Can You Really Save with Solar?
The answer is yes and here’s how.
Throughout the country, residential electricity rates have increased about 15% over the last 10 years. Some states have seen even higher increases, like California, while others have seen only minimal increases, like Florida. This is due in large part to the increase in price of natural gas and other fossil fuels. More recently, extreme weather conditions have also led to an increase in electricity rates. Weather events such as droughts, temperature changes, fires and super storms can increase electricity demand and push up prices. As a homeowner, you can control how much electricity you use by being more mindful around your home, i.e., turning off lights, lowering your thermostat, and hanging your clothes to dry, but you can’t control the rate at which you pay for electricity. This can be quite frustrating for homeowners. There is an alternative, however, and that is solar.
Protect Yourself
Solar not only protects you from increases in electricity rates, but it leaves you less reliant on an unstable grid system, and for some, allows for complete energy independence. The most common ways to finance a solar system are by cash or solar loan. With these options, your electricity bill will be significantly reduced or even eliminated immediately after connecting your solar system. There are also solar lease and power purchase agreement options. If you go for one of these, you will be paying either a fixed amount per month for the duration of your contract or your rate will be subject to increases every year. Your local installer will be able to provide you with details on all these options and help you decide which is the best for your home and finances. Connect with one of our Pro Partner Installers to get started.
Payback Period
The easiest way to understand how you can save money by switching to solar is to calculate your “payback period.” The payback period is the time it takes for the savings on your electricity bill to exceed the cost of your solar system. The average payback period for a solar system installed in the US is 5-12 years; this can vary depending on the quality and complexity of your system. Solar systems typically last about 25-30 years at maximum energy output (output may start to decline after this time). That means, after you’ve paid off your system through the savings on your electricity bill, you will have many years of basically free electricity. Bear in mind that most homeowners still connect their solar systems to the municipality’s grid. This guarantees you will have power in case there is limited sun. Some municipalities charge a monthly hook-up fee. The fee is usually minimal and can often be offset if your home sends more power to the grid than is used—in some cases, you can even be paid for this excess power.
To get a rough estimate of your payback period, simply take the cost of your solar system and divide it by your average monthly electricity bill. Divide this number by 12 months and you’ll get your payback period in years.
Tax Credits & Incentives
Don’t forget that there are federal and state tax credits that can lower the price of your solar system and increase your savings. Currently, there is a federal tax credit that allows homeowners to purchase solar panels at a reduced cost. Homeowners who install a solar system in 2021 are eligible for a 22% tax credit. The current federal tax credit is set to expire in 2022. In addition to the federal tax credit, each state may also have tax credits and other incentives making solar even more economically viable as an energy source.
Curious how much you can save by switching to solar with Solaria panels? Checkout our Solar Savings Calculator. Simply enter your address, average monthly electricity bill and the rate you pay, and we will give you an estimate of the amount panels your home will need and the savings associated by investing in Solaria panels.
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