People invest in solar panels for a variety of reasons, but all reasons relate to the economic and environmental benefits of solar panels. To help you better understand why people invest in solar energy systems, we have created this roundup of the most common reasons people buy solar panels. In this roundup, we discuss the 5 most popular reasons for solar panel installation and answer 3 FAQs to help you determine if solar panels are right for you. Let’s get started.
1. Save Money
The most significant factor for buying a solar panel is their ability to save money. Whether you are buying solar panels for a residential home or commercial business, solar panels will decrease your electricity bill.
There are several reasons that solar panels will save you money. Firstly, you are creating your own energy instead of buying energy from a local utility company. This will immediately decrease your electricity bill, even if you are still connected to the grid (which is recommended).
Additionally, you can see even more rewards for your panels if you stay connected to the grid. Depending on your contract with your utility, you can get paid for any extra power you produce and put back into the grid. Some areas even offer tax incentives, which makes solar panels even more affordable.
2. Better For The Environment
Another popular reason for buying solar panels is that they are better for the environment. Traditional energy that is used in the grid is sourced from nonrenewable resources, while solar energy is sourced from renewable energy.
Nonrenewable energy is energy sourced from fossil fuels like coal, oil, and gas. When using these fossil fuels for energy, they create a lot of pollutants and pump large amounts of CO2 into the air, a leading cause of climate change. Additionally, these energy sources will run out, meaning that they are not viable long-term energy sources.
Solar energy, on the other hand, is renewable energy. This means that the natural source is constantly replenished. Additionally, solar energy is cleaner for the environment because it does not produce large amounts of CO2 or other pollutants.
By transitioning to renewable solar energy, you diminish your carbon footprint and do your part at keeping the planet clean and safe for future generations.
3. Boost Energy Independence
Everyone loves being independent, and buying solar panels is just one way to become more independent. By installing solar panels, you are no longer dependent on energy companies for your energy. Instead, you are able to generate your own power to become more independent over your home and resources.
Additionally, becoming energy independent boosts the U.S. energy independence. As more citizens install solar panels, less energy needs to be provided by the country. As a result, the country is better able to protect its citizens from price fluctuations in global energy markets.
4. Earn Return On Your Investment
Solar panels cost a bit of money upfront, but they should be viewed as an investment, not an expense. As we have already seen, solar panels can save you a lot of money and even bring more money in by bringing in returns on your investment.
You can approximate the annual returns of your solar panel by dividing the benefits you receive by your initial investment. To help you determine potential returns, here are the factors you will need to consider:
- Electricity Rates: Your current electricity rates will allow you to determine how much money you will save by switching to solar panels. The higher your current rates, the more you will save.
- Financial Incentives: Many local and state programs offer incentives for switching to solar energy. Higher incentives result in lower installation costs and shorter payback time. See if you qualify for any incentive programs.
- Solar Renewable Energy Certificates (SRECs): Certain states or utility allow you to sell the SREC associated with your solar energy system’s electricity. With these programs, you can earn money and generate new income.
- Technology: Certain technologies are more efficient at producing energy. The more efficient your system is, the more returns you will see.
- Environment: Different environmental locations produce more sunlight exposure. The more sunlight you expose your solar panels to, the more energy it will produce. For example, states like California will experience greater returns than states like Washington.
- Property Value Increases: Solar panels tend to increase the value of your property. Determine how much owning a solar energy system will increase your property value by hiring a professional to evaluate its worth.
- Cost: Solar panels have an initial cost for installation and parts. How much you pay for the solar energy system will determine your initial investment cost.
Together, these factors will help you to determine the cost of predicted benefits and the cost of the initial investment.
5. Increase Property Value
As previously mentioned, owning a solar energy system will increase property value. In fact, studies have found that installing a solar panel system into your home will increase its value by 3% to 4%. Many of the factors that drive greater returns are responsible for panels adding to the value of your home.
When you sell your home, you do not only receive a recoup for the initial investment for the solar panels, but you will also receive a premium. This premium will increase the value of the initial investment.
It is important to note that installing a solar panel system through third-party ownership does not increase property values. In other words, you must be the owner of the system, not lease it.
Frequently Asked Questions
Here are some frequently asked questions about solar panels that might help you determine if a solar energy system is right for you:
Why should I install solar panels?
As we discussed, there are many reasons that you should install solar panels. Here are signs that you should install solar panels:
- You want to decrease your electricity bill
- You want to protect the planet for future generations
- You want to boost your and the U.S. energy independence
- You want to earn a return on your investment
- You want to increase property value
- You want to be on the cusp of future technology
- You want to protect against rising energy costs
- You want to create jobs and help your community
How much do solar panels cost to install?
As of 2020, solar panels in the U.S. range between $11,144 to $14,696 after solar tax credits. Additionally, the average price per watt for solar panels are usually between $2.51 and $3.31.
Though this might seem like a high price to pay for solar panels, is important to remember that solar panels are investments, not expenses. They will save you money and even produce new income depending on your utility, community, and state.
To better determine the exact price of your solar energy system, you need to evaluate the prospective income and initial investment. Here’s what you should consider:
- Current Electric Bill: Knowing how much you pay for electricity will determine how much you can save when switching to solar energy. The higher the cost of electricity, the more you can save with solar panels.
- Evaluate Sunlight Exposure: Living in an area with more sunlight exposure will allow the solar panels to produce more energy. As a result, you will see more benefits of your solar panels if you live in an area with high amounts of sunlight exposure.
- Estimate Residential Solar Panel Cost: Solar panels are designed to last many years. So, solar energy systems typically only have an upfront cost. To determine this cost, consider how much energy you will consume and what size system you need to generate that amount of energy. You can use NerdWallet’s tool to help you determine your monthly loan payments for solar loans.
- Look For Incentives: Many utility and states offer incentives for switching to solar energy. Look for incentives in your area to save even more money.
You can also use our Solar Panel Cost calculator to estimate solar panel installation based on your zip code.
How much money will I save from solar panels?
The amount of money that you save from solar panels will differ based on your sunlight exposure, local electricity rates, and any incentives that affect upfront costs.
To determine how much money you can save based on your location, use our solar calculator! With this calculator, you will see how many solar panels you need to power your house, how much they will cost, the solar payback period, and monthly and lifetime savings.
There are many reasons why people install solar panels: they will save you money, protect the planet for future generations, boost energy independence, allow you to gain a return on your investment, and increase property value.
These reasons boil down to two main categories: financial benefits and environmental benefits. The great thing about solar panels, though, is that you will receive both benefits even if you are only motivated by one.