What Should I Be Paying for Residential Solar Panels?
The upfront cost of going solar is one of the primary reasons why some homeowners stay on the fence for some time before finally making their decision one way or the other. But unlike most home improvements, a solar system is designed to save you money and over time, it will even pay for itself.
Despite this, however, homeowners still must come to terms with that initial financial output and this can leave many wondering if going solar is really worth it. In today’s post, you will find out how much solar panels generally cost and the type of savings you can expect from having them installed on your home.
The Average Cost of a Solar System
According to the Center for Sustainable Energy, the average solar system installation, including equipment and labor, can run anywhere between $15,000 and $25,000. Minus the 26 percent federal tax credit for going solar before 2023 and your out-of-pocket costs can range between $11,100 and $18,500. If you wait until 2023 to have your system installed, then the tax credit will drop to 22 percent before being eliminated entirely in 2024 unless Congress takes action to extend the credit.
How Much Can I Expect to Save With Solar Panels?
Solar panels help every home that has them installed save money on their energy bill. But just how much money is saved depends on several key factors, including the size of your solar system, the angle of your roof, the number of hours of direct sunlight your home receives daily, and your local electricity rates.
To help you determine how much you can realistically expect to save, you should look at your energy bill. According to the U.S. Energy Information Administration, in 2019, the average annual electricity consumption for a U.S. residential household was 10,649 kilowatt-hours (kWh), or an average of about 877 kWh per month. So, look to your energy bill to see how much kilowatt-hours of electricity your household is using.
The next thing you should look for on your bill is how much you are paying for each kilowatt-hour of energy. According to ElectricChoice.com, the average cost per kWh in the United States is 13.31 cents. Based on these two averages, the average American household spends around $1,390 per year for electricity. You can determine your total by multiplying your kilowatt-hours used by the cost per kWh on your bill.
If your household is on par with the national average, and your solar system is capable of covering 100 percent of your energy consumption, then your solar panels will save you $1,390 per year. This means that if your system cost $13,000 out-of-pocket after the federal tax credit has been applied, then your system will pay for itself in less than 10 years.
With most solar panels carrying at least a 25-year warranty, this means you will enjoy 15-plus years of free electricity once you reach that threshold.
Additional Options for Going Solar That Don’t Require a Large Upfront Cost
If you still have reservations about the upfront costs of going solar but you still want to enjoy all the benefits that come from sustainable energy, then there are other options available that might suit your needs better.
For instance, you can ask your solar installer if they have a solar leasing program. You may be able to lease your solar system for a more affordable monthly fee rather than paying for it up front. The downside to this, of course, is that you won’t own your system, and this can make for some complications should you choose to sell your home in the future, but if you are not planning on selling, then it is a convenient and affordable way to go solar.
You can also look to see if your area is home to any community solar projects. This is a great option for if you live in an apartment building or your rent your home. With a community solar project, you buy the electricity that is generated by solar panels installed in a remote location. While you will still have an energy bill, the cost of your energy will most likely be substantially lower than your utility provider’s rate. And, you can have peace of mind knowing that your energy is clean and sustainable and not coming from fossil fuels.
Regardless of which option you choose, going solar is definitely worth it, not only for your bottom line but also for the planet.