If you’re seriously thinking about installing solar panels on your home, now is the time. The price of solar panels has dropped 60 percent since the beginning of 2011, according to Forbes. Another source agrees with the price decrease, stating solar panel costs have dropped by nearly 70% since 1998. There are also other incentives that will save you money in the long run.
With all the promotion solar power has been getting, most homeowners have at least heard about how cost-effective installing solar panels will be, but not the specifics of HOW it will deliver on that promise.
To help fill in the blanks, here are 3 ways installing solar on your home will save you money:
Number 1: Investment Tax Credit
One such incentive to save money (in the U.S.) is tax breaks for homeowners, varying by State. Here is a list of incentives State by State. These include Federal and State Tax credits and rebate programs.
Number 2: Increase in home value
Installing solar panels on your home increases its value. For example, homes in states like California appreciate in value when they have solar power features at 10 percent higher than homes without. If you’re looking to buy a home that already has solar panels installed, expect to pay less over the long run in energy costs, plus any tax credits and rebate programs.
According to a report from the U.S. Department of Energy’s Lawrence Berkeley Laboratory, host-owned solar energy systems typically add $15,000 to a home’s value.
In this study, a team analyzed almost 22,000 home sales in eight states from 1999 to 2013 — producing authoritative estimates of price premiums for U.S. homes with solar panel systems.
Read the entire DOE Lawrence Berkeley Laboratory study here.
Number 3: Reduced electricity cost
This is perhaps the most immediate way homeowners save money. For most homeowners, the electricity bill is one of the highest costs on a monthly basis. Which is why lowering—or in some cases eliminating—electricity costs is so attractive.
How it works: Solar panels buffers you from the ever-increasing energy bills that go up every year. The more they go up, the more you save. Increases in electric rates which have grown between 2.5% and 7% per year over the past two decades.
Solar installation also makes your electric bill consistent. Electric bills typically go up and down every month, depending on usage, time of year, etc. With solar energy, bills will remain consistent throughout the year.
The key to finding out how much you’ll save is to check in your state through solar energy resources that can give you the specifics. For example, research shows that Massachusetts is one of the easiest states to get and switch to solar energy. Most people would not have thought of the New England state that made headlines in 2014-15 for having one of the worst winters in the country as a prime location for solar power, but it is.
Electricity, on average, costs Massachusetts residents about .17/kwh, which is slightly higher than average when you compare energy rates to the rest of the country. On average, homeowners have seen savings of up to $18,763 over 25 years (the life of the solar panels).
To learn how much you would save overall, talk to a local installer, check out your states’ tax incentives program and consult your tax advisor.