Electricity rates are rising, and property owners are looking for ways to reduce their utility bills. Keeping the thermostat set higher in the summer and lower in the winter will reduce energy usage, but you are sacrificing comfort.
Switching to solar power seems to make sense but is it worth it in the long run? Whether or not solar panels save you money depends on a few factors that include installation costs, available tax credits, and your current electrical rates.
Need expert advice? The consultants and contracts from Homeowner Funding have broken down the factors you should consider below.
Does It Make Sense to Switch to Solar Power?
For some homeowners switching to solar power is a cost-effective way to lower energy costs, but it may not apply to everyone. Here are five steps you can take to see if it is the best option for you.
1. Look Over Your Past Energy Bills
Electricity rates vary by location and provider. Residents in another state may be paying lower or higher rights. Your electrical plan also factors into your bill. Homeowners with fixed rates tend to pay less than those on a variable plan.
Review your past electrical statements. Are your bills uncomfortably high? Do they stay in the same high range throughout the year? If you answered yes to one or both of these questions, installing solar panels is probably worth it.
2. Find Out if You Get Enough Sunlight
Solar panels are useless without sunlight. The panels need sunlight to produce and store energy. If you live in an area with frequent rainfall and plenty of cloudy days, solar panels may not help increase your energy savings.
Other states like California, Florida, and Texas boast plenty of sunshine throughout the year. On average, one hour of sunlight produces 1,000 watts of electricity. Think about the amount of electricity you use on an average day before switching over to solar power.
You also want to look at how your home is oriented towards the sun and the amount of shade your roof receives. Depending on the condition of your home, you may need roof funding to make necessary repairs.
3. Estimate Solar Panel Installation Costs
Solar panel installation costs can be overwhelming. Even installing something as simple as replacement windows can be expensive enough to require window funding; solar panels are significantly more complex. While the upfront costs usually range between $15,000 to $20,000, the solar system also requires little maintenance and most last for at least 20 years before you need to think about replacing the panels.
Overall, solar panels last longer than a traditional HVAC system, and you rarely need to call for repairs.
Don’t be afraid to comparison shop. Solar panel installation companies do not charge the same price. Getting as many quotes as possible will ensure you are getting the best price for your money.
4. Ask About Incentives
Climate change and energy efficiency are part of a global conversation. That’s why the United States federal government is offering incentives in the form of tax credits to qualifying homeowners who are willing to make energy-saving renovations, making it easier than ever to get insulation financing and solar power installation assistance.
Currently, the federal government allows residential taxpayers to deduct 26% of their solar panel installation costs up to December 21, 2022. The tax credit drops to 22% in 2023 and expires in 2024.
States can also offer financial incentives to property owners switching to solar power. Fees may be waived for installation permits, or you may see a reduction in your property taxes. Some states allow homeowners to sell their unused solar power back to traditional electric companies. Some manufacturers also offer rebates on their solar products.
5. Watch Current and Future Trade Policies
The United States trade policies affect solar panel costs. Trade tariffs can increase the price of foreign-made products. In 2018, the United States government imposed a 30% tariff on solar panels not manufactured in the U.S, raising purchasing and installation costs. The tariff is set to expire in 2022, but it is something to watch.
Your best option is to work with American-made products if you are concerned about solar panels being worth it in the long run. You want to start saving money as soon as you decide to forego traditional electricity.
Homeowner Funding Can Help You Make the Right Choice
Overall, only you can decide if it’s really worth it, in the long run, to switch to solar power. But that doesn’t mean you can’t get help. Homeowner Funding exists to help people make the best possible decisions for their needs. From renewable energy technologies to vinyl siding financing options, we strive to provide homeowners with all the tools they need to build the house of their dreams.
Have questions about solar power, or think you’re ready to make the switch? Contact Homeowner Funding today to learn more about our services.