In many states, homeowners with solar panel systems can qualify for government incentives. These incentives are there to encourage everyone to do their part to lower carbon emissions.
With these incentives, you can save extra money or even profit off of your solar panel system.
Solar Panel Tax Exemptions
Many states offer tax exemptions to solar power users. These may include sales tax exemptions on your solar panel system, and; decreased property taxes on your home.
Property taxes can be exorbitant, and you should not pass up an opportunity to lower yours. You might be surprised how much money you save in the long run by decreasing your property taxes.
These tax exemptions are generally only available to those who own their solar panels; leasing your system disqualifies you.
20 states currently offer solar tax credits and other tax incentives. In the next few years, many more states are expected to follow suit.
Selling Your Solar Power
In some states, you can sell excess solar power back to the government. If you have a large solar panel system and you generate more power than you need, that power does not have to go to waste.
Your local government will use your solar power to help power the area around you in a more sustainable and cost-efficient way.
By selling your solar power back to the government, you may actually be able to make passive income from your solar panel system.
You can only sell your solar power back to the government if you own your solar panel system. Otherwise, that power is legally not yours to sell.
After your system is paid off, you may be able to start turning a profit. This is one of the main benefits of buying large solar panel systems. They cost more upfront, but can make you money later!
Increased Home Value With Solar Panels
We mentioned before that solar panels increase your home value, and you may be wondering: how much of an increase are we talking about?
These figures depend on your local real estate market, but they are almost guaranteed to be large. In a thirty-year period, homeowners are likely to save at least $19,000 by buying a home with solar panels already installed.
This means that home buyers may be willing to buy your home for more than you originally paid.
For example, if your solar panel system will save the new owners $20,000 in thirty years, you can easily add $10,000 to your asking price. Your buyers will still be getting a great deal, and you can make a tidy profit.
The Cost of Not Going Solar
Installing solar panels is the best choice for any homeowner's wallet. As electricity rates climb higher and higher, you can't afford not to take advantage of those savings.
However, the value of solar power goes beyond its financial benefits. Solar power fights climate change and could be the key to a more sustainable future.
In California, all new homes are now required by law to be built with solar panels installed. California has long been at the forefront of environmental issues, and many states are likely to follow its lead in coming years.
If you care about creating a sustainable environment for generations to come, you should consider solar panels for your home. Your carbon footprint will be significantly reduced.
Installing solar panels on your home is one of the only ways that individuals (other than the obscenely wealthy) can massively reduce carbon emissions and fight climate change.
When these environmental benefits line up with significant savings for you, how can you say no to solar power?
Save Money and Carbon With Solar Power
Now that you know all about solar power savings and costs, find out what kind of solar panel system is right for your home. Reach out to professionals and get a solar panel cost quote today.
You may be shocked at how quickly you can start saving money with your new solar panel system. In a few years, you may even be making money.
Make the right choice for your wallet and the planet by investing in solar energy today!