Solar Panel Cost Equals Your Energy Savings
Estimated Time to Read: 3 minutes
Want to save money from the solar panel? Install solar panel system in your house and safeguard your mounting utility costs. Usually, solar shoppers get payback on the system within 7 years and they continue savings for about 25 years, which is the normal lifespan of the system. Nevertheless, 20 years saving from solar depends to a great extent on where you stay. Let’s check out the major factors that influence what you save and the benefits of solar panel installation:
§ Major Factors Influencing Saving – Some of the major facets that influence your saving include electricity rate, local financial incentive, and solar financing. In case you live in an area that has high electricity rate in comparison with other regions, the energy saving from your solar installation will be higher. Next are the local financial incentives. In case your local government or state provides cash rebates and tax credits as well as incentives like SRECs, you will get more opportunity of saving. Your energy saving from solar panel also depends to some extent on solar financing. Major solar financing options include solar loan, cash purchase as well as solar leases and PPAs. Every option will provide you a different value proposition along with a long-term return.
§ Benefits of Solar Panel Installation – Now, let have a look into the benefits of solar panel installation and the amount you would save. If you have assumed monthly electricity bill to be $100 and a 3% increase in the rate of electricity, your net cost of installing solar panels would be what you will get by deducting 30% federal tax for solar from the total cost of going solar. Under this assumption, you can expect to pay about $25,000 utility for your electricity over the next 20 years. $25,000 will be the cost of not going solar. However, for a more accurate estimate of your savings, you can check out a free solar calculator. A solar calculator can help to analyze your roof, actual cost data as well as applicable incentives in your area to offer you a customized estimation of how much solar can save you.
§ Saving with solar in a state without incentive – If you want to save with solar in a state without incentive or rebate, with a cash purchase of $0 down the solar loan and $0 down solar lease/PPA, the net installation cost out of pocket can be around $10,000. In that case, you can avoid a monthly electricity cost by $100. Your monthly savings can go up to $100 and yearly savings to $1200. Your payback period will be around 8 years and an annual rate of return on your initial investment will be around 12.5%. Hence, the total savings over 20 years can be around $20,500. Moreover, in some cases, the state and local programs can reduce your out-of-pocket cost and allow you to generate income from solar energy system.
§ Saving with cash rebate and tax credit – Depending on the place of your stay, you can reduce your out-of-the-pocket cost by virtue of cash rebate and tax credit offered by the state. Like federal investment tax credit for solar, some states will let you deduct the cost of solar energy system from your tax. You could also be eligible for cash rebate from your state government or utility.
§ Saving with solar renewable energy certificates – You can also sell solar renewable energy certificates produced by solar panels produce for the sake of extra income. Even if the prices of the certificates vary depending on where you stay, they can considerably improve the value of your solar panel system.
Savings also depend to a great extent on how you are deciding to finance your solar panel installation system. By providing the guarantee of lower utility bills as well as a smaller carbon footprint, solar technology sells itself. In any case, everybody wants to save money and protect the planet. However, you should be aware of the aggressive marketing strategies of some of the solar panel installation companies who try to force you into signing up for services. You may get a perfect solar proposal, but if the installer is not helpful, you should think twice of moving ahead. If you are going solar, it should be a positive and exciting experience from the very beginning to the end. Nevertheless, if the initial consultation provides you a bad vibe, the rest of the process will not be enjoyable to you. In order to comprehend the approach of going solar, you can request for a free proposal from a solar panel installation company.