“Going green” has risen in popularity in the past few years, and many families and businesses have been at the forefront of this movement by choosing to install solar panel fields. While switching to renewable energy plans can result in lower monthly energy rates, there are still major costs associated with converting to solar power.
The Solar Energy Industries Association (SEIA) monitors solar energy trends in the United States and reports usage has grown approximately 50 percent annually over the past decade. There is now enough solar capacity installed in the U.S. to power more than 12.3 million homes. This growth has benefited the economy and created thousands of jobs across the country. Additionally, generating solar energy in the U.S. allows for a decreased dependence on foreign oils and a positive environmental impact.
There are many factors to consider before switching to solar energy. One major component is the home or business owner’s financial situation.
John Harper, media director at Green Solar Technologies, advocates for the incorporation of solar energy into a home. “Installing a solar system will always increase the value of the home and with utility rates increasing up to 5-10 percent each year, every homeowner going solar will eventually experience a substantial savings over the life of their system with the average projected at around $18,000,” Harper says.
Harper explains that the ideal solar candidate will have a higher credit score, a positive debt-to-income ratio and the ability to generate taxable income that will allow them to take advantage of the 30 percent federal tax credit in effect for 2019. With these qualifications, a buyer will likely spend less on solar panels than on the average monthly energy payments.
Although savings of $18,000 seem substantial, approximately $15,000 is needed to install solar panels in a household. The system’s long-term savings depend on how it is financed; savings will be greater if the system is purchased upfront rather than leased. However, rebates and incentives, such as the 2019 federal tax credit, exist to encourage consumers to go solar.
Ideally, a solar panel system pays for itself in about eight years. For instance, if a consumer purchased panels that would be effective for 25 years, the consumer would then yield cost savings for 17 years.
James Cobb, RN and blogger, encourages consumers to do their research before making this investment. “When I was researching whether to put a solar energy system on my house, one thing I soon realized was nobody counted the fact the system was a permanent asset. Basically, it’s a super secure investment,” Cobb says. “The sun goes up. The sun goes down. Your system makes money in the form of electricity every day.”
While it can be costly to start off, the benefits of installing a solar panel system in a home or business are long-lasting. The home or business owner could see significant savings on electricity bills in the long run.
Riley Adams, a licensed accountant and voice behind a financial independence blog, provided some advice on when to go solar. Adams discusses the federal tax credit and predictions that the figures may go down in the coming years.
“Solar energy can make a lot of sense if the costs can be reduced by incentives and the energy produced offsets costly utility rates. However, as the solar investment tax credit is set to sunset, the cost proposition will change unless solar installers can continue cutting system costs. Interested residential customers should act fast to take advantage while it lasts,” Adams said.
Taylor Mabrey is a freelance journalist covering issues related to energy, the environment, and politics. Her work has appeared on various news sites. Taylor earned a bachelor’s degree in photojournalism from the University of North Carolina at Chapel Hill.
