Last Updated on November 1, 2023 by admin
Solar investments: A good option in the post-pandemic era or not!
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Important Points To Remember
- Production of electricity through solar panels is not just economically cheap but it also keeps the air quality high.
- If you live in a sunny area, it is worth getting solar panels.
- Installation of solar panels is a better way to tap into federal and state-offered solar incentives.
- Solar investments are investments towards cheap electricity production.
- Investments in the solar system can hike up your property value and provide you with a way for tax exemptions.
How Investing in Solar Energy could be financially beneficial?
Solar investments are not only beneficial for the environment but they also improve the overall quality of our lives. Solar smart investments also hold the key to lessening the weight of the financial cost of electricity bills on our pockets as well. According to the United States energy information administration, an average American spent usually 120 dollars per month on utility bills. The solar investment gives the homeowner complete control over his electricity generation hence slashing the impact of utility grid power production on his home.
According to the United States department of energy, residential solar systems are sixty-four percent cheaper now than they were a decade ago. This means that a person would have access to solar energy cheaper now than ever. So, how solar investments are financially profitable? Through Solar investments a person could tap into resources like solar tax credits, cash back, property tax exemptions, waived fees, and expedited permits which could lower the financial burden on an individual.
What are the main reasons for solar investments in the post-pandemic era?
There could be a lot of reasons to invest in solar energy now. From curtailing climate extremities to lessening your financial energy cost. It boils down to your motive that why you want to invest in solar energy. But the main reasons why you should put your money into solar investments are as follow:
- Renewable source of energy:
“Renewable sources are those sources of energy that could be used again and again without the concern that they might diminish over time”. Like solar, wind, hydro, and biomass energy sources. Energy production through renewable resources is usually clean because they don’t generate by-product gases like methane, carbon dioxide, and nitrogen dioxide. Clean energy is needed now more than ever. Because one, non-renewable sources like fossil fuels are depleting faster than expected and second, the by-product gases from non-renewable sources are increasing the global warming phenomenon. Due to global warming extreme weather conditions like drought, storms, and floods could be seen around the globe. This could be avoided by switching to a renewable source of energy.
- Beneficial for the environment:
Solar investments are not only beneficial for an individual’s financial condition and could also help us to create a safer and healthier environment. Solar PV modules usually use incoming solar radiation to generate electricity using P-N junctions. Hence, creating a healthier atmosphere to live in. According to research, breathing in poor-quality air for one day causes lung damage equivalent to smoking thirty cigarettes in a day. Solar investments are not only a way to produce electricity without disturbing the earth’s climate pattern, but it also keeps us safe from lung cancer by improving the air quality we breathe in.
Financial benefits of investing in Solar Systems:
- Access to bill credits through Net metering:
Solar investments are the best way to tap into resources like Net metering. “Net metering is the process of inculcating excess electricity produced by individual solar modules back into the utility grid in exchange for bill credits or renewable energy certificates”. In summer, residential solar modules produce excess electricity due to longer days. A person can send that extra electricity back into the grid station in exchange for bill credits. In winter, solar PV modules are incapable to meet the electricity of a household due to shorter sun days. These bill credits are then used to maintain the steady flow of electricity.
- Access Solar Tax credit by the federal government for residential solar systems:
To promote solar investments, the federal government has offered tax reliefs for those who believe in the creation of a clean and sustainable environment. These tax reliefs are in the form of tax credits also known as Investment Tax Credit (ITC). ITC is thirty percent of solar panel installation costs.
- Solar investments increase the value of a person’s property:
According to a survey, houses with solar installation have seen a four percent increase in their property value. Houses with solar panels sell faster on the market as well. In the twenty-first century, people are looking for reliable, clean, and independent ways to power their houses.
- Property tax exemptions:
Solar investments also gave their investors some property tax relief as well. Some states like California and Taxes offer their residents property tax relief on their initial solar installation.
Are Solar Panels Worth It for Your Home?
To find out whether the solar investment is a good option for a person’s home or not; he might want to look into the following things:
- Electricity rate in the neighborhood.
- Structure of the person’s home.
- Federal and state incentives.
- The weather of the person’s neighborhood.
Electricity rate in your locality
The current electricity rate is a very important factor in determining whether solar investments are a good option for your home or not. The price per unit of electricity varies by state. This is due to the concept called “Energy deregulation (ED)”.
Structure of the person’s home:
The rooftop structure of a person’s home plays an essential role in the determination that whether a person should invest in a solar system or not. Solar panels produce maximum electricity when they face the sun in the south and west direction.
Federal as well as state incentives provided to the citizens:
It is also important to find out whether a state offers its citizen extra incentives for solar installation or not. These incentives would help lower the initial installation cost of solar panels. If your residential state is offering such incentives, it is worth investing in solar energy.
The weather of the person’s neighborhood:
The residential area where blizzards and storms could be seen and don’t get the normal amount of sunlight. It is not worth installing solar panels because solar panels need sunlight to produce electricity. But if you live in a neighborhood where the weather is mostly sunny, it is worth getting a solar system.
How to calculate your energy Usage?
Monthly electricity bills depend upon two things:
- Current electricity rate
- Energy usage in kilowatt-hours
calculations regarding Energy usage:
Energy usage depends upon the size of the person’s household and the electronic appliances in that house. The bigger the house and the greater the number of appliances that run on electricity the greater will be the energy usage and more will be the electricity bill of a person. Vampire appliances are those appliances that continue using electricity even in standby modes such as laptops, DVRs, and computers. In homes, Smart power strips should be installed. These strips would automatically shut down any electronics that are no longer in use.
What are solar rebates?
“ Different states launch programs to lower the initial installation cost of solar panels such programs are known as solar rebates programs”. They vary from state to state and depend upon the location, size, and performance of the solar systems. The best states to offer solar rebates are New Jersey, Massachusetts, California, and New York, where solar investors could apply for up to 50 percent of cash back on their solar investments. Victorine homeowners are eligible for 50 percent cash back for their first solar panel installation. Solar rebates encourage homeowners to invest in cheap and safe solar energy.
How much does the solar panel installation usually cost?
Initial costs might be higher due to all the mechanical part installation. Solar panels could cost around 1500 to 20000 dollars. Homeowners will be self-sufficient in their electricity production after solar panel installation. Another plus point of solar investment is that it increases the property value of the house.
Solar panels usually last for about 25 to 30 years after their initial installation. This means that for up to almost 30 years the power production of solar panels would be at its maximum level. After 30 years it would slowly start to degrade which could be solved through maintenance. Solar panels have the longest working duration among all solar module structures.
Solar investments: worth it or not!
To find out whether a solar investment is a good investment or not. We need to calculate that investment payback period. “The payback period is the time frame between the initial purchase of solar panels and the saving they generate”. A good investment is when the payback period takes less than twelve years.
How to calculate the payback period?
To determine the payback period an individual need to know the following things
- The amount of electricity produced by the solar panel of an individual.
- The installation cost of solar panels.
- Local cost of electricity.
After knowing all these values, it is a matter of no time to figure out the payback period. Multiply the value of the production of electricity by your solar panel with the local cost of electricity and then simply divide that amount by the installation cost. The value you get is the payback period. If the payback period is less than 12 years. Solar panels are worth investing in.