6 Benefits of Installing Solar Panels
Just a decade ago, the cost of installing solar panels on a home was something not many people could afford. But today, solar energy is more affordable than ever, thanks largely to improvements in manufacturing and efficiency as well as increased tax credits.
If you’re considering installing solar panels on your home, chances are you stand to benefit greatly. In addition to reducing energy costs, solar panels can improve energy security, increase your home’s value, and more.
Interested in learning more about the benefits of installing solar panels? Keep reading to learn why they would make a great addition to your home!
Photo by Bill Mead
What is solar energy?
Every spot on Earth receives some amount of sunlight, a form of radiation also known as electromagnetic radiation, or simply: solar radiation. How much solar radiation any one spot receives depends largely on location, with areas near the equator receiving the most.
Solar panels are designed to capture solar radiation and convert it to usable energy or electricity. Despite common belief, solar panels are not a new technology. Inventors have been advancing solar technology since the 19th century, with the first solar panels installed in New York in 1884.
Solar panels use a solar energy technology known as photovoltaics (PV). As described by the Office of Energy Efficiency and Renewable Energy (EERE):
“When the sun shines onto a solar panel, energy from the sunlight is absorbed by the PV cells in the panel. This energy creates electrical charges that move in response to an internal electrical field in the cell, causing electricity to flow.”
The electrical current is then captured by metal plates on the solar cells and transferred to connecting wires. Finally, the electricity flows through a solar inverter to turn it into usable energy for your home.
The cost of installing solar
Even though solar panels aren’t new, they have a reputation of being extremely expensive. While that was certainly true a few decades ago, today solar panels are more efficient and more affordable than ever, and they continue to trend in that direction.
In 2009, the average cost of installing solar panels was about $8.50 per watt, or $85,000 for a 10-kilowatt-system. Today, the national average is about $2.86/watt, or $28,600 for a 10-kilowatt-system. When you take into account the 30% federal tax credit, the average cost falls to $20,020; a mere fraction of what it used to be.
Still, solar panels aren’t cheap to install, and the cost remains an impediment for many people. While a good solar system will more than pay for itself in the long run, the cost of entry is still too high for many consumers.
If that’s the case for you, you can still get access to solar energy through a rental program, a solar cooperative, or a solar community:
Renting solar panels
Renting solar panels is a good option for those unable to pay the high upfront costs of solar installation but still wishing to reap the benefits of solar energy, including overall energy savings and a lower environmental impact.
Several solar companies offer consumers the option to lease a solar energy system. In most cases, you’ll either pay a fixed monthly amount or pay a fixed price per kWh. Given that the average payback period for solar panels is around 7-10 years, renting solar panels could be a good option for a short period of time, or until you’re ready to invest in your own system.
There are a few drawbacks of renting solar panels. Since you don’t own the solar panels upfront, you won’t qualify for tax credits or rebates. Additionally, your monthly payments won’t pay themselves back in the long run. That said, leasing solar panels has less of an upfront cost and allows you to avoid any maintenance costs, reasons alone that could make it a worthy option.
Joining a solar cooperative or solar community
If the upfront cost of installing solar is still too high, there are two other options to consider: joining a solar cooperative or a solar community.
In the case of a solar cooperative, several individuals or businesses (or a combination thereof) partner up to buy bulk solar technologies in order to bring down the overall price of materials and installation. It’s a great way to invest in solar energy with other people – giving you peace of mind and support throughout the process.
Community solar is another option where customers have the ability to purchase solar energy from an outside source, usually in the form of a credit on their monthly utility bill. It’s a great option for renters, who are often unable to reap the benefits of solar energy. Community solar is usually localized, so check with local utility providers or energy companies to find community solar projects near you.
Why install solar panels?
If you’re considering a solar set-up for your home, you’re likely wondering whether the benefits outweigh the costs. But, between saving you money on your monthly energy bill and improving the resale value of your home, installing solar panels is an investment that’s sure to pay itself off in the long run.
Below, we take a closer look at the top six benefits of installing solar panels:
Reduce (or eliminate) energy bills
By far the biggest reason people choose to install solar panels on their home is in order to reduce their energy bills or even eliminate them entirely.
Exact savings depends on a variety of factors, including:
Local electricity rates
Daily sunlight exposure (affected by location and size/angle of your roof)
Size of system
Your energy needs
If your system ends up producing more energy than you need, you can even sell the excess energy back to your utility company! While a few dollars here and there may not seem like much, it’s the epitome of passive income.
Improve energy security
A volatile energy market means that the price of energy can vary greatly from one day to the next. Additionally, with the US energy market continuing to rely largely on non-renewable resources, consumers are also subject to uncertain energy sources.
By installing solar panels, you’re ensuring your access to renewable energy, increasing your energy security now and into the future, as well as during possible storms, brownouts, and even blackouts.
Earn tax credits, rebates, or grants
In an effort to improve access to renewable energy, the federal government passed the solar Investment Tax Credit (ITC) in 2006, a 30% tax credit for individuals installing a solar energy system on their property. In most cases, the credit amounts to thousands of dollars and greatly reduces the cost of entry for installing solar. Thanks to the ITC, the solar industry has grown over 200x, according to the Solar Energy Industries Association (SEIA).
States also offer different types of clean energy incentives in the form of tax credits or rebates. Programs vary widely from state to state, but you can find out more about state policies and incentives here.
Improve home resale value
Like a good renovation, the installation of solar panels usually improves the resale value of a home. Buyers are willing to pay a premium for a home that already has solar installed. According to one study, a solar energy system increased the value of a home by $15,000 on average, enough to cover at least part of the system’s original cost.
Extend the life of your roof
A less commonly known benefit of installing solar is that it can extend the life of your roof by protecting it from the elements. For example, solar panels protect the roof underneath from the sun’s harsh rays, which damage roof shingles over time. Additionally, solar panels can help protect your roof from the direct effects of snow, ice, and hail.
While it may seem like no big deal, the extra protection offered by solar panels can save you money on expensive roof repairs or even replacements.
Support renewable energy
Even if installing solar panels had no obvious financial benefits, it would still be a great investment. Although renewable resources are increasing in popularity, the US still relies heavily on the burning of fossil fuels for energy, which is responsible for nearly 40% of the country’s CO2 emissions.
In an effort to reduce the impacts of global warming, individuals and businesses alike can help support clean, renewable energy by investing in solar power. Each kilowatt-hour of solar energy not only helps reduce greenhouse gas emissions, but it also reduces water consumption and pollution.
Learn more about the environmental benefits of solar energy here.
Are you thinking of installing solar panels on your home? What’s your main motivation? What reservations do you have? Let us know below!
