Investing in solar is a big step. However, the ROI on your investment in solar is one of the biggest reasons why people choose to incorporate solar into their home.
To help you find your return on investment for a solar project, we’ve put together this Solar ROI Calculator. It’s common to have questions about solar and it’s value. Are solar panels really worth it? Do they provide value for your home? How much money do you save on energy bills? How long does it take to pay for them?
Are Solar Panels Worth It?
Simply put, solar panels are 100% worth it. Solar energy is a reliable and renewable energy source that serves as a great investment. Depending on how large your home is, how much energy you use, where you’re located, and how much sun your solar panels get, the payback period will vary.
Payback period refers to the amount of time after your solar panels are installed until they have paid for themselves. The rate at which they pay for themselves will depend on how efficient your panels are and how much you were previously paying for electricity. At Sun Badger Solar, we only use the highest-quality and most efficient panels on the market. That means you’ll have the shortest possible payback period. A typical photovoltaic system or PV system will see a 20% ROI in the first year.
Payback periods vary for every individual and solar system. Some homeowners will spend more on their system. Others use more electricity or live in an area where electricity is more expensive. Because of this, we can’t say for certain when the payback period will officially be over for you. But, we can say that on average this period will take roughly 7 – 10 years from the first payment.
Advantages of Tax Credits
One way that solar panels quickly pay for themselves is through tax incentives. The solar tax credit allows you to receive a 26% tax credit on any money that you spend on your solar panel installation. That includes removing trees, roofing, permits, and more. Don’t wait to install your panels. In 2021 the tax credit goes down to 22%, and in 2022 it expires. Start installing solar before the tax credit goes away to ensure extra savings.
The math for this is simple. If you spend $20,000 to install solar on your home, then you’ll receive a $5,200 credit on your taxes in 2020. In 2021 you’d receive $1,000 less or $4,200 in total. That means instead of your solar energy project costing you $20,000, it’s closer to $15,000. What a HUGE savings!
Local solar incentives include refunds from power companies, statement credits, and more! You can learn more about state and local solar incentives in this blog post. Or, reach out to Sun Badger Solar and one of our knowledgeable solar rep’s can walk you through what’s available in your area. We’ve been installing solar for a while, and we’ve been able to help our customers get some great incentives.
Return on Investment of Solar Panels
After you’ve made it through the payback period—which is usually around 7 – 10 years—and you’ve gotten your tax credits from the federal government, your solar energy system will be all profit. You’ll be able to start making some money. One way that solar energy can make itself more valuable is through net metering.
Net metering refers to when a power company tracks the excess electricity that your solar energy system produces and gives you a statement credit for it. A single solar panel won’t produce enough electricity to power your home, let alone enough to push any energy back out to the power company. But, an entire solar energy system can often produce more than enough electricity. When this is the case, you’ll be able to lower your cost of electricity and also improve your ROI. Not all utility companies offer net metering, but when they do it’s a great advantage!
Where net metering isn’t a great fit a battery bank is an excellent alternative. Solar battery banks are batteries connected to your solar panel system that store electricity produced in excess instead of pushing it back into the power grid. If your batteries were to become fully charged and there would still be an excess of electricity being produced, then that electricity would be pushed back into the grid.
Improved Home Value
The idea that there are real costs to going solar is something of the past. While the cost of going solar might seem steep, because solar panels last more than 30 years, you’ll be able to improve the value of your home. In some estimates, a house with solar will have an increased value of 4.1% of the total property value. A home that was worth $300,000 before solar panels were installed, it will be worth $312,300 after the solar panels are installed.
Estimating Your Solar Needs + Cost
If you want to know how much solar you need to install to power your home, you can use our solar calculator. The calculator is simple, put in your current cost for electricity, your home’s location (based on state), and the direction your roof faces. With these factors, we can give you a rough estimate of how much solar would cost you after incentives and the cost per month with a standard 20-year solar financing option.
After you have those numbers, it will be easier to tell how much solar can save you, and when you’ll start to see a return on your investment.
Remember, that with solar, like many other things that you can, you truly get what you pay for. The high-end, top of the line solar panels and solar energy systems that Sun Badger offers to our customers, provide the most value, and are the most efficient. These panels make the most of every bit of sunlight that hits them. That means you’ll reap more benefits from installing solar, and they’ll last even longer. We even offer a 20+ year warranty, so reach out to us today and get the energy savings that you deserve!