Saving with Solar Panels: How Solar Energy can Help Your Budget
Photo from Skyline Solar Power
Solar power is the most abundant energy source on earth. It works by converting solar radiation into electricity that we can use to power our homes, vehicles, and even cities. Solar power is a clean and renewable energy source, making it an excellent alternative to non-renewable energy such as coal and oil.
More and more homes are making the switch to solar power each year. This helps us in a collective sense to battle climate change and the effects it is having on our planet. Increased use of solar energy reduces air pollution, water usage, and combats greenhouse gas emissions.
Not only are we helping to save the planet, but homeowners across the United States are financially saving with solar panels. Now is truly the best time to make the switch to solar panels. The average cost of installing a solar panel system has reduced by around 70% in the last 10 years while electricity prices continue to rise.
If you have been considering solar panels for your home, then this blog post is for you. Here, we will highlight how you can save with solar panels installed on your property as well as the average solar panels cost.
5 Ways Solar Energy Can Help You Save
Let’s start by looking at 5 different ways that you can save money by installing solar panels at home. Let’s go!
1. Save on Energy Bills
This is the primary reason that homeowners opt for residential solar panels. By making the switch to solar, homeowners are less reliant on the grid. This will be evident in monthly energy bills, which will be significantly reduced if not completed wiped out altogether.
Solar panels systems have an impressive lifespan of approximately 25 years. It is at this point that the system will be less efficient. Over the course of this lifespan, it is possible to save thousands of dollars on your home’s energy bills.
The exact savings will depend on a number of factors, including:
- The size of the solar panel system
- Your property’s location
- The type of system you install
- Your home’s energy needs and usage
Later in this post, we will look at the average cost of installing solar panels and the potential savings with solar energy in Iowa, Colorado, Wyoming, and Utah.
2. Save With Tax Credit
State and federal incentives help to reduce the upfront cost of installing a solar panel system on your property. In recent years, that have been efforts to increase the number of homes with solar panel systems, given that this is a greener form of energy. This is good news for homeowners considering making the switch to solar.
In addition to state incentives, homeowners may apply for an ITC tax credit, which is equal to 26% of the cost of a new solar panel system. Many homeowners are initially reluctant to opt for solar panels due to the relatively high upfront costs, though tax incentives do help.
It’s also worth pointing out that homes with solar panels sell for around 4% more than comparable homes that do not have solar. This is worth keeping in mind if you have plans to sell your home over the course of the next 2+ decades. Solar panel financing is also available to help people afford the upfront cost.
3. Double Up With an Electric Car
If you have an electric car or are likewise considering purchasing one, it will pair perfectly with a residential solar system. Electric cars are desirable for many of the same reasons that solar panels are. They are very affordable to run and are better for the environment than more traditional alternatives.
You will be able to charge an electric car at home using solar panels. Solar panels can make your electric car even less expensive to home. It is considerably cheaper to charge an electric car with solar panels than it is to charge it using public charging stations or using grid power.
It is safe to say that, when it comes to saving money, electric cars and solar panels go hand in hand.
4. Save on Water Heater Bills
A solar water heater works in a different way from a solar panel system, though they both help you to reduce energy bills and save money. Whereas solar panels produce electricity that you can use to power your home, solar water heaters produce heat.
Given that a large proportion of your home’s energy can be used to heat water, solar panels are another excellent choice for residential properties.
5. Earn Credits Through Net Metering
Finally, for now, let’s look at net metering which is a way of earning credits that can further help you save on your energy bills. Where net metering is available, you will be able to effectively ‘sell’ your excess electricity to the grid, earning you credits. These credits can be used to offset the cost of any grid electricity that your home uses.
Net metering can help to achieve shorter payback periods for homeowners and yield a better return on investment.
How Much Can You Save With Solar Panels?
As we have already highlighted, there are a number of factors that determine how much residential homeowners could save with solar panels. However, we are able to look at average cost savings. Here we will highlight the average savings available to homeowners in Iowa, Colorado, Wyoming, and Utah.
The average recommended size of a solar panel system in Iowa is 5.6kW. The average installation cost after the 26% federal solar tax credit is $11,238. There is a payback period of between 5.8 and 7.1 years.
This translates into a net profit, which is the expected savings minus the system cost, of between $46,188 and $56,452. The levelized cost of solar energy in the state is 5 cents per kWh, compared to an expected average electric rate of 21 cents per kWh over the next 25 years without solar panels.
The recommended size solar panel system for the average utility bill in Colorado is 5.3kW. After applying tax credits, the average cost of installation is $11,122. There is a payback period of between 7 to 8.6 years.
The net profit in Colorado, which again is the savings minus the system cost, is between $23,496 and $28,717. The levelized cost of solar energy in the state is 5 cents per kWh, similar to Iowa. Without solar panels, there is an expected average electric rate of 22 cents per kWh over the next 25 years.
Based on the recommended solar panel system size of 5kW in Wyoming and after applying tax credits, the average installation cost is $11,397. The average payback period for this cost is between 5.3 and 6.4 years.
The net profit in the state is between $41,562 and $50,798. The levelized cost of solar energy is just 4 cents per kWh, compared to 30 cents per kWh without solar panels.
In Utah, the recommended size solar panel system for the average utility bill is 6.7kW and the average installation cost is currently $11,797. There is a payback period of between 10.6 and 12.9 years.
The net profit in the state is between $18,780 and $22,954, though this can vary considerably depending on the exact location of the property. The levelized cost of solar energy is 5 cents per kWh compared to 21 cents per kWh without solar.
As you can see, there exists huge potential for savings when you make the switch to solar panels.
The Science Behind Solar Panels
Before we wrap up, let’s take a look at the science behind how solar panels actually work. What exactly happens when the sun’s energy hits a solar panel?
The first thing to consider is the make-up of a solar panel system. They are constructed of photovoltaic cells, also known as silicon cells, along with a metal frame, glass casing, wiring, and an inverter.
Each photovoltaic cell works as a semiconductor wafer that has two layers: one that is negatively charged and another that is positively charged. When hit by photons from sunlight, these cells are energized, which creates an electric field
Loose electrons are set into motion and this, in turn, creates an electric current. The inverter converts this electricity into alternating current electricity that is used to power your home.
This may sound a little technical, but in practice, solar panels are incredibly easy to operate within the home.
Get Saving With Solar Panels
Solar panels are an incredible way of saving thousands of dollars on your home’s energy bills. In addition, they help to support a greener environment. If you are considering solar panels, now is the very best time due to the low installation cost and the availability of state and federal solar tax credit.
Saving with solar panels is easy. Here at Skyline Solar, we are your No. 1 choice for solar panel installation in Iowa, Colorado, Wyoming, and Utah. Contact us today for a quote!