With the cost of solar falling, and the price of electricity rising, home solar is becoming more and more attractive. The Solar Energy Industries Association (SEIA) predicts there will be over a million solar installations in the U.S in 2015. And 2016 is expected to triple the 2015 installations.
So the question everyone’s asking: Is solar really worth it?
Here are some factors to consider, though you should contact a Great Basis Solar specialist to understand costs, efficiencies, and tax incentives specific to your home or business.
Cost of home solar systems
According to the SEIA, the cost of a solar system has decreased by 73% since 2006, largely due to sharp declines in the price of photovoltaic (PV) panels. Installation costs dropped by 50% between 2008 and 2013, and fell an additional 10% in the first half of 2014. Solar competition and efficiencies continue to push these prices down.
Current solar tax rebates and incentives are paying 1/3 or more of these solar costs!
Solar tax rebates
In 2011 the US Department of Energy (DOE) launched the SunShot Initiative to “make solar energy cost-competitive with other forms of electricity.” As part of this initiative, the federal government issued a 30% solar tax credit (ITC) for businesses and homeowners. Many U.S. states are also adding their own solar tax rebates.
The combination of the falling solar prices and these tax incentives are making solar very attractive to homeowners and small businesses.The 30% solar tax rebate is scheduled to expire at the end of 2016 creating this recent surge in installations.
Operation and maintenance costs
Once installed, solar panels don’t require a lot of maintenance. Regular visual inspections and a wash with the garden hose every few months are recommended. Solar panels and mounting hardware are very durable, and built to last 30+ years. The good solar panel manufacturers offer a 25-year warranty, and solar companies usually offer a 1-5 year parts and labor warranty on the installation. The solar inverter is covered by a separate warranty, which usually run 10-15 years.
Other operational costs could include performance monitoring and insurance.
The cost you pay for electricity to a utility company is measured in kilowatts per hour. And this cost differs by state. Some states like California, Hawaii, and Connecticut, for example, pay a really high rate of over $0.18 per kilowatt-hour. Washington and Louisiana are under $0.10 per kilowatt-hour (based on the August 2015 U.S. Energy Information report). Utility companies have historically increased their rates by an average of 4% – 8% per year, depending on the state.
On average, solar power costs are hovering around $0.08 per kilowatt-hour. If you are in a state like California, you could literally cut your utility cost by more than 50% with solar.
Take the example of a California homeowner who was paying an average of $120 a month to his utility company for electricity. With a 4% annual increase, he expected to pay $68,727 over the next 25 years to his utility company. The payment on a 25-year loan for an equivalent solar system cost him $100 a month. The 25-year savings is $38,727. Since his solar loan did not require any money down, his savings started the very first month, and will continue to grow every year.
Increased home value
New research sponsored by the Department of Energy shows buyers are willing to pay more for homes with rooftop solar panels. The study, conducted by the Lawrence Berkeley National Laboratory in California, examined 23,000 homes in eight states from 2002 to 2013. Researchers found that buyers were willing to pay a premium of $15,000 for a home with the average size solar photovoltaic system size of 3.6 kilowatts. Put another way, this is about four additional dollars per watt of solar power. This was not the case for leased solar panels.
Is solar right for you?
The only way to truly answer this question is to contact a Great Basis Solar specialist to determine how much electricity you need, your available solar rebates, and a few other factors like the orientation of your roof. Contact Great Basis Solar today for a free solar quote.