Is Upfront Cost Worth Energy Savings for Solar Panels?
With the current increase in electricity costs in homes across the country many homeowners are considering using other energy sources that might save them money. One of the most widely thought about is installing solar panels on the roof.
Though it is said that absorbing energy from the sun can help to cut energy consumption from the main grid and lower utility bills, solar panels do require the initial upfront investment cost to put them in the home. Is this upfront cost worth the amount? The installation of solar panels can be anywhere from $13,000-$17,000 before receiving any applied tax credits. This is a large sum of money. Will you recoup it over the life of the panels?
A breakdown of the upfront cost of solar panels
Purchasing the actual panels is the largest amount of upfront cost that homeowners will incur. Though there are additional expenses to getting solar panels up and running this one carries the most weight. In addition to the panels, you will also need to purchase an inverter that could cost $1000 or more and batteries that could cost up to around $10,000.
Other setup costs of solar panels that are rarely talked about include a detailed site survey to take a look at your property to determine if anything needs to happen. This prepares the roof to be the optimal place for solar panels. This could include getting brand new roof shingles or tree removal as well as electrical updates or roof supports to make sure they can hold the panels.
In addition to purchasing the panels and paying to have them installed, there will be some maintenance costs which could include cleaning once or twice yearly. An estimated cost of about $400 a year.
Factors that can affect solar panel cost
There is a federal tax credit that some homeowners are eligible for when installing solar panels on their homes. For the year 2022, this tax credit is 26% and in 2023 the credit will be 22% for brand new systems installed within that year.
Some states offer a tax credit as well for anyone choosing to install a solar energy system. Each of these credits can vary by the particular state so you want to check in with the state that you live in to see if they offer any current credits for solar energy
The company installing your solar panels will determine much of the cost of installation and the price that they will sell the panels to you. Larger companies most often will charge a different price than smaller local contractors. It is a good idea to research all contractors offering solar panel installation and get several quotes.
The amount of sun that your house receives will make a huge difference in how much energy you will generate and will play a very significant role in the payback after installation.
Do solar panels end up paying for themselves?
The upfront cost of solar panels is very significant and on average it is said that it can take between 9 and 12 years for panels to pay themselves off when it comes to savings on your energy bills. The time frame and expected longevity for your solar panels will depend upon the specific product that you choose to install and how well they were installed. Sun exposure can also affect the lifetime of your solar panels.
Should you get solar panels?
When it comes to deciding if solar panels are right for your home and worth the investment it is best to weigh the particular specific factors of your property and your current financial situation. It is good to look into whether you are able to pay cash for the installation or if you will need to fund the project in another way. You will want to counter in your location and make sure that you are receiving plenty of solar energy from your panels to make the investment worth your while.
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