5 Financial Benefits of Solar Panels
Using solar energy to power your home is about as green as you can get. The benefits to the Earth are well known, but installing solar panels don’t just better the environment. They also provide significant financial perks for homeowners, business owners, and the economy.
Here are 4 financial benefits of solar energy:
1. It Stabilizes and Reduces Your Energy Bill
By installing a solar power system on your home or property, you can avoid the consistent utility rate hikes from traditional fossil fuels. The average annual electricity consumption for a U.S. residential utility customer is 10,766 kilowatt-hours (kWh), assuming an energy consumption of approximately 897 kWh per month.1 For those living in freestanding single-family homes, the number was significantly higher.
At an average utility rate of $0.16 per kWh in New Jersey, that’s a savings of $1,722 in the first year if you purchase the system. And that doesn’t even count the income from the Solar Renewable Energy Credits (SRECs)!
You can also do a power purchase agreement (PPA) and lock in predictable energy costs over several decades that are significantly lower than your current monthly bill.
2. Solar Can Increase the Value of Your Home
An often-overlooked financial benefit of solar power is the resale value it adds to a home. After an initial investment, it will not only save you money from lowered electricity bills, but you could potentially see the resale value of your home increase.
Homebuyers are consistently willing to pay more for homes with solar energy systems that average about $4 per watt of PV installed.2 This equates to about $15,000 more in value. While this is a long-term benefit that you won’t see immediately, it is one that you will see in the future if you choose to sell your home.
3. You Can Capitalize on Government Incentives and Purchase Options
Solar investment tax credits (ITC) are one of the driving forces behind the growth of affordable solar energy. There is a 30% federal tax credit available for purchased solar systems, which can be claimed by a home or business owner when filing their annual tax returns.
In addition to this lucrative tax credit, there are also financing and leasing options available that are making solar cheaper than ever before. The cost of solar has dropped about 1/3 since 2010 and is outperforming coal and gas. Today, you can even go solar with zero out-of-pocket expenses.
4. Utilizes Free Energy Source
Fossil fuels are nonrenewable energy sources and are risky, dangerous, and expensive to convert into usable energy. Sunshine, on the other hand, is a renewable energy source that is free. While the equipment needed to harness the energy is not free, the energy produced by the sun is. Solar energy is the most abundant energy resource on Earth and generates enough energy to power the world over 10,000 times, which can be continually used.3
5. Positive Return on Investment (Net Metering)
The Solar Energy Industries Association (SEIA)4 explains net metering as a billing mechanism that credits solar energy system owners for the electricity they add to the grid. It also provides substantial statewide economic benefits in terms of jobs, income and investment. Not only does net metering allow homeowners and business owners to generate their own clean, efficient electricity, but it also allows them to send the extra energy they produce during the day back into the grid. The extra energy builds a “bank” of credits with the utility company to use with the sun isn’t shining. This financial benefit becomes even more evident during the summer months due to longer, sunnier days.