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Electric bills can be a strain on your budget, especially during periods of heavy usage. One easy way to lower your electricity costs is to install solar panels on your home. Solar panels convert sunlight into electricity so you're not beholden to a utility company to power your home. But are solar panels a good choice for you?
How much do solar panels cost?
The cost of solar panels can vary depending on the size and layout of your home, as well as its location. The average cost to install a system of solar panels is anywhere from $15,000 to $25,000, per the Center for Sustainable Energy.
The good news is that beyond that initial investment, solar panel maintenance is fairly minimal. For the most part, you'll need to make sure your panels are kept clean, and that leaves, debris, and other obstructing materials don't accumulate on them, which would block sunlight and render them less efficient. Also, it's common for solar panels to come with a warranty of 15 to 25 years, so that should give you some degree of comfort that you won't have to sink lots of money into your setup beyond your initial investment.
There are also tax credits you may be eligible for that can help offset the cost of setting up your solar panels. A residential federal tax credit enables you to claim 26% of your installation costs, provided your setup is in place by Dec. 31, 2020. That credit drops to 22% next year and is set to expire at the end of 2021. However, if you can’t pay for a solar panel setup up front, you may be eligible for affordable financing options.
What's the return on investment for solar panels?
The return you get on your investment will depend on what your current electricity costs look like. Though a solar panel system is a substantial investment up front, over time, it can more than pay for itself.
Generally, solar panels create enough energy to power your whole house. Let's imagine you spend $15,000 to install a solar panel system and are eligible for a 26% federal tax credit on that installation. If your normal electric bill is $200 a month, it will take you 55 and 1/2 months to break even. Now, that may seem like a long time, but from that point on, you're actually making money by virtue of not paying for electricity.
Are solar panels a good investment for you?
Solar panels can save you money on electricity while adding to the value of your home, but they're not right for everyone. For one thing, they don't work for every home design. Whether you have the right setup depends on the direction your home faces and what roofing materials you have. You'll need to have a solar installation company come out to do an assessment to determine if you stand to benefit from solar panels.
Solar panels also may not make sense if you're not planning to stay in your home for very long, as there's a break-even period you'll need to get through before you reap the financial benefits of having the system in place. And if you don't tend to spend a lot on electricity, it'll take even longer to recoup your investment.
Also, some people don't like the look of solar panels. Whether that bothers you will depend on your aesthetic preferences, but it may be an issue for prospective buyers when the time comes to sell your home.
Ultimately, solar panels can be a solid investment and save you a lot of money in the long run. Crunch the numbers to see what sort of return you're looking at and decide whether they're the right choice for your home.
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