The popularity of solar panels on residential homes has skyrocketed in recent years. Not only is this due to the environmental benefits of using a renewable resource as opposed to a fossil fuel based energy source but also because the economics have improved so greatly due to lowering cost of various system components. Many would like to make the switch but are worried about the solar system costing too much money or not having an agreeable payback period. So, what are five ways that solar panels are amazing for your wallet?
Reducing Your Electric Bill
When you take a closer look at your electric bill, you will quickly realize that there are a variety of different charges that make up your total bill. The first and perhaps mist well known is for the actual electricity. This is usually denoted by kilowatt hours consumed each month. The second thing you may notice is a demand charge. This is the number of kilowatts that your home demanded from the grid throughout the month. Depending on where you love, demand charges can vary wildly depending on the time of day. If you are using power when demand is high in your area, you may be charged a higher rate at that time. Installing solar panels solves both of these problems. First, for every kilowatt hour that your solar system generates, this is one less kilowatt hour you must buy from the utility. Second, by adding your own demand source to your rooftop, your demand charges can be greatly reduced as well. Combining these will lead to a massive reduction in your annual utility bill.
Reducing Your Federal Tax Bill
One of the great things about going solar is the Federal Investment Tax Credit (ITC) which allows homeowners to take a credit on the following years taxes equal to 30% of the total installed cost of a solar system. This includes all of the equipment such as solar panels, inverters, and racking as well as the cost of the labor to install the system. Be sure to do some research prior to making the switch to solar as the Federal ITC is set to decrease in the coming years. By planning ahead, you can maximize the value of the Federal ITC.
Improves The Value Of Your Home
On average, homes of similar size in the same area that also have solar panels sell for more than those that do not. More specifically, the average home with a solar installation sells for upwards of 4% more than a similar counterpart. So, let’s say your home is valued at $300,000. By installing solar, it is reasonable to assume that the new resale value of the home would be roughly $312,000. In many cases, the increase in value to the home is greater than the cost of the solar system without ever accounting for any energy savings.
Local Rebates And Incentives
In addition to Federal incentives, many states and municipalities have additional incentives in the form of rebates, preferential payment for solar energy generation, and net metering capabilities. To find out what state and local incentives may be avialble in your area, be sure to check out a variety of online databases which track this information. Because these are separate programs, these savings only add to the Federal tax credit which is available to everyone in the United States.
Selling Solar Renewable Energy Credits
Some states which have a Renewable Portfolio Standard (RPS) also offer the ability to generate Solar Renewable Energy Credits (SRECs). SREC’s are minted each time your solar system generates 1,000 kilowatt hours and trades much like a stock. By selling these renewable energy credits to those seeking to meet a renewable energy mandate, you can add an additional income stream from your solar panels.