Renewable Energy Spotlight: Solar
Solar is probably the most talked-about renewable there is. And for good reason! Solar panels are excellent for harnessing and distributing clean energy, both for residences and large-scale municipalities.
In this article, we’ll explain all you need to know about this brilliant renewable energy resource: how much it costs, its benefits, and more.
How does solar energy work?
Solar technologies convert sunlight into electrical energy through photovoltaic (PV) panels.
When the sun shines onto a solar panel, energy from the sunlight is absorbed by the PV cells in the panel. The cells then convert that energy into usable electricity before sending it out to the grid. If the energy isn’t used immediately, it’s stored in batteries for future use.
How much do solar panels cost to install?
Solar panels are expensive, but the brunt of the expense is in the installation and the purchase of the actual panels. Lower long-term expenses can make up for the initial cost.
The actual price depends on your electricity needs. On average, the Center for Sustainable Energy estimates an average residential 5kW size system costs between $3 and $5 per watt. That equates to roughly $15,000 to $25,000 before tax incentives.
However, you’ll see significant energy savings over time. The average household saves $1,500 a year with solar power.
Who should install solar panels?
Solar panels work wonderfully if your roof gets a lot of sunshine.
If it doesn’t, well—you might want to reconsider sinking $25,000 into their installation.
Solar panels work especially well for people who live in very sunny regions, like California or Arizona. But even if you live in one of these areas, the orientation toward the sun, the amount of shade, and your home’s roof type should be brought into consideration as well.
Not sure if solar panels are worth it? The SolarReviews calculator allows you to estimate how effective solar panels will be on your home. It also gives helpful tips on the value of your investment, estimated 25-year savings, and more.
Who else should install solar panels? People with high energy bills and those who qualify for tax breaks.
A residential federal tax credit allows taxpayers to claim 26% of installation costs for systems placed in service by Dec. 31, 2022. The credit lowers to 22% in 2023 and expires in 2024.
Why install solar panels?
There are lots of good reasons! Beyond being able to brag to your neighbors, you’re also saving a bunch of money on energy bills. A 5.18 kW solar panel system on a Bay Area, California home, for example, can lower an electric bill from $200 monthly to just $18. That equals roughly $65,098 in savings over 25 years.
Solar panels also boost the value of your real estate. Sunrun states that sellers see an average increase in resale value between $4,020 and $5,911 for each kilowatt of solar panels installed. At $4,020 per kilowatt, a five-kilowatt panel system would add an average of $20,100 to the market value of a mid-sized U.S. home.
Furthermore, solar panels reduce your home’s carbon footprint. You can sleep soundly at night knowing that you’re doing your part to reduce emissions and combat the climate crisis.
You can also sell back excess energy produced. It’s pretty common for a residential solar system to produce more energy than the home can consume. All the unused energy can be sold back to the utility company in what’s known as net metering. Check out this complete resource for how this works (and why solar panel owners should do it) here.
Finally, a solar panel system could make you eligible for a federal tax break. You’ll need to ensure your system falls under these parameters to qualify.
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