Did you know the price of solar panels has dropped 82% in the last decade? The question of cost savings and profits are the main driver for home and business owners’ decisions when calculating their solar panel savings.
In this article, we take a look at the factors you should consider when calculating your potential solar power savings. Keep reading to learn more.
When determining whether solar panels are worth it, several factors must be considered. These factors include the available government incentives, your location relative to the sun’s path, if you own or lease your system, and how you plan on using your electricity. Below we explore these factors and how they relate to solar panel savings.
Suppose you live in an area with high amounts of direct sunlight. In that case, you can access more free solar panel energy. Areas with high natural sunlight levels are typically where you find large solar farms in barren fields.
In contrast, areas that receive minimal sunlight have been neglected until recently. For example, in Phoenix, AZ, there are 3.5 hours per day of direct sunlight during the summer months. However, in Fairbanks, AK, there are 1.5 hours of direct sun per day.
Phoenix homeowners will most often generate more solar energy savings than Fairbanks homeowners. Phoenix homeowners can generate higher savings from solar panels since less electricity must be purchased from the grid and the solar panels generate their own power. Less money is spent on these electricity purchases.
It’s not all bad news, however, if you don’t see as much sun. Your roof facing and pitch also have an impact, but not as much as you might think. An exposed roof in Fairbanks, AK, might produce more energy than a roof in Phoenix, AZ, that’s surrounded by trees and buildings blocking out the light.
Also, roofs that face away from the Equator still generate 80% of the optimal facing. East-West roofs are great if nobody is in the house during the day, but they provide solar for longer at dawn and dusk. The age-old myth that you need a roof that faces the Equator has some truth but doesn’t tell the full story.
In the Midwest, expect to pay around $8,000-$12,000 for a typical home installation. Solar leasing companies offer homeowners low or no-cost installation to lease them the panels and collect the energy bill savings over time. The company owns the equipment in this arrangement, so there is an additional upfront cost for customers who choose this route.
Yet, these prices can be brought down a significant amount, or at least justified in a way that makes them more appealing than at first glance. Factor in any incentives and tax credits available to you, as well as the overall lifetime savings you can achieve from your installation.
Feed-in tariffs, tax credits, and grants are all incentives that can impact the cost savings or profits you will realize from your solar panels. Some incentives pertain to clean energy, like renewable energy certificates (RECs), which function like carbon offset credits. Each state is different; therefore, the amount of money that each homeowner may take advantage of could vary a lot depending on where they live.
As of 2021, there will be a cap of 30% on all solar tax credits, and it may drop to 10% in 2022. This means that this is a limited-time offer, and you should receive your credit while you can.
Tax laws change all the time. Thus it’s difficult to say how long these solar savings will be available for homeowners, so it’s better to grab them while you still can.
Solar savings can vary depending on where you live, but here in the Midwest, expect savings of around $50-$100 per month on your electric bill. The cost of electricity from solar panels depends on several factors, including where you live, the utility company in your area, and the rate plan that matches your usage patterns.
However, suppose you have the initial funds to oversize your installation or add battery storage. In that case, there are two significant advantages in doing so.
The first of these is feed-in-tariffs. If you’re generating energy when the grid is overloaded, companies will pay you to take power off you. This is brilliant news if you work while everyone’s at home since you’re not using valuable energy.
Further, you will save a fortune when the time comes to owning an electric car. EVs, as they’re known, per mile, cost 1/3 the cost of gasoline and 1/4 the price of diesel in fuel costs alone, and that’s without a solar panel installation on your roof. Imagine if you could use all that extra energy to give yourself free miles. You might end up saving over $100 per month in mileage alone!
There are plenty of companies in the Midwest that will give you quotes for your solar panel installation and help you maximize your solar panel savings. It’s essential to find a company that offers a warranty and a company you can trust for the long run.
If you plan on having any future work done, finding a company you trust can build loyalty and save you money on future green projects such as heat pumps. If you’re lucky enough to live near a water source, you could even expand into hydropower!
Keep reading my blog for more top tips on how you can save money throughout the Midwest!