Installing solar panels on your home provides the rare opportunity to pay less for your electricity while helping to preserve the environment. The motivation to save money and power your home with clean, reliable energy has already motivated more than 2 million homeowners to add solar energy systems to their rooftop.
However, the economics of clean energy can vary greatly depending on your location, what your utility company charges for electricity and how much energy your specific home uses. In this article, we’ll explain the ins and outs of powering your home with clean, reliable energy—from how much it costs and if it will pay off in the long run to what kind of system is best for your needs.
How Much Do Solar Panels Cost for an Average Home in 2022?
The average cost of residential solar panel installation today ranges from $12,390 to $15,960 after claiming the 30% federal solar tax credit (more about that below). This adds up to less than $3 per watt to install panels, which has dropped by more than 70% in the past 10 years to make solar one of the best energy sources available. Solar panels have minimal long-term maintenance and since the only cost is the initial investment for installation, it’s mostly a one-time investment.
How Much Will Solar Panels Cost for Your Home Based on Your Location and Energy Use?
Although the average cost of solar energy systems is interesting, your home is likely not average. What’s important to know is how much installing panels will cost on your home based on location, how much electricity you use and what kind of savings and payback period can be expected.
We understand that $12,000 is a substantial amount of money. Solar Technologies has zero-down financing options available—like solar loans—that let you start saving the minute your panels are turned on.
We offer a range of financing options so you can save money with clean energy regardless of your budget or credit history. We’ll work closely with you to determine which type of solar financing is the best option for your needs and explain the differences and benefits between each so you can make the best decision.
Will Installing Solar Panels on My House be a Good Investment?
There are many benefits to installing solar panels, including reducing your carbon footprint and increasing the resale value of your home. According to data from the National Renewable Energy Laboratory (NREL), having panels installed on your roof increases your home value by $20 for every dollar you save on energy bills, which is a 20-to-1 return on your investment (ROI).
There’s another way to look at this question: Does adding solar power increase a home’s value? According to real estate company Zillow, in states like California, the answer is already yes.
Zillow’s research shows homeowners view energy-efficient renovations—such as a new kitchen or finished basement—as investments that pay off in the form of higher property value. The same is true when evaluating the ROI from investing in clean energy. Homes with solar panels installed on them sell for 4.1% more than comparable houses without the extra technology (or $9,274 more for a median-valued U.S. home).
As one of the fastest-growing industries in the country, many people also aren’t aware of the tax credits and incentives that can help offset the installation costs. From the Solar Investment Tax Credit (ITC) to the Inflation Reduction Act’s improvements to many clean energy initiatives, there are many ways to save with clean energy and increase your home value.
What Are Solar Panels and How Do They Work?
In short, when the sun’s rays hit your panels, it stimulates the cell’s electrons and creates a flow of electricity that’s sent to the system’s solar inverter. The inverter converts the electricity generated by your panels into usable electricity that can power your home’s lights, appliances and more. Your panels can also be paired with a solar battery that stores any excess clean energy your panels produce for later use.
The good news is you don’t have to be a clean energy expert to benefit from it. Once the system is installed, it runs itself and no additional involvement from homeowners. However, if you do want to learn more about solar panels and how to get more out of your system, we’ve got an in-depth breakdown.
What Are the Different Types of Solar Systems You Can Get for Your Home?
For a long time, the most common type of solar energy system was a simple grid-tied one because it was the least expensive option. Their low cost means they have the shortest payback period. However, these systems switch when the utility grid fails, so the panels can’t provide backup power when the grid is down.
Many homeowners are going a step further by pairing home batteries with their solar energy systems so they have backup power even when the grid fails. Hybrid solar systems are residential systems that have both battery backup and grid connection.
There is a third type of solar energy system—off-grid systems. However, few people elect to go off-grid unless they live in remote areas because it can be expensive.
Do Solar Panels Really Save Money? Do They Pay for Themselves?
Yes, solar panels can really save you money on your monthly energy bills. Over the course of their lifetime, panels can save homeowners well over $50,000. You can expect your panels to pay themselves off within four to eight years. After that, your panels will produce free electricity for the next 25-30 years.
The reason those savings can add up to such large sums of money is because inflation drives the cost of electricity higher over time. As the costs of electricity will continue to rise over time, so will the cost of electricity. Installing panels on your home is like an insurance policy against increasing electric rates.
Here are some energy facts for California homeowners:
- The average California household pays about $298 each month for electricity.
- This adds up to $3,576 per year.
- That’s 39% higher than the national average electric bill of $2,573.
While it may sound too good to be true, solar is not a scam. Other ways in which solar panels save on utility bills include net metering programs that many states have implemented. This program allows you to sell any excess electricity your panels produce during the day back to the utility company at night. Currently, California Net Energy Metering (NEM) is under attack and the urgency to switch to solar is growing. Homeowners want to lock in the current NEM-2 rates before their solar savings potential is drastically reduced under an amended rate structure.
It’s important to note that not all utilities have created equally beneficial net metering policies, and many are fighting against these programs if they haven’t already cut back. Net metering currently guarantees that you will receive the retail rate for any excess power your panels produce, but there is no guarantee how long this policy will last. Installing solar panels now ensures that you will continue to reap the benefits of net metering for at least 10 years, even if regulators alter the program in coming years.
Do Solar Panels work when the Power Goes Out?
Most people think that solar panels will keep the lights on if there’s an outage. But unless you add battery storage, they won’t. During power outages, panels automatically go offline as a safety measure for utility workers who are repairing power lines. As a result, the only way to keep your lights on and your fridge running during a blackout is if your solar energy system is paired with battery storage.
What are Solar Batteries? How Much Do They Cost?
Solar batteries store excess electricity produced by your panels so you can have power even when the sun isn’t shining, like at night or during an outage.
Installing a home solar battery generally costs between $10,000 and $15,000 and increases the overall cost of an installation. However, some states offer rebates to reduce the cost of adding batteries with a solar system. It’s also worth noting that the 30% federal solar Investment Tax Credit applies to batteries, which helps reduce their cost.
Despite the high price tag, home batteries have never been more popular as homeowners—especially in areas prone to power outages—look for ways to protect themselves from widespread power outages.
As utilities increasingly move away from net metering, solar batteries will only become more popular. Without net metering, or with the proposed changes we are seeing in California, you wouldn’t be paid for the electricity energy your home generates during peak hours of power usage (the middle of the day). And if you are, the payback will be at a much lower rate. By storing your excess energy in a home battery, you’re able to use that energy when your solar system isn’t producing, instead of exporting it back to the grid. This will allow you to maximize your savings by using more of your self-generated power — even if your utility doesn’t offer a great net metering policy.
How Long Does it Take to Install Home Solar Panels?
The solar installation itself can take one to three days to complete, depending on the complexity of the system. The solar installation is just one step in the process of powering your home or business with clean, reliable energy.
The overall solar process can take anywhere from three to twelve months from the time you sign a contract with an installer until your system is turned on.This may vary depending on the demand, supply delays and the permitting and utility approval process. Depending on where you live, this process can take anywhere from a couple weeks to several months.
Many companies, including Solar Technologies, are advocating for faster permitting processes so homeowners can start saving on their energy costs as soon as possible.
Are There Solar Incentives or Tax Credits Available?
The federal solar tax credit—also known as the Clean Energy Tax Credit or Investment Tax Credit—provides homeowners with a tax credit equal to 26% of the total cost of a solar panel installation. Battery installation costs for batteries are also covered.
The solar tax credit is just one of several incentives for going solar. Solar incentives are available throughout the U.S., including credits for battery storage systems. Keep in mind, however, that these incentives may not be available for as long as the federal tax credit.
At the end of the day, adding a solar panel system to your rooftop can save you money every month on your utility bills and you can pair them with a battery storage system to protect your home against outages. When you factor in the environmental benefits as well as the rebates and incentives available, it’s a win-win for homeowners and our planet.
If you’re ready to save money and power your home with clean, reliable energy, contact us today for a free customized solar quote.