There are many reasons why homeowners choose to make the switch to solar. Some of these include financial benefits, environmental concerns, and more. However, it’s essential to understand the return on investment of going solar before committing to it. The average solar energy system pays for itself within 10-20 years. This is an excellent return on your investment, especially compared to stocks and other traditional investments. In addition, solar systems don’t experience any significant ups and downs like the stock market, which means your savings from going solar will be consistent. Solar power systems provide numerous benefits for homeowners, including lower electricity bills, environmental benefits, and increased home value. However, the upfront costs can be an obstacle for those considering a solar energy system. Luckily, many financing and leasing options allow homeowners to go solar with little or no upfront investment. This allows them to experience a 10-12% return on investment with a payback period as low as 6-8 years.
Increased Home Value
Homeowners go solar mainly to reduce their electricity bills but also enjoy a higher property resale value. According to a study, homes with solar electricity systems sell for 4.1% more than those without. This is true even when compared to more traditional home improvement projects such as kitchen remodeling or adding outdoor living space. This resale increase can be even more significant for landlords looking to rent out properties. Renters tend to prefer homes with built-in power sources that can help them save money on their electricity bills. This is an excellent way for landlords to attract tenants with an offer that can be beaten.
Long-Term Savings
Whether you’re a homeowner who’swho’s planning to stay in your home for decades or looking to sell, adding solar to your property is an intelligent financial investment. It will save you money in the short term by reducing your utility bill and can add value to your property. In addition to lowering your electricity bill, solar helps reduce greenhouse gas emissions and water consumption. The average annual solar cost savings you can achieve will depend on several factors, including your energy consumption and local electricity rates. Many homeowners who go solar can reach net zero, meaning they produce more than they consume every month. However, this depends on the size of your solar energy system and the amount of direct sunlight your area receives each year. Many utilities offer net metering, allowing you to offset your energy usage from the grid during peak hours. This enables you to save money by only using your solar panels’ power while avoiding paying fees for remaining connected to the grid. Depending on your current electricity rates, energy consumption, and the size of your rooftop solar array, you can estimate how quickly you can expect to pay off your system. Once your solar panel investment is paid off, you’ll enjoy decades of free energy from the sun.
Tax Incentives
Many governments offer solar tax incentives that significantly lower the cost of installing a photovoltaic solar system. For example, a 30% federal tax credit offsets nearly one-third of the installation costs of a residential solar energy system. This rebate applies to purchasing and installing home solar panels, but it is unavailable in all states. It was recently refreshed through the Inflation Reduction Act and will remain in place through 2032. In addition to the federal tax credit, a homeowner may be eligible for additional savings from state and local solar programs. The average home solar payback period is eight years, and most homeowners recoup the entire upfront investment with their energy savings within a few short years. With the availability of compelling purchase and financing options, now is a great time to explore your options for home solar.
Reduced Utility Bills
One of the most significant benefits of solar energy is that it can significantly lower your utility bills. You will likely see these savings from day one if you install a solar system that is sized correctly for your household’s electricity needs. Generally, solar systems can produce 80% or more of your house’s power each month. This means you will need to buy 80% less from the grid. Suppose you pay $200 monthly for electricity from the utility company before going solar. In that case, this will drop to roughly $40 per month after going solar (assuming you still require a similar amount of energy). You may also save on electricity costs by adding energy storage to your home or participating in a time-of-use plan. These strategies allow you to store your excess electricity during sunny days for later use and take advantage of off-peak rates when the grid isn’tisn’t at its peak load. Even when including the start-up costs of a solar system, most homeowners can achieve a positive financial return on their investment within six to 10 years. This is much faster than many other investments, such as saving money in the bank or investing in stocks and bonds.
