Financial Benefits of Solar Energy

There are many reasons you may be considering solar energy for your home. You might be trying to reduce your consumption of fossil fuels, or perhaps you are interested in going off the grid. Whatever your motivations are, choosing solar energy may also have some financial benefits.

Lower Power Costs

The primary financial benefit of using solar energy is that any energy you can generate by using your solar panels is energy you will not have to purchase from a utility company. If your solar panels produce more energy than you need, you may even be able to get an energy credit by allowing that excess power to be sent back to your utility company's power grid. How much you can save may vary depending on the size of your roof and solar system, your level of consumption, your average daily sunlight, the angel of your roof, whether you lease or purchase your system and the average cost of energy in your area.

Fewer Rate Increases

Frequent and sometimes unpredictable price increases sometimes occur with fossil fuel energy. Shortages caused by natural disasters, extreme temperatures, supply line issues, or changes in the political climate may result in dramatic price increases. Solar energy usually doesn't have these kinds of dramatic fluctuations. Some providers offer the opportunity to secure a fixed-rate through vehicles such as a solar ppa.

Increased Home Value

Many potential buyers view a solar system as an upgrade that increases the value of a home. A Lawrence Berkeley National Laboratory study found that installing a solar system increases the value of a home by an average of approximately $15,000. The potential impact of installing a solar system on your home's value may vary based on the price of energy in your area and the amount of solar energy generated by your system.

Lower Impact of Time of Use Rates

If you live in a state that has implemented time of use rates, installing a solar system with a battery may allow you to reduce the impact of those rates by utilizing energy saved in your battery during peak hours. This can save you money by avoiding higher rates and also allow you to consume energy when you need it, rather than having to adjust your consumption to fit the needs of the power company.

Federal and Local Incentives

If you install a solar system in 2020 you may be eligible to receive a federal income tax credit of 26% of the installation cost. The Residential Renewable Energy Tax credit will drop to 22% in 2021 before expiring for residential homeowners in 2022. Additionally, some states and municipalities offer tax credits, rebates and other incentives, some of which will continue after the federal tax credit expires.

Extra Income

Some states offer net energy metering systems or solar renewable energy certificates, which provide a way for customers with solar energy systems to sell the excess energy generated by their systems back to the utility company. Prices and rules vary by state and there are usually caps in place on how much you can sell, so you're probably not going to get rich doing this, but you may at least be able to off-set some of your energy costs.

Job Creation

The solar workforce in the United States has increased by 168% in the last 10 years and is expected to continue growing. Even if you don't anticipate directly working in the solar energy industry, a thriving job market can have universal benefits for the economy, which may translate into economic growth across all industries. Most solar industry jobs can not easily be outsourced, which makes growth in the solar industry particularly beneficial for sustained economic growth.

Installing a solar system can directly impact your bottom line by reducing energy costs and generating tax incentives. The growth of the solar industry may also have long term benefits for the overall economy through increased property values and sustainable job growth.